Why Your Special Needs Child Should Have a MiABLE Account? (Episode # 303)

0:30 Well, good afternoon, Michigan Anders. It is Tuesday, May twenty eight, twenty twenty four, and this, of course is Tuesday with Tom, Michigan's only weekly Internet show where we do answer your questions about a state planning and a state settlement in Michigan, and we don't send you a bill. I'm your host, Tom Doyle, a state planning attorney, lifelong Michigan resident, an ambassador for all things good in this great state of mel Michigan. Welcome to today's program, and welcome back from your long Memorial Day weekend.

1:11 Well, last week's episode, do you need a special needs trust for your disabled child? If you have a disabled child and they are on government benefits, some needs based government benefits, and you're considering your estate plan and whether or not a special needs trust might be appropriate for you as part of your estate plan, I certainly encourage you to listen to last week's episode where I talk about the different types of special needs trusts that could be created for the benefit of your child. And in keeping with that same theme, today's today's show is why your special needs child should have an mii able account. But please remember what I'm about to discuss during The program, as always is for educational purposes only. It is not intended to be legal advice. You need to work with your attorney to determine what is appropriate for you and your estate plan. Why your special needs child should have what's called an am i ABLE account m i ABL account. Am i ABLE stands for Michigan Achieving a Better

2:46 Life Experience. It's a program created by the state of Michigan in response to the Federal Able Act of twenty twenty four, and essentially, what that federal law did was allowed states to create certain tax advantage savings accounts for individuals with disabilities. Those these accounts enable an eligible individual to save and invest money without jeopardizing their ability for crucial government benefits such as Medicaid and supplemental Security income. So the idea being, if you have a special needs child who's on some sort of needs based government program, you know that there are limitations on how much they can own in order to avoid them losing their government benefits. Well, the purpose of the ABLE APT and in Michigan them i ABLE program, is to allow these special accounts to be created that will then enable your special needs child to save and have money invested without jeopardizing their eligibility for government benefits such as Medicaid and SSI. So some key features of the amiable accounts one are the tax advantages. First, tax free earnings. Just like an educational

4:24 five twenty nine program or even just like a wroth IRA program, the earnings that the account has inside it grow tax free. So as contributions are made into the amiable account and they increase in value, they will grow tax free, similar to that five to twenty nine educational account or roth IRA. And just like that five to twenty nine educational account, withdrawals that are used for what are called qualified disability expenses are tax free withdraws, So some significant tax savings that grows tax free, and as long as the proceeds that are in the account are used for qualified disability expenses, those withdraws will also be tax free. State taxes. In the state of Michigan, there is a State of Michigan tax deduction available to a contribution to an amiable account able to deduct that I your Michigan income tax returns. State income taxpayers can claim up to five thousand dollars deduction for single filers and ten thousand dollars for joint filers for

5:56 am able contributions, so the parent, if they are going to be making contributions in that account, can take advantage of these Michigan income tax deductions as well. The funds that are in the am i able account, though, aren't going to count as assets when determining eligibility for programs like Medicaid and SSI. That's the whole point of creating them, is to have funds in an account that will protect the child's eligibility for programs like Medicaid and SSIS so long as so long as is a s important consideration, there cannot be more than one hundred thousand dollars total in the child's am i able account. So as long as you stay under that one hundred thousand dollars total in that account, those assets that are in that account are not going to disqualify them from federal programs like Medicaid and SSI. There's also fairly broad flexibility in what those funds are going to be able to use for. When you look at what qualified disability expenses are, it's going to include things like education, health and wellness,

7:30 housing, transportation, legal fees, financial management, employment, training, and support, assistive technology, personal support services, oversight in monitoring services, and funeral and burial expenses. So are the broad range of expenses that are going to qualify for using those proceeds. And as I said, when the funds are withdrawn from the account for those qualified disability proceeds, it won't be taxable when they're taking out, So a broad range of qualified disability expenses available for your child. Now there are going to be, as in everything, contribution limits. So I already talked about, one hundred thousand dollars is the total that you can have in that am i able account. And side note a child can only have one am i able account, so one hundred thousand dollars total in that account. There's also, though, going to be annual contribution limits, and in twenty twenty four, that annual contribution limit is eighteen thousand dollars per individual contributions into that am i able account. In twenty twenty four, that amount does get adjusted annually based upon an inflation factor. In

9:01 addition to that, though, if your child is working and they have that disability, they they that disabled child can contribute an extra amount, which would be up to twelve thousand and sixty dollars in twenty twenty four that would be coming out of their annual earnings that they could that they can contribute on their own. In addition, though since the Miable account is considered a five to twenty nine account by the IRS, well, you have to remember the maximum contribution limit for all Michigan five twenty nine plans for a particular beneficiary is five hundred thousand dollars. So if you have the Miable account, which has a total limitation of one hundred thousand, if you had that one hundred thousand dollars in the Amiable account, there would be a limitation now of only an additional four hundred thousand dollars that could actually be in a five to twenty nine account.

10:18 Accounts are pretty easy to manage. They're designed to be user friendly, not complicated. In fact, you normally qualified to have a debit card and you'll be able to use that debit card to your child will be able to use that debit card to make qualifying withdrawals from the account, so they're fairly easy to manage. Additionally, perhaps there are friends and other family members who would like to make contributions under the Michigan program, there's what's called a you gift that's a feature of the able account that allows friends and family to contribute to the account. So in order to do that, you'll find more information at the website. But once you log into your website, there's basically a code that you will have that your child would have that they could share with other friends and family members that they can then use to make online contributions into that child's am i able account. So what are the qualification requirements in order to open an am i able account. Basically, your child or the individual's going to have to have a qualifying disability that was present before the age of twenty six, and they have to be entitled to benefits based upon blindness or disability under the Social Security Act, or have a similar severe disability that is

11:54 documented by a physician. So those are the requirements again, eligibility requirements, a qualifying disability that was present before the age of twenty six and second to be entitled to benefits based upon blindness or disability under the Social Security Act or have a similar severe disability documentation documented by a physician. Well, if you put all that together, i able accounts can be game changers for your disabled child. Why because historically individuals with disabilities, again, they face strict asset limits in order to maintain eligibility for those critical public funds. Now, with then am i able account, they have the ability to have a safe and effective way to build up additional financial security for him or herself. Think about it. Let's say you have a child with cerebral palsy. Before am i able accounts, you would perhaps be concerned about saving up money in your child's name, obviously, because if there was too much in your child's name, that child would now not qualify for Medicaid. Now, your child, though,

13:26 can have an amiable account where her family contributes regularly to it. The account can be used to cover specialized therapies, perhaps save for a modified vehicle, all different abilities that that account be used for to essentially enhance your child's independence and quality of life. So how do you get started? Well, obviously there's a website for everything now, and that website is www dot miia b l E dot org. That's miiable dot org. Pretty straightforward. You're going to find information on how to set up the account, how to access funds from the account, what the funds can be used for what investment options there are going to be. If you if you kind of look at Michigan's five twenty nine educational programs, where you know there's different investment options available within the five to twenty nine plan. Similarly, there are going to be different investment options available inside this Amiable account. So if you have a special needs child. Now also one other point, the Amiable account isn't really designed to replace a special needs trust. It might be appropriate to have both a special

14:56 needs trust as I talked about in last week episode, as well as an am i able account. But if you do have that special Leeds child that otherwise qualifies for an am i able account, I encourage you, strongly encourage if you haven't already, visit the am i able website and get that account set up today for your special needs child. Of course, if you have any questions about what might be available to you as part of your state plan in general for your special Leeds child, or obviously if you just have the need to have an estate plan put together, amand and I would be honored to have the opportunity to help you protect your loved ones putting together your state plan, a mending a current plan, or assisting you in settling a loved ones of space. Simply head on over to our website DOILOWPC dot com.

16:18 There you will find information on how you can go about scheduling virtual consultations via Zoomer telephone or in person consultations at either the East Lansing location or the new Grand Rapids office that has just opened. A reminder too, if all you're looking for is an individual document, let's say all what your need is a new certificate to trust, I invite you go to Doylaw PC. Check out the Legal Store. There's a tabs as Legal store there. You're going to see the have the ability to order individual legal documents. Through the Legal Store.

17:00 Documents can be pre prepared email to you for you to print out at home and to have them executed again. All of the information is available at Doyle LAWPC dot com. Well, that's going to be it for today's show. It's kind of a short program, but I want to make sure in follow up to last week's episode about special needs trust, I spent a little bit of time today giving you some information about the amiable account since that goes along with the special needs planning that you might be involved in relative to your special needs child. As always, though, if you have a comment about the program, or a topic that you'd like to have me discuss, or perhaps questions that you would like to have me answered, please head on.

18:03 You can send me an email Tom at Tuesday Withtim dot com, or head on over to the Tuesday with Tom website. There again, you're going to see a microphone on the homepage. Click on the microphone. You can leave me a voice message about the topic that you'd like to have me discuss, or perhaps questions that you'd like to have answered, or if you simply have a comment about the program, And there's the ability at the new website to indicate to others what you think about the program as well. Also follow us on Facebook and follow the office on Facebook and invite your friends and families to do so. That would be Tuesday with Tom and the office of course is Doyle Law PC. Remember two Tuesday with Tom is available. Probably wherever it is that you listen to podcasts, Apple Podcasts, Spotify, Google podcast, iHeartRadio, Spreaker, wherever it is that you're listening to podcasts, you will likely have the ability to listen to Tuesday with Tom, and you can always ask your smart speaker to record or to play, not record, to play Tuesday with Tom. Well, thank you again for spending some of your time with us today and as always, I hope that you have an awesome day and an awesome week in Michigan. Stay safe. Tuesday with Tom has been

19:33 brought to you by the estate planning attorneys at Doyle Law PC. To learn how we can help you with your estate plan or with settling a loved one's estate, please call us today at five one seven three two three seven three sixty six. That's five one seven three two three seven three sixty six.