Pennsylvania Achieving a Better Life Experience Act (ABLE Act)
Brittany L. Moore, Esquire
In 2014, the Achieving a Better Life Experience Act (ABLE Act) opened a door at the federal level to give each state the opportunity to set up programs for people with disabilities and their families to establish tax-advantaged savings accounts without impacting the disabled individual’s public benefits.
On April 18, 2016, Governor Wolf signed the Pennsylvania Achieving a Better Life Experience Act (PA ABLE Act). The PA ABLE Act was passed to provide more financial options and security to individuals whom became disabled prior to age 26. This is to be accomplished through savings accounts established for benefit of the disabled individual in which funds may accumulate tax-free to pay for qualified disability expenses without jeopardizing their eligibility for need-based programs such as Supplemental Security Income (SSI) and Medicaid.
Recent Changes to Pennsylvania’s Power of Attorney Law
A power of attorney (“POA”) is a foundational estate planning document that allows another individual to act and make decisions on your behalf. Such authority is especially important if you ever lose mental capacity or are unable to act. In the written POA, the individual executing the document (the “principal”) appoints another individual (the “agent”) to make financial or health care decisions for the principal. Durable powers of attorney are not affected by the subsequent incapacity of the principal.
If you have an existing power of attorney, you may already be well acquainted with the document. However, you may not be aware of recent changes to Pennsylvania’s law governing financial powers of attorney.
Recently, the law in Pennsylvania changed as it relates to powers of attorney that deal with financial directives. Act 95 was signed into law in July 2014 by Governor Tom Corbett. Parts of the law became effective immediately and the remaining portions were effective as of January 1, 2015.
What Are You Waiting For? A Special Needs Trust is the Best Option
What Are You Waiting For?
Let's say you have a child with "special needs," or another family member. If your estate plan doesn’t have a special needs trust, why not? Here are a few of the excuses I’ve heard, and some thoughts to consider:
I don't have enough money to justify a special needs trust. Really? You don't have $2,000? Because that's all you have to leave to your child outside a special needs trust to jeopardize their SSI and Medicaid eligibility.
I can't afford to pay for the special needs trust. It can be expensive to get good legal help. But the cost of preparing a special needs trust for your child is likely to be much less than the cost of care for a couple of months, which is what will happen if you die without a special needs trust, since it will take that long to maneuver an alternative plan in place. Even if there is no loss of benefits, the cost of fixing the problem after your death will be several times that of getting a good plan in place now, and the result will not be as good.
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