By: Dustin Humphrey
A new federal statute could dramatically change estate planning for those with disabilities and families who support loved ones with disabilities.
While most Americans can save for themselves with a variety of investment accounts, and save for children with investments like 529 college savings accounts, those with disabilities are not so lucky. Often dependent on the support of government programs, those with disabilities or those supporting someone with a disability, risked losing their benefits if too much money was earned or saved. Not anymore.
The ABLE Act, recently passed by Congress, may benefit millions of disabled Americans by allowing tax exempt accounts that will not effect eligibility for important government programs.
Years of advocacy by the parents of disabled children and many others helped make the accounts possible. Those advocates included Cincinnati government affairs executive Chip Gerhardt, whose 17-year-old daughter, Anna, has Down syndrome. Gerhardt’s personal connection and passion for the bill helped win the support of House Speaker John Boehner, USA Today reported.
ABLE accounts allow the disabled to build up a financial cushion without jeopardizing their eligibility for Medicaid and Social Security benefits and the savings can be used to pay for education, health care, transportation, housing and other expenses.
The ABLE Act’s passage is the result of broad, bipartisan support, with about 85 percent of Congress co-sponsoring the bill. The vote was 404-17 in the House and 76-16 in the Senate, where the ABLE Act was part of a larger tax bill.
Now, states must put regulations in place, similar to those for other 529 plans.
Dustin joined the SBW&P team in 2010, coming to us from one of the oldest firms in Cincinnati. He earned his undergraduate degree from Bellarmine University, summa cum laude, and his law degree from the Salmon P. Chase College of Law at Northern Kentucky University, where he graduated cum laude. Dustin’s law practice includes personal injury law, medical malpractice law, business law including corporations, LLCs and business planning, real estate law, probate law, estate planning, employment law, and family law.