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.
If an individual becomes disabled prior to the age of 26 and is already receiving SSI and/or Social Security Disability Insurance (SSDI), the individual is automatically eligible to establish an ABLE account. However, if the individual is not currently receiving these benefits, they must first obtain a physician certification to set up an account.
These accounts have many tax advantages. They are able to grow tax-free and are exempt from Pennsylvania inheritance tax. Withdrawals are exempt from federal and state income tax when used for qualified disability expenses such as community living expenses such as education, housing, transportation, employment training and support, assistive technology, housing, personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and more.
Typically, the beneficiary of the account is named as the owner, but anyone may contribute. The combined yearly contributions may not exceed $15,000, which will be adjusted annually for inflation. The total account contributions over the life of the beneficiary cannot exceed the limit for Pennsylvania education-related 529 plans. In 2018, this amount was $511,758.
ABLE accounts do not need to be established by the beneficiary. If parent, guardian, or power of attorney opens an ABLE account on behalf of a minor or adult lacking capacity, they are held as the fiduciary and will remain in that role until they decide to relinquish control of the account.
Likewise, ABLE accounts need not be managed by the beneficiary. In Pennsylvania, any person designated in writing by the parent or guardian, a trustee of a trust for which the eligible individual is a beneficiary, if the eligible individual is receiving SSI or SSDI, the representative payee, or anyone else allowed by federal law, which includes parents, guardians, and powers of attorney can have “signatory authority.”
Prior to the ABLE Act, individuals with more than $2,000 were deemed ineligible for SSI and other means-tested programs. It is now possible for disabled individuals to hold assets that exceed this individual resource limit in an ABLE account and still qualify for public benefits as long as the account total does not hold more than $100,000. If the ABLE account accumulates more than $100,000, the disabled individual’s SSI benefits may be suspended. After the account balance is drawn back to $100,000 or less, their benefits will be reinstated. On the other hand, Medicaid is not impacted by this fluctuation.
ABLE accounts are now available in Pennsylvania. To open a Pennsylvania ABLE account, it is expected that you will go through the Pennsylvania Treasury Department and enroll online or through mail. You visit http://www.paable.gov/index.html to read details of the ABLE program in Pennsylvania, or to enroll in an ABLE account.
If you are a Pennsylvania resident looking to open an ABLE account, it is permissible to do so in another state. However, other state plan contributions are not state-tax deductible.
11/16/2018 – Center Valley, PA — Julieanne E. Steinbacher, CELA*, of Steinbacher, Goodall & Yurchak served as keynote speaker at the 2018 Pennsylvania Gerontology Conference, hosted by St. Luke’s University Health Network. She addressed the attendees on family caregiver agreements, essential estate planning documents, long-term care and special needs planning, retirement planning, and available community resources. Julie stressed the importance of keeping everyone in your inner circle informed by clearly communicating your wishes to loved ones, financial personnel, and medical staff.
“It takes a village to ensure your second half of life is the most rewarding for you and your family,” said Julieanne E. Steinbacher, CELA*. “A village consisting of family members, doctors, nurses, elder law attorneys, financial planners, and insurance agents all need to be on the same page when it comes to your care and doing what is in your best interest. A piece of advice that I always give to my clients is to communicate, communicate, communicate! Communication is the glue that holds your wishes intact and ensures they are followed.”
The theme of this year’s conference was “Conversations for the Second Half of Life.” Doctors, lawyers, social workers, nurses, therapists, and dietitians all came together to share innovative ideas and to lay formidable foundations on best care options for an aging baby boomer population. Attendees had the opportunity to request a copy of the book, Protect Your Family! What You Really Need to Know for the Second Half of Life. Attorney Steinbacher co-authored the book with other leading elder law attorneys from across the country. This indispensable resource offers readers the essential tools and knowledge for effective long-term care planning. To request a copy of the book, please call 1-800-351-8334 or visit www.paeldercounsel.com.
*Certified as an Elder Law Attorney by the National Elder Law Foundation.
Julieanne E. Steinbacher, CELA*, is the founding shareholder of Steinbacher, Goodall & Yurchak, an elder care and special needs law firm offering quality representation to clients throughout Pennsylvania. Since its beginning, the firm has dedicated itself to practicing law with extraordinary standards of ethics and values. The vision of the firm has been to provide individuals and their families with a unique plan to protect their assets for their spouses and future generations, while providing for their immediate and long-term needs. To schedule your appointment, call 1-800-351-8334 in the Lycoming and Centre County communities.
11/09/2018 – State College, PA — H. Amos Goodall Jr., CELA*, of Steinbacher, Goodall & Yurchak is scheduled to appear as a guest on an internationally-syndicated podcast, Parents are Hard to Raise. Amos will be discussing the latest changes to VA pension regulations. The host of the show is Diane Berardi who is nationally recognized as the authority on elder care.
H. Amos Goodall Jr., CELA*, began practicing in Centre County in 1976. He is an advocate of community service and is a member of the Special Needs Alliance—a private network of attorneys whose mission is to help enhance the quality of life for people with disabilities by coordinating private resources with public benefit programs. Attorney Goodall is a Fellow of the American College of Trust and Estate Counsel, among many other community initiatives. He earned his LL.M. degree (with honors) in Elder Law from Stetson University School of Law. Attorney Goodall is currently serving as acting President of the National Elder Law Foundation (NELF).
Diane has spent more than 35 years practicing as a gerontologist and serving as an elder care consultant. Parents are Hard to Raise debuted in early 2017 and has seen great success. The show has devoted Baby Boomer and Gen-X listeners who tune in each week from across the globe. Listeners get the latest tips, tricks, and counterintuitive strategies on helping their aging parents deal with changing physical, emotional, medical, financial, and social needs.
Diane keeps the show light and fun while also being informative. The upbeat and easy-to-listen-to format has drawn rave reviews from all 50 states, Canada, Mexico, United Kingdom, Italy, Spain, Germany, France, New Zealand, Australia, and the list goes on. Find out what makes the show special by becoming a free subscriber. You can listen to the podcasts anytime, anywhere, and on any device. Sign up and start listening today! Visit https://parentsarehardtoraise.org/how-to-listen/.
*Certified as an Elder Law Attorney by the National Elder Law Foundation.
Steinbacher, Goodall & Yurchak is an elder care and special needs law firm offering quality representation to clients throughout Pennsylvania. Since its beginning, the firm has dedicated itself to practicing law with extraordinary standards of ethics and values. The vision of the firm has been to provide individuals and their families with a unique plan to protect their assets for their spouses and future generations, while providing for their immediate and long-term needs. To schedule your appointment, call 1-800-351-8334 in the Lycoming and Centre County communities.