Prince William County
Prince William County
Individuals who have disabilities often require government assistance to cover the costs of professional support and care. However, programs such as Medicaid and Supplementary Security Income (SSI) are means-tested, so eligibility is determined based on an individual’s or family’s income and assets. People who have disabilities must carefully manage their finances in a way that allows them to qualify for the help they need.
Two common options are ABLE accounts and Special Needs Trusts. Understanding the differences between these two financial planning tools can help you determine which might work best for you. Keep reading to learn more or contact our Fairfax County special needs lawyers today.
What Is a Special Needs Trust?
A Special Needs Trust provides a legal relationship between a trustee and a beneficiary who has a disability. This specialized trust ensures that a person with a disability qualifies for government benefits. There are two types of Special Needs Trusts:
There are limits on how funds from Special Needs Trusts can be used. The funds cannot go toward basic expenses otherwise funded by government programs. This includes:
What Is an ABLE Account?
The Achieving a Better Life Experience (ABLE) Act of 2014 established state-run savings programs, called ABLE accounts, for people with disabilities. These tax-advantaged savings accounts hold funds exempt from Medicaid and SSI asset and income limits. They are available to people diagnosed with a disability before age 26.
Unlike trusts, which the trustee controls, the beneficiary of an ABLE account always maintains control over the funds within it. These funds can be used for expenses such as:
Contributions to an ABLE account can be made by family members, friends, or the beneficiary. They are relatively easy to establish and can be funded immediately with small amounts. However, keep in mind that contributions may not exceed $15,000 per year, and the total amount in the account may not exceed $100,000. Otherwise, the beneficiary risks being disqualified from means-tested government benefits. Furthermore, ABLE accounts are not available in every state.
Speak to a Fairfax County Special Needs Attorney
If you have concerns about whether income or assets might disqualify you or a loved one from receiving government assistance, speak to our experienced Fairfax County special needs attorneys today. We can advise you on whether an ABLE account, Special Needs Trust, or both might be right for you. Contact us at 703-492-9955 to schedule a consultation.
David Wilks has practiced law in Northern Virginia and
Prince William County for more than thirty years as
a tax lawyer by training and education. Read More