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Congress passed the Achieving a Better Life Experience Act (ABLE Act) today. The ABLE Act says that its purpose is to:
(1) To encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life.
(2) To provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act, the supplemental security income program under title XVI of such Act, the beneficiary’s employment, and other sources.
If the President signs the law and the states implement it like they implemented Section 529 college savings plans, people will be able to make gifts to savings plans for disabled beneficiaries and beneficiaries can receive tax-free plan distributions for ‘qualified disability expenses.’ The ABLE Act defines ‘qualified disability expenses’as “any expenses related to the eligible individual’s blindness or disability which are made for the benefit of an eligible individual who is the designated beneficiary, including the following expenses: education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses, which are approved by the [IRS]…”
The new law will make it much easier for people to provide for disabled family members within their estate plans with tax breaks that will stretch dollars for the disabled plan beneficiaries.
Find more information about mediation, estate and business planning, wills, trusts, and Medicaid issues for nursing home residents on this website, like our Facebook page, or follow Jeff R. Hawkins on Twitter for the latest information.
Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers. Jeff is a Fellow of the American College of Trust and Estate Counsel and the 2014-15 Indiana State Bar Association President . © Copyright 2014 Hawkins Law PC.