When leveraged properly as part of a coordinated long-term portfolio, an Achieving a Better Life Experience (ABLE or 529A) account and special needs trust (SNT) can allow an individual with disabilities to maximize savings above the government resource limit (currently $2,000 for an individual) without losing eligibility for U.S. government benefits. This article analyzes recent literature, policies, statutes, and litigation concerning special needs planning matters to create strategic guidance for financial planners who are considering combining an ABLE account with an SNT. Financial planners should address eight key concerns to determine whether it is in a client’s best interests to utilize an ABLE account in tandem with an SNT: (1) eligibility; (2) annual contribution limits; (3) cumulative balance limits; (4) total funds available after account setup fees; (5) total funds available after account administration and/or maintenance fees; (6) Medicaid Estate Recovery factors; (7) spending requirements/goals; and (8) state-based investment options.
Author: Annemarie Kelly, JD, LLM, is a practicing attorney and associate professor teaching health law, informatics, and policy within the College of Health and Human Services Department of Health Administration at Eastern Michigan University (EMU) in Ypsilanti, Michigan. Along with her co-author in this publication, she is the co-director and founder of the EMU Disability Planning & Policy Center. In 2020, Ms. Kelly received the Crain’s Detroit Business Notable Women in Healthcare Award. She formerly worked as a legal compliance officer and state administrative manager serving the Michigan DHHS.
Author: Lewis Hershey, PhD, MA, is a professor of marketing in the Department of Marketing, Business Law, and Supply Chain Management at Eastern Michigan University (EMU) in Ypsilanti, Michigan. Along with his co-author in this publication, Dr. Hershey is the co-director and founder of the EMU Disability Planning & Policy Center. He was previously a financial advisor with American Express and Prudential. A 2009 Paul Mills Scholar, Dr. Hershey is a former chapter president of the Southeastern North Carolina Chapter of the Society of Financial Service Professionals and serves on the Society’s University Partners Program Committee.
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