Blog
ABLE Accounts Help Special Needs Families
In 2014, President Obama signed the Achieving a Better Life Experience (ABLE) Act as part of the Tax Increase Prevention Act of 2014. As reported in NJ101.5’s article, “Special accounts for the disabled,”, these accounts allow qualified individuals with disabilities the opportunity to have tax-free savings accounts without putting their eligibility for Supplemental Security Income (SSI) and other means-tested government programs like Medicaid at risk.
Longer Life Spans for Special Needs Children Impact Parents’ Retirement Planning
Special needs families are accustomed to things being more complicated, and retirement planning is no exception. Parents must plan for their own retirement as well as ensure a plan is in place for the time when they are no longer able to care for their special needs child. That includes everything from making sure beneficiary designations are up-to-date, to ensuring a child’s inheritance does not make them ineligible for means-tested government benefits.
Special Needs Presumption Corrected at Federal Level
The U.S. House just last year passed the Special Needs Trust Fairness and Medicaid Improvement Act (H.R. 670). According to PR Web’s article “NAELA Praises House Passage of Special Needs Trust Fairness and Medicaid Improvement Act”, this “common sense fix” corrected the original law, which assumed disabled people would be incapable of handling their own affairs and need a guardian. The act passed in the House with an overwhelming 382 to 22 vote.
A Focus on Special Needs Planning
For the month of March and in honor of Special Needs Awareness Month, we’re focusing this month on estate planning when it comes to planning for special needs beneficiaries. In December 2016, President Obama signed into law the 21st Century Cures Act, which expanded protections for people with special needs. In addition, many states continue to enact laws allowing for ABLE accounts.
Planning for Massachusetts Estate Taxes, Too!
With the federal estate tax exemption up to $5.49 million for 2017, many need no longer worry about their estate incurring federal estate taxes. However, many states have a state estate tax and for Massachusetts residents, the state estate tax exemption is only $1 million. Any Massachusetts estate over that threshold will potentially have to pay state estate taxes and file an estate tax return. We’ll take a look at a Massachusetts Standby Gifting Trust and how you could potentially make gifts a day before death to avoid significant state estate taxes.
