Hopefully, you have taken the time to meet with a Special Needs Planning attorney who may have helped you set up a Special Needs Trust for your child. The trust may have been funded with money you have saved, contributions from other family members or with a life insurance policy. You were also likely told at the time that if your son or daughter had more than $2,000, , their government benefits could be stopped.
Fortunately, new laws have been put into place that may allow some financial wiggle-room for your child, including the possibility to amass a savings account. Specifically, if your child became disabled before the age of 26, he or she can now have what is called an “ABLE” account (Achieving A Better Life Experience) to accumulate up to $100,000.00 without the risk of losing government benefits.
When the law was passed by Congress in December of 2016, it also provided that yearly contributions, up to $14,000, can be made to the account, without reporting the “gift” to the IRS. That amount has now been raised to $15,000 per year. If someone contributes more than 15,000, then a gift tax return would need to be filed, even if no taxes would be due.
The ABLE funds must be used for “qualified” disability expenses such as tutoring, education, transportation, housing, employment training, health care expenses, administrative expenses, and financial management.
A Special Needs Trust and an ABLE account, working hand-in hand, may provide many more possibilities for funding, and an opportunity for your child to achieve their highest potential. To explore these possibilities, we invite you call the Law Office of Sheri R. Abrams at (571) 328-5795, to set up an appointment.