Trusts and Estates

Ca. Trs. & Estates Quarterly 2018, Volume 24, Issue 1

ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) ACCOUNTS: A NEW PLANNING TOOL FOR PERSONS WITH DISABILITIES

By Kevin Urbatsch, Esq.* and Jess Farinas, Esq.*

I. ABLE PROGRAM SUMMARY

ABLE accounts are designed to allow persons with disabilities to control their own money in a tax-free environment without jeopardizing eligibility for public benefits, such as Supplemental Security Income ("SSI") and Medi-Cal. The law authorizing ABLE accounts is based on the law governing 529 Plan accounts, which allow individuals to save money for education expenses, and both provide for tax-free growth and tax-free distributions.

ABLE accounts are a boon for persons with disabilities; for the first time, such persons are allowed to save and control their own money for future expenses without risk of losing public benefits. Estate planners should be aware of these accounts so they can advise families planning for a loved one with disabilities, persons with disabilities, and trustees of a special needs trust ("SNT") regarding the use of ABLE accounts in connection with such trusts to enhance the quality of life of a SNT beneficiary.

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