First of all, let’s get that ABLE acronym straight.
The ABLE Act is federal legislation that was passed back in 2014 during the Obama presidential administration. The commonly used shorthand designation does have a formal tag, which is Achieving a Better Life Experience.
Those words succinctly spotlight the direct goal of the federal ABLE enactment, which is this: tax-advantaged money benefits made available to select individuals with disabilities and their families.
That is a laudable aim, of course, and something that is strongly supported by legions of Californians and other Americans nationally. Many individuals and families understandably seek to gain a firm grasp on how a program like ABLE (and other government-authored initiatives) can benefit them and improve the life of a loved one. A seasoned estate planning attorney deeply grounded in benefits programs linked with special needs can provide on-point information and help them implement strategies that optimally promote their interests.
In many instances, an ABLE account might logically serve as a foundational planning tool for families with an eligible relative. An account holder can spend saved money on any item deemed by the government as a “qualified disability expense.” The bullet-point list enumerating what qualifies is quite lengthy. Moreover, all account earnings and distributions are tax-free.
Contributions are not deductible, though, and there are other potentially limiting factors (“qualifications” might be an apt term here) that interested parties might reasonably want to know about. Those can be fully identified and discussed with an estate planning attorney, optimally one with an integrated background in law and tax matters.
We welcome contacts to the Bay Area Law Offices of Connie Yi, PC. Our principal attorney is both a proven estate planning lawyer and CPA who routinely counsels diverse and valued clients on matters spanning the virtual universe of administration concerns.
Those encompass issues and opportunities relevant to ABLE and other tax-advantaged tools of potential utility to disabled individuals.
Our next blog post will take a closer look at ABLE. It will do so from the perspective of how it might logically be viewed and applied as part of a strategy that also considers the well-established benefits conferred through a special needs trust.