Having a disabled loved one often poses a difficult challenge of wanting to provide financial assistance without disqualifying that person from government benefits. One common solution is to create a Special Needs Trust. Another alternative will soon become available which will allow a loved one to reap benefits similar to a Special Needs Trust without having to incur the cost of establishing such a trust.
In 2014, Congress passed the Achieving a Better Life Experience Act (ABLE Act) and the Michigan ABLE Act (MiABLE) was signed into law in October 2015. MiABLE provides that funds in an ABLE account can be used for “qualified disability expenses” and do not disqualify a beneficiary from government benefits. Contributions to a MiABLE account are deductible (up to $10,000 for a joint tax return), the assets grow tax free (similar to a 529 account) and total contributions cannot exceed $14,000 per year. The Michigan Department of Treasury will administer the MiABLE program and is working with TSA Consulting Group for the management and administration of MiABLE accounts. It is expected that customers will be able to open MiABLE accounts by the end of the year.
If you have a disabled child or grandchild, a MiABLE account may be an ideal way to provide for more financial resources without having to create a Special Needs Trust. See an experienced elder law attorney for more information.