ABLE is Beneficial for Trusts to Help the Disabled in Florida
Floridians who have a loved one with disabilities or other particular needs will have a great deal to consider as they formulate an estate plan. A special needs trust is a useful method to ensure that their loved one will always be cared for even after they are gone, but this can be costly. With that in mind, examining options can be both wise and help to save money while making certain that the needs will be taken care of. Since federal taxes on trusts are inordinately high - close to 40 percent - a federal law that came into effect in 2014 is something to think about.
This law, the Achieving a Better Life Experience (ABLE) Act is a savings account that will be created for people with disabilities and their families. As the money accrues, it can be withdrawn without tax implications. These are able to be used for expenses such as housing and health care and there is no limit on the number of times it can be withdrawn. One particular family in Virginia assisted in the creation of ABLE to care for their daughter with Down syndrome. This hit particularly close to home because the mother and father had sought out alternatives for their daughter and the father later died.
There are eight states in the U.S. that take part in ABLE and Florida is one. Other states are planning to join during the coming year. This is a useful tactic for parents who have a loved one who will need various services, but it also provides the opportunity to decide when money should be taken out in a discretionary manner without having to debate whether or not it is worth the tax consequences. The beneficiary must have a diagnosis of a qualifying disability by the age of 26 in order to take part.
Since ABLE is a relatively new program, some might not be aware of its existence or its potential benefits in comparison with a special needs trust. With any strategies regarding trusts and advanced estate planning, having legal help is the key to decide what is right for the individual. Calling and discussing the matter with an attorney can be useful to pick the right one for the specific needs.
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Rignanese & Associates is available to work with clients on their unique situation. Please reach out to us at our new headquarters at 141 5th Street NW, Suite 300, Winter Haven, Florida 33881 at 863.294.1114.
On behalf of J. Kelly Kennedy, Attorney/CPA, PLLC, which has been acquired by Rignanese & Associates, PLLC.
Source: cnbc.com, "Tax-advantaged accounts help children with disabilities," Jessica Dickler, Dec. 19, 2016
Tags: Estate Planning