How can an adviser, accountant or estate planner use an ABLE account to help clients?
This article features an interview with John Finch, Director of ABLE United with the Florida Prepaid College Board. In July 2015, the State of Florida created ABLE United and mandated the Florida Prepaid College Board to administer the ABLE United Program. The Florida Prepaid College Board was established in 1987, and currently oversees more than $10 billion in investments in the state’s 529 savings plan and 529 prepaid plan. John’s primary role is to oversee the activities and functions relating to ABLE United, which is Florida’s ABLE Program. By function, he is responsible for the strategy, operations, contract management, financial management and board meetings for the program. Prior to the role, John worked with the ARC of Florida, which has a mission to promote and protect the human rights of people with intellectual and developmental disabilities. Lastly, John graduated from Florida State University with a B.S. in Business Administration in 2005, and thank you John for your time, insight and support for working with me on the article. Please read the question and answers to learn about her perspective on ABLE programs, and hope that the article provides you with an opportunity to learn more from your peers.
Question 1 (Paul Curley, Editor of the 529 Dash): What is an ABLE United account?
Answer 1 (John Finch, Director of ABLE United with the Florida Prepaid College Board):
– ABLE United, Florida’s qualified ABLE program, was created following the passage of the Stephen Beck Jr. Achieving a Better Life Experience (ABLE) Act. Enacted in December 2014, this federal legislation amends Section 529 of the Internal Revenue Service Code and establishes a tax-free savings and investment account established to support qualified disability expenses for an individual with a disability.
– Money in an ABLE account is generally disregarded when determining eligibility for federal benefit programs, such as Supplemental Security Income (SSI) and Medicaid.
– The individual with a disability owns the account, but an authorized person may open and oversee the account. Anyone may contribute to an ABLE United account on behalf of the individual with a disability, including the individual, friends and family. Contributions are considered a completed gift.
– To be eligible for an ABLE United account, the individual must be a Florida resident at the time of application and have a qualifying disability with onset prior to age 26.
Question 2: How does ABLE United improve the lives of eligible users?
– ABLE United encourages and assists the saving of private funds to help persons with disabilities cover costs that support their health, independence and quality of life. For individuals receiving government benefits, ABLE United offers financial security by allowing individuals to save beyond the $2,000 resource limit that restricted them in the past.
– Funds in an ABLE United account are disregarded for the purposes of determining Medicaid eligibility.
– With ABLE United, there is now an advantageous way to save, protect and grow money, ensuring economic goals are met with confidence.
Question 3: Once the ABLE account is opened, what can assets be used for?
– The assets in an ABLE account can be used toward qualified disability expenses, including housing, transportation, assistive technology and more. These basic living expenses are not limited to items for which there is a medical necessity or which solely benefit the individual.
– Money in an ABLE United account may be withdrawn at any time and for any reason via electronic transfer or check.
Question 4: How can an adviser use an ABLE account to help clients?
– Since funds in an ABLE United account are generally disregarded when determining eligibility for disability benefit programs, contributing money into an ABLE United account will reduce countable assets considered for benefit eligibility and may help an individual qualify for a program that they were otherwise not qualified for based on countable assets.
– Previous to ABLE accounts, individuals with disabilities and their families were limited to special needs trusts as a way to save without impacting eligibility for federal or state benefits. ABLE accounts provide a new financial tool that can be an effective supplement to a special needs trust. The financial situation of each individual is unique; consultation with a financial, tax or legal professional for future planning is suggested.
Question 5: Where can advisers go to learn more?
– A wealth of information can be found online at www.ableunited.com including testimonials, eligibility, government benefits and more.
– Account specialists are available Monday-Friday, 9 a.m. – 6 p.m., ET at 888-524-ABLE (2253)
– You can email ABLE United at email@example.com
Editor’s Final Note: Thank you John Finch for your time and insight for this article. Also, I would like to provide a special thank you to the readers for learning from your peers, for your support and your engagement.