How Can I Save Money for My Family Member with a Disability?
By: Mike Sukup | Published June 7, 2016
For many years, the only way for families to save money for an individual with a disability without disqualifying him or her from receiving public benefits was to establish a supplemental/special needs trust. These trusts require extensive expertise to prepare and manage for the benefit of your loved one. Soon, there will be another option. The Missouri ABLE (Achieving a Better Life Experience) Program will be available in the near future allowing the individual and their family to save money which can be used for the individual’s needs.
The Missouri ABLE Program will allow individuals with disabilities to establish an account that is exempt from both federal and state taxes, so long as the funds are used for qualified disability expenses. In addition, the ABLE account will not affect a person’s eligibility for certain public benefits. Now, as this may sound too good to be true, there are some requirements and restrictions. In order to be eligible to open an ABLE account, the person must have been blind or disabled prior to age 26. There are restrictions on the amounts that can be deposited in the account, the total amounts that can be held in the account, and the funds must be used for “qualified disability expenses”. The final catch, if the individual received Mo HealthNet benefits, the state can seek reimbursement from any remaining funds in the account at the passing of the individual.
The Missouri ABLE Program is not operational at this time, but is expected to be soon. An ABLE account will be a great resource for families, but it may not be right for everyone’s situation. To further discuss the Missouri ABLE program or other planning opportunities for family members with disabilities please contact our office to set up a consultation.