January Newsletter

Congress and Special Needs

In December 2014 Congress passed legislation that will have major impact on families with special needs members.

ABLE ACT

The Achieving a Better Life Experience Act of 2014 better known as the ABLE Act is designed to improve the quality of life for individuals with disabilities. It allows families to fund an account in which a disabled family member can withdraw monies for disability related expenses.

The Act allows the creation of a bank account for the benefit of a qualified individual, in which contributions can be made to the account to be used for disability related expenses. A qualified individual is someone whose disability occurred prior to the age of 26.

Some rules:
  1. Any contribution by a single person to such an account may not exceed the annual gift tax exclusion (currently $14,000) in effect for the year in which the contribution is made.

  2. An account over $100,000 will suspend Supplemental Security Income (SSI) benefits but not Medicaid eligibility.

  3. Upon the death of the beneficiary, Medicaid may be entitled to repayment from funds credited under The ABLE Act for medical assistance Medicaid has provided to the beneficiary.

  4. The accounts are tax favored.

  5. States must establish ABLE Act programs before the accounts can be established.


NEW LEGISLATION ALLOWS SURVIVIOR BENEFIT PLAN TO FUND SPECIAL NEEDS TRUSTS

The Survivor Benefit Plan for Payment or SBP To Special Needs Trusts allows a veteran who retires from service to have a portion of his or her monthly annuity paid into a special needs trust for the sole benefit of that veteran’s adult disabled child.

Prior to this legislation, a veteran who left survivor benefits to an adult disabled child could not shelter the benefits in a special needs trust. Instead, the benefits had to be paid directly to the child, which jeopardized that child’s SSI and Medicaid coverage. This new legislation, under the National Defense Authorization Act, allows the monthly SBP annuity to be paid to a supplemental or special needs trust.

This provision is of particular importance to the large military community in the Washington DC metropolitan area.

Additional newsletters on the Able Act and change to the SBP under the National Defense Authorization Act of 2015 will follow to help guide individual and families on these new important provisions.

Contact us at (703)379-0442; ed@zetlinlaw.com



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