Does anyone have an ABLE account for a family member?

[robinb]

My DH and I are thinking of opening up an ABLE account for our nephew who has autism. My nephew is 24 and his disability is severe enough that he cannot work and we would like to help pay for essentials. My SIL died a few years ago and BIL struggles financially. I do not want my nephew to suffer from his father's poor decisions bit I do understand that my nephew can select my BIL to have access to the account.

If you have one for a family member, do you like it? Is it easy to use? We are also thinking about starting a Special Needs Trust for him and using that to fund it yearly to avoid possible Medicaid clawback payback. Any hints or tricks? We would, of course, contact an an attorney about the Special Needs Trust but the ABLE account looks like something that we can start right away.

 

[NewbieMom]

Is your nephew able to manage the funds himself, or would need the help of a trustee? If a trustee is needed, it's best to setup the trust and put the able account into the trust. The account owner of the able account has to be the person with the disability (in this case, your nephew) which gives them full control of the funds. If he is able to manage the funds responsibly, opening one immediately is fine. The other thing to think about is you're limited to the annual gift allowance. For 2024, that's $18k. Time is against you for 2024 contribution as it's by calendar year. Feel free to PM me, if you have more specific questions.

 

[lanejudy]

What is your goal for the use of the ABLE account? If the ABLE account is used for his living expenses that may impact other benefits (SSI/SSDI). As PP noted above, your nephew is the owner of the account and while someone can assist him with finances it is available for him to use as he wants even if it's not a qualified expense (he then has to deal with the tax implications). Does your BIL have guardianship including financial? If so, he would have access to use the funds on your nephew's behalf -- again accepting any tax implications for non-qualified withdrawals.

Ideally the ABLE account should be part of a broader plan for the financial support of the disabled individual. A trust may be a better option. I recommend speaking to a financial advisor.

Medicaid clawback will occur unless there is a qualified individual named as successor to the account.

 

[robinb]

My nephew (DN24) will not be able to manage the funds himself, so he will need help from a trustee. He has been weighing on my mind for the last year and I have been looking for ways to help and to come up with a plan before I offer it. We have the funds to help him but I am just not sure how. The ABLE account seemed like a good start.

I do not know if my BIL is legally his guardian. My guess would be that he is not because that would require effort. My BIL is a real mess-up to start with and went through a severe depression and mental health episode after my sister died. He essentially crawled into a hole and didn't come out. He never asked for help and I didn't find out the he needed help until it was way too late. He lost his house for failure to pay $3,000 worth of taxes ... an amount that I would have gladly given him no strings attached. I found that out about a year ago when the scumbags who bought the house from the county tax sale evicted him for failure to pay rent. I also found out at the same time that my nephew was NOT receiving SSI/SSDI and I expressed my shock and surprise ("What the heck! Why not?"). My BIL recently added severe heart problems needing bypass surgery and job loss (one of many) to his personal resume in the last 4 months.

I guess I'll have to talk to my BIL before I have a plan and find out my nephew's legal and income status. I'll ask him, (1) Is he DN24's legal guardian, including financial? (2) What programs is DN24 currently enrolled in? SSDI? SNAP? Others? If he is not enrolled, I will try to facilitate it with a group call to his local Aging and Disability Resource Center.

Anything else I should ask?

 

[robinb]

Sorry, I have no idea how I put this on the Budget board. Board moderator, please leave it here or move to another board as you see fit.

Edited, I asked this to be moved to the DISAbility Board.

 

[easyas123]

OP - I just want to say that you & your husband are some seriously stand up people to be looking out for your nephew like this. I know it must be difficult for you guys, but I just wanted to let you know when I read this it gave me a little lift and helped me to reevaluate the way I look at some difficult decisions that will be coming our way in the next 0-2 years.

 

[lanejudy]

I do not know if my BIL is legally his guardian. My guess would be that he is not because that would require effort.

Was your sister a guardian? Sorry for your loss, and you don't mention how long she has been gone. But it's possible both parents petitioned for guardianship before he reached age 18. Or maybe not if he also isn't receiving any disability benefits.

If he is not enrolled, I will try to facilitate it with a group call to his local Aging and Disability Resource Center.

You are a good soul to watch out for him. This will likely be a journey but set him on a positive path for the future.

 

[robinb]

Was your sister a guardian? Sorry for your loss, and you don't mention how long she has been gone. But it's possible both parents petitioned for guardianship before he reached age 18. Or maybe not if he also isn't receiving any disability benefits.

My sister has been gone for 5 1/2 years and my BIL lost his house to the tax sale bottom feeders 2 years ago after not paying taxes for the previous two years straight. I really have no idea if they were co-guardians when DN24 turned 18. I do know that he continued in high school past when we would have normally graduated. My sister and BIL were peas in a pod so it's not likely that they did anything if it had any level of difficulty to accomplish.

You are a good soul to watch out for him. This will likely be a journey but set him on a positive path for the future.

OP - I just want to say that you & your husband are some seriously stand up people to be looking out for your nephew like this. I know it must be difficult for you guys, but I just wanted to let you know when I read this it gave me a little lift and helped me to reevaluate the way I look at some difficult decisions that will be coming our way in the next 0-2 years.

Thank you both .

 

[barkley]

find an attorney in the state your nephew lives in that specializes in both estate planning AND elder law. I am retired from social services and saw far too many disabled individuals disadvantaged by the most well meaning efforts of family in these matters. that said-i have a disabled adult son (autism) who we are guardians of (and it is no walk in the park-the vast amount of paperwork/proof of capability/need we have to provide to the courts on an annual basis is staggering). we used an attorney of the type I mentioned to set up our estate planning. we located a financial institution that would manage trusts and was familiar with able accounts. the attorney drafted our estate plan and we took a copy to the financial institution to review. they found some wording they were concerned could be interpreted against our son with regards to his SSDI. the attorney took note, made some changes and conferred with their social services specialists to construct a financial plan to best protect and benefit our son.

(2) What programs is DN24 currently enrolled in? SSDI? SNAP? Others? If he is not enrolled, I will try to facilitate it with a group call to his local Aging and Disability Resource Center.

they can be of help as can adult protective services if you feel your nephews physical/mental and financial best interests/needs are not being appropriately met.

Anything else I should ask?

if he's getting SSDI has anyone applied for slmb or qmb medicare savings program for him? this is a program that would pay for his mediCARE premium if his SSDI is low enough (2024 income cap is $1526 per month) or QMB (2024 income cap is $1275 per month) and pays the premiums/co-insurance/copays and deductibles).

is there a legal guardianship set up? if so-who is the guardian? if he's getting SSI or SSD does he get his funds directly or does he have a protective payee? how are his funds being spent/what oversight is occuring (if any).



best wishes-thank you for your efforts on your nephew's behalf.

 

[HopperFan]

Short ~
~ Been DS legal guardian for 22 years with no court reporting. Varies by jurisdiction.
~ Am not a Conservator because he can't really have assets so not worth the work, per the Court.
~ DH retired this year which sent all his benefits in an upheaval needing a lawyer to help.
~ During process updated his Special Needs Trust ...
~ Lawyer said to open ABLE account for him to save some as his benefits changed from SSI to SS-DAC based on DH income.

I understand the benefits of the ABLE but I don't like the CONS, which is if he is able to save some money for his future and there is an unexpected death ... all that money saved is gone to the government. Even though his family has provided much of his care and needs, they are cut out. I will never allow this account to accumulate much and will do that by using it and not his SNT for his needs. There very well will come a time he has to move out of our home and I want the SNT to be there is assist his siblings on getting him the best care.

Unfortunately in your situation I would not do an ABLE for him. By natural order if he isn't capable of managing his funds his father will be the one. He would have complete access to the account and the funds. You would be just handing him the money. If I were you I would set up the SNT which could be left completely in your control or you could pass it on to one of the trustee companies that do this full time. We have one of those companies lined up in DS trust in case we are both gone and siblings want someone else to do that process. They would only allow funds to be used under the terms of the trust, which should protect any benefits he may be receiving. At his passing you decide where that money goes left in the trust. For my DS his trust is called the "My Name" Supplemental Needs Trust for the Benefit of "Son's Name". We are the trustees and we have the final say on how any funds are to be used within context of law. At DS passing the funds will be split between his living siblings, even if we are still alive.

I feel like your best way to help besides the SNT is to find out if he is qualified and receiving his benefits he is due. Does he go to a day program? If so how is that paid? Does he have a day program waiver? If not maybe help them apply for the waiver as there is likely a wait list? Has he applied for SSI and Medicaid? That would give him health insurance. Is there a need for him to possibly move to a group home or other living arrangement? That would be another application and wait list. Even if he's not ready now, being on the wait list is a good idea in case need comes up later. Sounds like he mostly needs an advocate to help them through the processes, and then some savings for later that is protected against seizure.

NOTE: Since DH retirement DS only has Medicaid for insurance. He will not qualify for dual eligibility ... having Medicaid & Medicare working together ... for two years. At least presently nephew should be able to stay on Dad's health insurance (if he has it) though he might have to provide documentation.