Category: Benefits and Finances

Dive into ABLE accounts and special needs trusts

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We frequently get asked by families whether an ABLE account or a special needs trust is best for them.  The short answer is a typical lawyer answer: it depends.  The medium answer is that they serve different purposes and its not a matter of choosing one or the other, its about choosing the best vehicle for specific purposes, and in the end, most families should have both an ABLE and a special needs trust.

They both serve as a place where money can be accumulated for a person with a disability without interfering with eligibility for SSI and Medicaid benefits. Past that commonality, there are significant differences.

Ownership

An ABLE account can be owned and even managed by the person with the disability, if they otherwise have the ability. The disabled individual can make his or her own decisions and use a debit card or checks to pay for items.

A special needs trust must be managed by a trustee, who makes all the decisions about investment and use of the money in the trust.  The person with the disability, or a guardian or caretaker, can propose expenditures from the trust, but the trustee makes the final decision and handles the purchase.

Holdings

An ABLE account has both yearly and lifetime deposit limits, at least for purposes of excluding assets from consideration for SSI and Medicaid eligibility. Up to $15,000 per year (approximate, this amount is tied to an index so will vary slightly year to year) may be deposited without impacting SSI or Medicaid eligibility.  A maximum of $100,000 total can be held in the ABLE account without impacting SSI or Medicaid eligibility.  The yearly deposit limit is far below what a person might typically receive from a parent upon the parent’s death, when property, retirement accounts and life insurance are all figured in.  An ABLE account can hold only cash, as well, so if a child is left property other than cash it could not be shielded by the ABLE account.  Money can be contributed by any person.

A special needs trust has no limit on the amount that can be contributed to it at any time, nor a maximum value overall.  A special needs trust can also hold any type of property, including a house, car, or other non-cash assets (with the exception of a pooled trust, which is not discussed in this article).  Like the ABLE account, money can be contributed by any person, but if the disabled person will be a contributor then the trust itself must have some special provisions.

Number of accounts

A person may have only one ABLE account.  It is not possible to get around the contribution limits by opening multiple accounts, as only one account is legal permitted.

A person may have any number of special needs trusts naming them as beneficiary.  Each parent and each individual grandparent could set up their own special needs trust for a person if they so chose, giving them the ability to choose the trustee and terms of their own liking.

Read more on ABLE accounts and special needs trusts:

ABLE Account Q&A,

4 Things to know about ABLE Accounts,

How NOT to use special needs trust money,

Does your child need a special needs trust to get Medicaid?,

The basics of special needs trusts

A special needs law firm can help you figure out what you need for your child, and how to put all the planning pieces together.

If you have questions about preparing for your own special needs child’s future, Parker Counsel Legal Services a call or shoot us an email. legal@parkercounsel.com or 833-733-2668

SSI FAQ

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SSI: Supplemental Security Income for Adults

SSI is a federal program administered by the Social Security Administration (SSA) to provide monthly cash payments to people with disabilities who have little to no income and fewer than $2000 in assets. It stands for "supplemental security income" and is not the same as SSDI (social security disability income), which is a program for adults who become disabled after having worked and paid into the social security system. Children under age 18 can receive SSI, but family income is considered in the eligibility determination. Once a child turns 18, only income and assets belonging to the individual are considered.
An application can be started online, by phone, or in person at your local social security office. https://www.ssa.gov/benefits/disability/
Eligibility is based on two factors: financial situation and disability status. Disability, for SSI purposes, means that a person has a physical or mental condition that is expected to continue for at least a year or more, and prevents the person from holding employment sufficient to support themselves. Developmental disabilities frequently result in a disability for SSI purposes, but a diagnosis alone is not enough. Applicants must show medical, educational, or vocational evidence that they are not able to engage in meaningful work.
There are several types of information that may be needed to establish disability. Medical information, of course, will be needed - doctors, treatments, medications, etc will all be needed to establish that a physical or mental condition exists. The medical information will also establish the severity of the condition. In addition to medical information, some people may need to add other information in order to demonstrate that the person is not able to engage in meaningful employment. This could include documents from educational evaluations and special education reviews, information about attempts to engage in employment (if any), or statements from therapists and other professional providers.
If your child is under age 18, family income is considered when determining eligibility for SSI. If your child is 18 or older, ONLY the income the child earns is considered. Any support you provide in the way of housing or groceries is considered when determining your child's monthly SSI benefit, but family income is NOT considered to determine eligibility itself.

Pandemic stimulus payments for SSI recipients

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UPDATE: On April 15 the Treasury department finally announced that it would not require SSI recipients to take extra steps to receive the $1200 stimulus payment. If you have NOT already filed a return or submitted the short form reference in the post below, you should not have to do anything at this point to receive the $1200 stimulus payment for any SSI recipient. It appears that although the payments will be coming from the IRS, not the SSA, they will be made in whatever manner SSI benefits are received – direct deposit, DirectExpress benefits card, or paper check. Right now they are expected to go out in early May.

Most adults who receive SSI benefits are entitled to the $1200 stimulus payments passed by the US Congress. But there are some details you need to know.

Adults (anyone age 18 or older) who receive SSI benefits and are NOT claimed as a dependent on anyone else’s tax return are entitled to the $1200 payment.

The payment will NOT be counted as income to the recipient, and so will NOT affect the monthly benefit.

The payment will NOT be counted as an asset for 12 months, so if your SSI recipient has some money saved and this payment would put them over the $2000 asset limit, you will have 12 months to spend the money before it affects the monthly benefit.

SSI recipients will NOT get these payments automatically. Because of a glitch in the way the legislation was written, and despite urging by disability groups and many legislators for the Treasury Department to fix this oversight, anyone who gets SSI and did not file a tax return in either 2018 or 2019 – which is almost all SSI recipients – will need to file a simplified information form with the IRS in order to get their payment.

If you have already filed a 2019 tax return for your adult child, you do not need to take this additional step.

If you have SSI payments direct deposited to a bank account, the stimulus payment can be sent to the same account. You can also direct the payment into any other bank account that is in the name of the SSI recipient.

If you receive paper checks, you can receive the stimulus payment by paper check.

Unfortunately, if SSI payments are made to a benefits debit card, there is currently no information on how the stimulus payment can be made to that card account. You will have to ask for a paper check if there is no other bank account in the SSI recipient’s name. This obviously will present a problem on how to get that check cashed. One option would be to go ahead and open an ABLE account if that is something you have been considering but haven’t gotten around to yet.

Another option would be to do a third party endorsement of the check to yourself (a parent or other responsible adult) and deposit it into your own account. You do this by having the check endorsed as thus: “Pay to the order of (parent or other), signature of payee (person the check is made out to).” Then when you deposit it into your own account you sign as you would normally endorse a check. But BE ADVISED that some banks will not accept third party endorsements, so check with your bank before you try this.

The IRS registration form is here.

Stay safe. Stay sane.

Portsmouth NH Special Needs Trust Attorney

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Parents of children with developmental disabilities that will not be able to work and support themselves as adults can provide for their children in the future with special needs trusts. This special type of trust allows families of all economic means to leave money to help provide a better quality of life for their child without endangering their very important social security and Medicaid benefits. You can find more information on special needs trusts here. Our firm can help you develop a comprehensive estate plan that includes a special needs trust for your child with special needs to ensure resources for their care long into the future.

Your child may also need guardianship after they turn 18, when you, the parents, can no longer make decisions for them or even access educational and medical information without your child’s permission. Our firm can help families in Rockingham county and Stratford county apply for and present the necessary evidence to a Court to obtain an order of guardianship. Some of your questions about guardianship are answered here.

The best way to get answers to your questions and see if we can help you is to give us a call or send an email. We love to chat with families about their needs, and we promise you will learn something you didn’t already know when you talk to us. 833-RED-BOOT (833-733-2668) or legal@parkercounsel.com

A New Hampshire special needs trust attorney can help you from our office in downtown Portsmouth, 155 Fleet St, Portsmouth NH 03801.

How NOT to use Special Needs Trust Money

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Special needs trusts are simple and yet oh so complicated, like almost everything devised by the government. They are a wonderful tool for parents and others to provide money to use for a disabled child while protecting the child’s eligibility for Medicaid and SSI (social security benefits). They can hold any amount of money and that money can be used to supplement the benefits received from the government and thereby, it is hoped, enhance the quality of life of the individual.

The money cannot ever, however, be used to pay for items that the benefits are intended to cover, without causing some reduction in, or sometimes loss of, the benefits. This includes things like:

Cash given directly to the beneficiary for any purpose

Food or groceries

Restaurant meals (except if given as an occasional gift)

Rent or mortgage payments

Utilities such as electricity, gas, and water

Utilities hookup or connection charges

On the other hand, a special needs trust CAN make contributions to an ABLE account, and the ABLE account CAN be used to pay for many of the items the Trust cannot pay for. See? Simple and yet complicated all at the same time.

Parker Counsel Legal Services serves families in Central Texas, Western Massachusetts, Northern New Jersey, and the New Hampshire Seacoast with special needs estate planning, special needs trusts, and guardianships. Contact us for a consultation at 833-RED-BOOT (833-733-2668) or legal@parkercounsel.com

Myth vs Attorney

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As a special needs parent myself, I regularly tell our clients that getting connected to parent support groups is almost a necessity to get through life with a special needs child. Traditional sources of parenting wisdom and tips, like grandparents, the mommy group at the playground, and even the many many many parenting books at Barnes and Noble simply aren’t going to have the information we need for our differently abled and differently developing children. Special needs parent groups are a lifesaver.

But there are certain types of information that should still come from professionals. I frequently see bits of info regarding benefits and legal issues passed around in these groups that is just plain wrong. Much of it is ultimately harmless, but a lot of things I see can actually result in the loss of benefits and opportunities if the information is taken as true.

For example, recently this myth has been making the rounds: that individuals with disablities can only open an ABLE account if they are receicving SSI benefits. This is not true. You do not have to be receiving benefits in order to qualify for an ABLE account. And this is only the latest in a string of myths I see passed around about programs and benefits for kids and adults with special needs.

[The ABLE National Resource Center has a webinar coming up this Thursday, June 20, to bust that and some other myths about ABLE accounts.
https://zoom.us/webinar/register/WN_XBFVQO0TQBOyYT1iDCjOxg ]

Just as you must go to a doctor for a reliable medical diagnosis, you must go to experts for other types of reliable information. An attorney who deals with special needs issues is one great source, and our office is always willing to answer questions – the easiest way to get a question to us is by email legal@parkercounsel.com but you can also call and leave a message. We will get back to you. We are here to help as best we can.

Make sure you have accurate information about what help your child is entitled to and make sure you have accurate information about how to get those benefits.

Parker Counsel Legal Services provides estate planning, guardianship, special needs trusts, and other services to families who have children with developmental disabilities in Texas, Massachusetts, New Hampshire, and New Jersey. legal@parkercounsel.com 833-RED-BOOT (833-733-2668) or schedule a short information call at calendly.

New Hampshire ABLE Accounts

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If you have a child or young adult in your New Hampshire family with a disability, thinking about therapies and medical visits and educational life skills isn’t the only are you need to be thinking about. There are also financial concerns about how the child will meet housing and medical and other future needs.

The biggest financial necessity is Medicaid and social security benefits, but in order to get those and still have money from parents or other family members to supplement the small cash benefit from social security, careful planning is required. Special needs trusts, trustees, estate planning for family members, and guardianships or alternatives for those that need help are all required in order to maximize the resources available to provide your child with a good life. And now there is another tool that can work alongside the other planning tools – an ABLE Account.

ABLE accounts are available to anyone with a disability that began before the age of 26. The accounts allow up to $15,000 a year to be deposited with certain tax advantages, and without being considered a resource that will interfere with receiving medicaid and SSI. These accounts can also be managed and money can be spent from them by the individual with the disability directly, rather than by a trustee as with special needs trusts. This makes these accounts especially useful for individuals with physical but not cognitive disabilities who have money management skills.

You can view details of the New Hampshire program here, but New Hampshire families can open an ABLE account in any state.

Parker Counsel Legal Services assists families in New Hampshire in setting up special needs trusts, ABLE accounts, guardianships, and other planning needs for special needs family members. Find out how we can help you – call us at 833-RED-BOOT (833-733-2668).

Massachusetts ABLE Accounts

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Photo by Alexander Mils on Unsplash

An ABLE account is a type of bank account available to people who have a disability that began prior to the age of 26. The account allows individuals to accumulate their own money in amounts that would otherwise make them ineligible to receive SSI and MassHealth (Medicaid) benefits. They can also manage and spend the money in the account themselves, if they are otherwise able to, something that is not possible with the use of a Special Needs Trust.

ABLE accounts are especially useful for individuals who have their own income through a job or other source, but the accounts can be useful for other reasons as well. They may even allow an indi individual or their family to spend money to supplement housing costs without causing a reduction in SSI benefits.

ABLE accounts do not replace the need for a special needs trust, as trusts are able to hold far more money than an ABLE account and are typically used to receive an inheritance or life insurance from a parent. Your attorney can help you figure out how to use ABLE accounts and special needs trusts to maximize the amount of resources available to care for your child throughout their life.

Families in Western Mass, or other areas of Massachusetts, can find details of the state ABLE account program here. However, an ABLE account can be opened in any state, regardless of where you live.

Parker Counsel Legal Services helps families in Massachusetts with special needs members to set up a plan to care for their family member to the end of their life, using estate planning, special needs trusts, guardianships or other assistance, and other tools. Call us at 833-RED-BOOT (833-733-2668) to see if we can help you.

New Jersey ABLE Accounts

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People with developmental or other disabilities that began before they turned 26 years old can save money in special accounts known as ABLE accounts. These are a valuable tool for anyone who receives SSI and Medicaid, since it is the only way a person can save more than $2000 AND manage it themselves without losing SSI and Medicaid benefits they are otherwise entitled to.

ABLE accounts also provide some other neat benefits and in some situations can be used to increase the amount of SSI benefits paid. They can help families maximize the resources available to an adult child with special needs even if the child is not able to manage their own money. Used in conjunction with SSI benefits and a special needs trust, the ABLE account is proving to be far more beneficial than originally envisioned. Although not everyone can benefit from an ABLE account, it is worth talking with your attorney about to see if it can provide a little extra flexibiilty and resource for your disabled adult child. New Jersey residents can open an ABLE account in any state, but only one account is permitted per person.
http://www.ablenrc.org/state-review/new-jersey

Parker Counsel Legal Services provides legal consultation, along with estate planning, special needs trust preparation, and guardianship or alternatives to help parents prepare their adult disabled children for the future. For a short, free, phone call to duscuss your situation, give us a call at 833-RED-BOOT (833-733-2668) or email legal@parkercounsel.com