Pub. 1 2019 Issue 3

M A Y / J U N E 2 0 1 9 22 nebraska cpas Federal legislationadopted in2015nowallows people with disabilities who became disabled before the age of 26 to set aside up to $14,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. Generally, disabled people cannot maintain personal assets worth more than $2,000 without having to forfeit their eligibility for federal government programs like Medicaid and Supplemental Security Income (SSI). Under the Achieving a Better Life Experience (ABLE) Act, this new tax-free savings account can be used to pay for qualifying expenses such as the medical costs of treating the disability, or for education, housing, and health care, among other things. Now, having an ABLE account will not compromise the individual’s ability to qualify for federal benefits like SSI or Medicaid as long as the account balance does not exceed $100,000. ABLE accounts may be used to pay a variety of expenses related to maintaining the disabled individual’s health, independence, and quality of life. Examples of qualified disability expenses include the following: education, housing, transportation, employment training and support, assistive technology and related services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial, and basic living expenses. Some 30 states, including Nebraska, have set up programs for families to invest in the ABLE accounts. The Nebraska plan offers four investment options based upon the individual’s objectives and risk tolerance. These accounts are one more tool for families of people with special needs to access in order to protect their loved ones’ valuable benefits while also enhancing their quality of life. Because the accounts can hold a maximum of $100,000 without negative repercussions, and since they apply only to people who became disabled when they were young, most families of people with disabilities will still need to consider setting up a traditional Special Needs Trust if they want to properly care for their relative with special needs. These trusts can also be drafted to protect the trust assets from Medicaid estate recovery if they are funded by family members’ assets, and not the trust beneficiary. Although it may seem easy to set up an ABLE account, there are many hidden pitfalls associated with allocating spending of the funds in the account, both for the beneficiary and for his or her family members. Therefore, it is imperative that anyone thinking about establishing an ABLE account speak with his or her special needs planner first, in order to ensure that all of the pieces of the special needs plan properly align with the ABLE account and other assets. t DON BROWN Advertising Sales 813.423.1429 dbrown367@brighthouse .com WORDS. PLANNING FOR SPECIAL NEEDS CLIENTS HELP FOR PEOPLE WITH DISABILITIES BY THOMAS E. WHITMORE, WHITMORE LAW OFFICE, LLC For more information regarding estate planning, wills, trusts, and probate, contact Thomas E. Whitmore at (402) 391-2400 or tom@whitmorelaw.com . Estate plan- ning attorney Tom Whitmore has been counseling and advising clients in the Omaha area for more than 30 years, and maintains the AV Preeminent® status, having first achieving this rating in 1978. The Martindale-Hubbell® AV Preeminent® rating is the highest possible rating for an attorney for both ethical standards and legal ability. This rating represents the pinnacle of professional ex- cellence. It is achieved only after an attorney has been reviewed and recommended by their peers: members of the bar and the judiciary.