After six years of proposals, feedback and edits, the Internal Revenue Service (IRS) finalized the Achieving A Better Life Experience (ABLE) Accounts regulations on Oct. 1, 2020. While some of the regulations were expected or familiar, others were a bit of a surprise. In this episode of Parenting Impossible, Host Annette Hines talks with her favorite podcast guest, her husband Mark Worthington, about this finalized document and the implications it could have for people with disabilities and their families across the country.
ABLE Accounts were created to help people with disabilities and their families save and pay for disability-related expenses. These regulations may not be perfect, but they are a great tool that could help your family.
Five of the main points that Annette and Mark address include:
- The designation of authorized signers and authorized successor signers of the ABLE Account is selected by an eligible individual or determined by a hierarchical list of candidates for a person who lacks the capacity to designate someone.
- For an ABLE Account, you can have marked and severe functional limitations but still be involved in a Substantial Gainful Activity (SGA).
- You can put an additional $15,000 in the account from outside sources, but any other funds added to the account (up to about $12,000) must be from the eligible individual.
- Individuals are responsible for tracking expenses to correctly pay their taxes, but they no longer have to report these expenses to the account. In addition to this regulation, the owner of the account, an eligible individual, can treat qualified disability expenses paid up to and including the 60th day of the new tax year as being paid in the previous tax year.
- Eligible individuals can name a death beneficiary, and if none is named, it goes to the designated beneficiaries or the eligible individual’s probate estate. Upon the death of the individual, the IRS allows you to pay qualified disability expenses even if it is not for a pre-death contract, meaning you can pay for the funeral after death and before Medicaid payback.
The final regulations are not on the Federal Registry yet, but you can read the full document by visiting the IRS’s website here.
Mark is also an experienced special needs lawyer, a Professor of Law, and a Director of the Graduate Program in Elder Law and Estate Planning at Western New England University School of Law.
Annette Hines has been practicing in the areas of Special Needs, Elder Law, and Estate Planning for more than 20 years. Ms. Hines brings personal experience with special needs to her practice and podcasts as the mother of two daughters, one of whom passed away from Mitochondrial disease in November 2013. This deep, personal understanding of special needs fuels her passion for quality special needs planning and drives her dedication to help others within the special needs community.