IRS Raises Limit For ABLE Accounts

Article by Michelle Diamant, Disability Scoop

The Internal Revenue Service has increased the gift tax exclusion due to inflation. The annual contribution limit for ABLE accounts is tied to that figure. (Molly Riley/McClatchyDC/TNS)

For the first time in four years, the amount of money that people with disabilities can save without jeopardizing eligibility for government benefits is rising. Starting this month, the Internal Revenue Service said that the federal gift tax exclusion is growing from $15,000 to $16,000 annually. That same cap also applies to contributions to ABLE accounts, a special savings vehicle for people with disabilities. The increase is the first since 2018. It comes as a result of inflation, the IRS said.

ABLE accounts, which were created under a 2014 law, allow individuals with disabilities to save up to $100,000 without risking eligibility for Social Security and other government benefits. Medicaid can be retained no matter how much is in the accounts. Interest earned on funds in ABLE accounts is tax free and money saved can be used to pay for qualified disability expenses including education, health care, transportation and housing. Annual deposits in ABLE accounts are generally limited to the value of the IRS’ gift tax exclusion, now $16,000.

However, people with disabilities who are employed can also save some of their earnings in the accounts above and beyond the gift tax amount. For those in the continental U.S., that means up to an additional $12,880 this year, according to the ABLE National Resource Center. Alaska residents can save an extra $16,090 in compensation and that figure is $14,820 in Hawaii, the center said.

Currently, ABLE accounts are offered through 47 state programs, many of which are open to people with disabilities no matter where they live. As of September, ISS Market Intelligence reports that there are over 105,000 ABLE accounts open nationwide containing $937 million in assets.

ABLE Accounts vs. Special Needs Trusts: Why Not Have It All?

Article by Lelia Wardell Mander, Special Needs Answers

If you have a child with disabilities, it is crucial to set money aside for the child’s future. At the same time, you need to consider your child’s access to public benefit programs such as Medicaid and Supplemental Security Income (SSI), as well as the state and federal tax implications. The two major vehicles to accomplish these goals, ABLE accounts and special needs trusts (SNTs), each have their advantages and limitations. Using them in tandem may be the optimal strategy for your child with special needs.

Achieving a Better Life Experience (ABLE): Pros and Cons
Patterned on Section 529 college savings accounts, ABLE accounts offer a tax-advantaged way for people with disabilities to put money aside in excess of the SSI program’s $2,000 resource cap without compromising their eligibility for government benefits like SSI and Medicaid.

Assets are allowed to grow, tax-free, inside the account, and withdrawals are not taxed so long as the money is spent on qualified disability expenses (QDEs) such as transportation, assistive technology, health and wellness, and employment support.

And, unlike a special needs trust, which leaves the account under the control of an assigned trustee, an ABLE account can be managed and controlled by the beneficiary once she comes of age. Being able to spend money without having to obtain a trustee’s permission translates into welcome financial independence for a person with a disability.

Is it Time to Update Your Power of Attorney?

Article by Matthew Parker, Esq., Marshall, Parker, and Weber

It’s likely that you have a power of attorney stuck away in a folder from your last visit to the estate planning attorney. How old do you think it is? Do you even remember who you named in the document? Perhaps it is time to dust off that power of attorney and see if it needs to be updated.

Powers of attorney are legal documents that create an agency relationship with the person who will act on your behalf. Your agent is named to act on your behalf under the terms and conditions you define. Powers of attorney are revocable and are normally not used until you are incapacitated. There are two types of powers of attorney – a financial and a healthcare power of attorney. You can name different agents to perform the financial and healthcare duties. You can also name more than one agent to act together or independently from each other.

Here are some common reasons to consider updating your power of attorney:

Do you need to change your agents? Are the people you named in your power of attorney still the appropriate choices? Did one of them move away from you, making it more difficult for them to perform the duties as your agent? Maybe your agent has passed away and there is no one else named to succeed them.
How old is your power of attorney? If your financial power of attorney is more than 10 years old, it may be considered “stale” by the financial services industry. That means it may not be honored because of its age. Financial institutions such as banks and insurance companies often will not honor older powers of attorney unless a separate affidavit is signed by an agent attesting that the document is still valid.

Achieva Family Trust Upcoming Webinar

Successful Models/Strategies for Employment for People with Disabilities

Come hear a panel of experts from The University of Pittsburgh, Community College of Allegheny County, Goodwill of Southwestern PA, and Achieva Employment Supports & Business Services, who will present the different strategies and models for employment. They will cover the steps and process to achieve employment, and various partnerships and collaborations in the community with a broad range of companies, including industrial, health, and the service sectors. They will also share examples of positive outcomes.

Wednesday, February 16, 10 a.m. - 12 p.m.

Come Join Achieva Family Trust!

We are hiring for two different positions, a Trust Assistant in Pittsburgh, and a Regional Trust Liaison in the Philadelphia area. Please see below a brief description on each position.

Trust Assistant: This position provides administrative support to the entire team at Achieva Family Trust by coordinating communications with potential and current trust beneficiaries and their professional representatives. It's also acts as the first point of contact with clients, prospective clients and their representatives who contact ACHIEVA Family Trust. Click here for more information and to apply.

Regional Trust Liaison: This position will be located in the Philadelphia, PA region and will be a remote position with frequent regional travel involved. It will provide consultation and support services of an advanced or unusual nature to trust beneficiaries and their families. Advocates for and educates regarding support plans that maximize all resources available to the person, including services provided through government benefits as well as those provided through the use of the trust. Meets with potential beneficiaries, families, and attorneys to provide information on special needs trusts. Markets the Achieva Family Trust in the region. Provide back up to the President, Vice President, and Trust Manager for the review of disbursements from the trust for beneficiaries. Click here for more information and to apply.