For nearly a decade, people with disabilities have had the option to accumulate savings in a special tax-free account without risking their means-tested public benefits. In 2024, the annual limit on how much money one can deposit into these savings vehicles, known as ABLE accounts, will rise, allowing individuals to add up to $18,000 per year.What Is an ABLE Account?Many people across the disability community rely on such government assistance as Medicaid, Supplemental Nutrition Assistance Program (SNAP) benefits, or Supplemental Security Income (SSI). Yet having too many assets to their name can disqualify them from receiving these often critical benefits. For example, in most states, the resource limit to qualify for Medicaid is just $2,000. In 2014, Congress signed the Achieving a Better Life Experience (ABLE) Act into law to help address this issue.Individuals with an ABLE account can save up to a total of $100,000, tax-free, while remaining eligible for public assistance programs. Family members, friends, and others can make contributions to the account, too. The disabled person can then use these funds to help maintain their independence by spending them on disability-related expenses, including assistive technologies, education, transportation needs, vacations, legal fees, and health care.Unlike a special needs trust (SNT), an ABLE account can be opened by the individual with the disability. This offers them considerably more control over the account funds compared with an SNT. Starting in 2024, the annual limit on contributions to ABLE accounts will be $18,000, up from $17,000 in 2023. Through the end of 2025, ABLE account owners who work can contribute their employment income to these savings vehicles even beyond the per-year deposit limit. (Learn more about these rules under the ABLE to Work Act.)The idea for these accounts derived from the concept of a 529 college savings plan. Similar to a 529 plan, funds in an ABLE account grow tax-deferred over time. In addition, each state administers its own ABLE account program.To qualify, you must meet the Social Security Administrations strict definition of disabled. You also must have incurred your disability before age 26. (Note that the age cutoff will shift to age 46 come 2026. According to estimates, this age adjustment will result in roughly 6 million more individuals becoming eligible to open these types of savings accounts.)Why Open an ABLE Account?People with disabilities are among those most at risk for financial disaster. According to research, just 10 percent of people of working age who are living with a disability are financially healthy.ABLE Accounts, or 529A accounts, can serve as a form of future financial support for these individuals. Yet the vast majority of those who could benefit from these accounts remain unaware of them. As of 2022, 8 million people were eligible for this type of account, yet a mere 120,000 had one in place.Get Support With ABLE Accounts To learn more about setting up this type of savings account, consult with Ashley Day Special Needs & Elderly Law at 251-277-3377.
Today, we're discussing how to choose between appointing a guardian or conservator. When deciding what kind of protection you need in an aide, there are many things to consider, including:1. What is your personal capacity to care for yourself?2. What areas of life do you need supervision over? Healthcare? Daily maintenance? Or, do you only need help safeguarding finances?3. How extensive is your estate?4. What is the difference between a guardian and a conservator?5. What combination of conservator/guardian would you most benefit from? Guardian only? Conservator only? Or both?Differences Between Guardians and Conservators A guardian is a person (or an institution) who is given authority to act on behalf of a protected person as though they were that person. A guardian can be given a full guardianship over all aspects of your life, or authorities limited to certain areas such as health care, education, or finances. A conservator is given authority only over your finances. Like a guardian, a conservator must be appointed by a court order. However, unlike a guardian, a conservator cannot make personal decisions for you. Conservators DutiesOnce appointed, a conservator becomes the trustee of your estate, which includes income (wages, social security, annuities), real property (a house, other buildings, and land), as well as stocks, bonds, retirement funds, etc. In fact, once appointed, and unless specifically limited, a conservator has all of the authority given by law to conservators, additional authority given to trustees, and the authority of the protected person, except the power to make or change a will. This amounts to a lot of power. Thus, when acting on your behalf, a conservator must act as a prudent investor would. A conservators duties and powers include:Managing your incomeContinuing or participating in the operation of your business or enterprises Making necessary estate paymentsOrganizing and protecting your assetsAppraising and safeguarding your propertyMaking prudent investmentsPaying or contesting any claims against the estateRegularly reporting to the courtThe list above is by no means exhaustive. Because a conservator does have so much power, their authorities and responsibilities are highly regulated. An in depth conversation about these powers is outside of the scope of this blog post, but must be understood and tailored to your specific needs in order to best serve them. Deciding What Is Best For YouIf your are able to care for yourself in every area other than their finances, you might only need a conservator. If you need help in other areas of their life, you probably need a guardian. If your capacity to care for yourself is diminished and you have an extensive estate, you might need both a guardian and a conservator. We understand that deciding how to best plan for your future might seem complicated and daunting. We can help you balance the choices that you have with your needs. Contact us today. email@example.com skvlegal.com/book-online
Your Kids Will Thank YouOne of the questions I often ask people who come to our workshops, is What do you want to accomplish when doing your estate plan? Most people tell me they want to protect stuff from the nursing home, while others want to be smart about taxes. Some people say they just want to make things easy for their family. They dont want to be a burden and they want to keep the family peace. With this goal in mind, I want to share some tips on how we can put together a meaningful plan for your family to reduce their stress when you are affected with health issues. When you pass away, your family will go through the grieving process, but you dont want it to be a stressful time from a financial and or legal standpoint. Rather, you want to set your kids up for success.What Does It Mean By Setting Your Kids Up For Success? Often, when people do an estate plan theyll want to write a Will. When they pass away, the kids tend to take over as executor or trustee. If a parent gets sick before they pass away, the kids may take over as power of attorney or guardian. What Is Guardianship?Lets assume that people dont do any planning, and have no legal documents. Should they become incapacitated, their kids will end up in guardianship. Lets take Fred for example, who hasnt done any planning, and is a widower. If he has a stroke, his kids need to get control of the money and make decisions. However, if Fred has not done any planning, his kids cannot make decisions simply because they are his children. They have to go through a process called guardianship. This means taking Fred into the courthouse to be declared legally incapacitated, by a judge. The judge may request that the guardian reports back regularly, so that the judge can make sure the guardian is the right person to make the decisions. This can be an expensive legal process, which can also be emotionally challenging.Can Guardianship Be Avoided?Its easy to avoid the guardianship process by simply having a Power of Attorney document. This document lists somebody to be your agent, who will be your legal and financial decision maker. In the event that you become incapacitated, somebody else can act on your behalf. They can walk into any bank or financial institution with the Power of Attorney document, and do what needs to be done, while acting in your best interests. Fortunately, we dont need the courthouse to make it happen. While we cannot prevent getting sick as we get older, whether its having dementia or a stroke that affects us, we can give our kids the legal authority to make decisions. Communicate With Your KidsIn addition to having a Power of Attorney, you also need to have a Will or a Trust in place. We encourage our clients to use a trust instead of a Will, to avoid going through the probate process. Regardless of whether your child is the executor of a Will or the trustee of trust, when you pass away, they will have roles and responsibilities. It is important for you to communicate with your children to tell them about what their future roles and responsibilities will be. It is not enough to just create a document and leave it on the shelf. You need to tell your kids where your assets are, where you bank, who the financial advisor is and who the attorney is. Avoid The StressIt often happens after a parent has passed away, that the adult children come to us with a bag of their parents documents and paperwork, trying to make sense of it. The kids are not only grieving after losing a parent, but they now have to sort through mom or dads belongings and paperwork. They are also confused about what their responsibility is as an executor or trustee. I urge you to make it easy for your kids to fulfil their roles, by sharing details of where your assets are. You dont have to share details of the value of your assets while youre still living, but I encourage you to share the necessary details with your kids. This will help them with the administration and avoid a stressful situation.Why You Need An Advanced DirectiveWho would make any health care decisions, if you are affected by a health issue and cannot make decisions? You need to decide who that person will be, and communicate with them. If you are elderly woman with no surviving spouse, one of your children will have to make decisions if you are unable to. You would need a document called an Advanced Directive, stating what must be done if you get sick or become incapacitated. It is wise to appoint two different family members to make financial and healthcare decisions respectively.Consider Having A Life Care PlanI encourage you to consider enlisting our help to create a Life Care Plan, which we offer at Sechler Law Firm. This plan takes into consideration where you will get care, and how you will pay for it. It means your family will not have to worry about whether they have made the right decision about your care. We have a social worker and a healthcare professional on our team, because life care planning is more about healthcare planning than it is traditional legal work. However, we consider it to all be part of doing estate planning. To find out more, call 724-564-6615. You can also learn more by coming to one of our Three Secrets Estate Planning Workshops. Call to register for an upcoming free workshop!