Special Needs Planning In New York: Your Guide To ABLE Accounts
People with special needs require specialized consideration in estate planning. Many people with special needs receive public benefits throughout Supplemental Security Income (SSI), Medicaid, or other government programs. Here is the challenge: These programs are strictly means-tested— a special needs person who has too much income or assets may not qualify.
Leaving money or property directly to a special needs loved one through a will can inadvertently undermine their eligibility for SSI or Medicaid. The good news is that there are estate planning options available, including ABLE accounts. Within this article, our Bronx & Westchester estate planning attorney provides an overview of ABLE accounts and other special needs planning options.
The Challenge: Disability Programs Have Strict Financial Eligibility Requirements
SSI and Medicaid are the two primary government programs that provide support for special needs individuals. The central challenge for estate planning is that these are means-tested programs with very strict financial eligibility requirements.
If you have a special needs child, special needs grandchild, or any other special needs loved one, you need to be very careful about leaving them money or property directly through your will. Your generosity could undermine their eligibility if a proper plan is not in place.
ABLE Accounts Allow Special Needs Individuals to Save Money Without Penalties
ABLE accounts are one special needs planning tool. The Achieving a Better Life Experience (ABLE) Act of 2014 is a federal law that allows individual states to create specialized programs to allow people to save for disability-related expenses without any tax penalties and without undermining Medicaid/SSI eligibility. As explained by the Office of the New York State Comptroller, ABLE accounts are available in New York. Here are three key things to know about ABLE accounts:
- Tax Advantaged, Exempt Savings: ABLE accounts are tax-advantaged and the savings within them are exempt from Medicaid eligibility calculations. Special needs individuals can save in any ABLE account without losing eligibility for having too much money.
- Used for Disability-Related Expenses (Broad Definition): The funds within an ABLE account must be used for disability-related expenses. However, the definition is very broad. It includes health costs, housing costs, food, and many other common expenses.
- Savings is Capped: The amount in an ABLE account is capped. A maximum of $14,000 can be added each year. For SSI beneficiaries, the total value of the account should not exceed $100,000. For non-SSI beneficiaries, the account can reach up to $420,000.
Further Financial Support Can Be Provided Through a Special Needs Trust (SNT)
ABLE accounts are just one special needs planning tool. If you have a disabled child, disabled grandchild, or other disabled loved one, you may also be able to leave them money or property without undermining their Medicaid/SSI eligibility through a Special Needs Trust (SNT). A New York estate planning lawyer can help you and your family put the right trust in place.
Contact Our New York Estate Planning Lawyer Today
At Cavallo & Cavallo, our Bronx estate planning lawyers have extensive experience helping families with special needs planning. If you have any specific questions or concerns about ABLE accounts, we are here as a resource. Call us now or connect with us online for a fully confidential, no obligation consultation. From our offices in the Bronx and New Rochelle, we provide special needs planning services in New York City, Westchester County, and beyond.
