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

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Well, good afternoon, Michigan Anders. It is Tuesday, May twenty eight,

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twenty twenty four, and this,
of course is Tuesday with Tom,

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Michigan's only weekly Internet show where we
do answer your questions about a state planning

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and a state settlement in Michigan,
and we don't send you a bill.

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I'm your host, Tom Doyle,
a state planning attorney, lifelong Michigan resident,

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an ambassador for all things good in
this great state of mel Michigan.

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Welcome to today's program, and welcome
back from your long Memorial Day weekend.

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Well, last week's episode, do
you need a special needs trust for your

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disabled child? If you have a
disabled child and they are on government benefits,

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some needs based government benefits, and
you're considering your estate plan and whether

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or not a special needs trust might
be appropriate for you as part of your

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estate plan, I certainly encourage you
to listen to last week's episode where I

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talk about the different types of special
needs trusts that could be created for the

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benefit of your child. And in
keeping with that same theme, today's today's

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show is why your special needs child
should have an mii able account. But

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please remember what I'm about to discuss
during The program, as always is for

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educational purposes only. It is not
intended to be legal advice. You need

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to work with your attorney to determine
what is appropriate for you and your estate

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plan. Why your special needs child
should have what's called an am i ABLE

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account m i ABL account. Am
i ABLE stands for Michigan Achieving a Better

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Life Experience. It's a program created
by the state of Michigan in response to

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the Federal Able Act of twenty twenty
four, and essentially, what that federal

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law did was allowed states to create
certain tax advantage savings accounts for individuals with

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disabilities. Those these accounts enable an
eligible individual to save and invest money without

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jeopardizing their ability for crucial government benefits
such as Medicaid and supplemental Security income.

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So the idea being, if you
have a special needs child who's on some

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sort of needs based government program,
you know that there are limitations on how

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much they can own in order to
avoid them losing their government benefits. Well,

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the purpose of the ABLE APT and
in Michigan them i ABLE program,

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is to allow these special accounts to
be created that will then enable your special

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needs child to save and have money
invested without jeopardizing their eligibility for government benefits

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such as Medicaid and SSI. So
some key features of the amiable accounts one

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are the tax advantages. First,
tax free earnings. Just like an educational

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five twenty nine program or even just
like a wroth IRA program, the earnings

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that the account has inside it grow
tax free. So as contributions are made

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into the amiable account and they increase
in value, they will grow tax free,

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similar to that five to twenty nine
educational account or roth IRA. And

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just like that five to twenty nine
educational account, withdrawals that are used for

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what are called qualified disability expenses are
tax free withdraws, So some significant tax

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savings that grows tax free, and
as long as the proceeds that are in

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the account are used for qualified disability
expenses, those withdraws will also be tax

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free. State taxes. In the
state of Michigan, there is a State

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of Michigan tax deduction available to a
contribution to an amiable account able to deduct

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that I your Michigan income tax returns. State income taxpayers can claim up to

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five thousand dollars deduction for single filers
and ten thousand dollars for joint filers for

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am able contributions, so the parent, if they are going to be making

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contributions in that account, can take
advantage of these Michigan income tax deductions as

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well. The funds that are in
the am i able account, though,

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aren't going to count as assets when
determining eligibility for programs like Medicaid and SSI.

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That's the whole point of creating them, is to have funds in an

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account that will protect the child's eligibility
for programs like Medicaid and SSIS so long

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as so long as is a s
important consideration, there cannot be more than

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one hundred thousand dollars total in the
child's am i able account. So as

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long as you stay under that one
hundred thousand dollars total in that account,

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those assets that are in that account
are not going to disqualify them from federal

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programs like Medicaid and SSI. There's
also fairly broad flexibility in what those funds

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are going to be able to use
for. When you look at what qualified

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disability expenses are, it's going to
include things like education, health and wellness,

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housing, transportation, legal fees,
financial management, employment, training,

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and support, assistive technology, personal
support services, oversight in monitoring services,

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and funeral and burial expenses. So
are the broad range of expenses that are

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going to qualify for using those proceeds. And as I said, when the

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funds are withdrawn from the account for
those qualified disability proceeds, it won't be

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taxable when they're taking out, So
a broad range of qualified disability expenses available

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for your child. Now there are
going to be, as in everything,

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contribution limits. So I already talked
about, one hundred thousand dollars is the

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total that you can have in that
am i able account. And side note

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a child can only have one am
i able account, so one hundred thousand

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dollars total in that account. There's
also, though, going to be annual

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contribution limits, and in twenty twenty
four, that annual contribution limit is eighteen

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thousand dollars per individual contributions into that
am i able account. In twenty twenty

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four, that amount does get adjusted
annually based upon an inflation factor. In

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addition to that, though, if
your child is working and they have that

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disability, they they that disabled child
can contribute an extra amount, which would

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be up to twelve thousand and sixty
dollars in twenty twenty four that would be

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coming out of their annual earnings that
they could that they can contribute on their

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own. In addition, though since
the Miable account is considered a five to

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twenty nine account by the IRS,
well, you have to remember the maximum

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contribution limit for all Michigan five twenty
nine plans for a particular beneficiary is five

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hundred thousand dollars. So if you
have the Miable account, which has a

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total limitation of one hundred thousand,
if you had that one hundred thousand dollars

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in the Amiable account, there would
be a limitation now of only an additional

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four hundred thousand dollars that could actually
be in a five to twenty nine account.

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Accounts are pretty easy to manage.
They're designed to be user friendly,

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not complicated. In fact, you
normally qualified to have a debit card and

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you'll be able to use that debit
card to your child will be able to

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use that debit card to make qualifying
withdrawals from the account, so they're fairly

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easy to manage. Additionally, perhaps
there are friends and other family members who

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would like to make contributions under the
Michigan program, there's what's called a you

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gift that's a feature of the able
account that allows friends and family to contribute

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to the account. So in order
to do that, you'll find more information

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at the website. But once you
log into your website, there's basically a

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code that you will have that your
child would have that they could share with

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other friends and family members that they
can then use to make online contributions into

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that child's am i able account.
So what are the qualification requirements in order

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to open an am i able account. Basically, your child or the individual's

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going to have to have a qualifying
disability that was present before the age of

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twenty six, and they have to
be entitled to benefits based upon blindness or

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disability under the Social Security Act,
or have a similar severe disability that is

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documented by a physician. So those
are the requirements again, eligibility requirements,

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a qualifying disability that was present before
the age of twenty six and second to

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be entitled to benefits based upon blindness
or disability under the Social Security Act or

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have a similar severe disability documentation documented
by a physician. Well, if you

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put all that together, i able
accounts can be game changers for your disabled

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child. Why because historically individuals with
disabilities, again, they face strict asset

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limits in order to maintain eligibility for
those critical public funds. Now, with

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then am i able account, they
have the ability to have a safe and

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effective way to build up additional financial
security for him or herself. Think about

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it. Let's say you have a
child with cerebral palsy. Before am i

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able accounts, you would perhaps be
concerned about saving up money in your child's

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name, obviously, because if there
was too much in your child's name,

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that child would now not qualify for
Medicaid. Now, your child, though,

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can have an amiable account where her
family contributes regularly to it. The

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account can be used to cover specialized
therapies, perhaps save for a modified vehicle,

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all different abilities that that account be
used for to essentially enhance your child's

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independence and quality of life. So
how do you get started? Well,

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obviously there's a website for everything now, and that website is www dot miia

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b l E dot org. That's
miiable dot org. Pretty straightforward. You're

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going to find information on how to
set up the account, how to access

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funds from the account, what the
funds can be used for what investment options

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there are going to be. If
you if you kind of look at Michigan's

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five twenty nine educational programs, where
you know there's different investment options available within

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the five to twenty nine plan.
Similarly, there are going to be different

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investment options available inside this Amiable account. So if you have a special needs

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child. Now also one other point, the Amiable account isn't really designed to

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replace a special needs trust. It
might be appropriate to have both a special

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needs trust as I talked about in
last week episode, as well as an

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am i able account. But if
you do have that special Leeds child that

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otherwise qualifies for an am i able
account, I encourage you, strongly encourage

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if you haven't already, visit the
am i able website and get that account

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set up today for your special needs
child. Of course, if you have

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any questions about what might be available
to you as part of your state plan

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in general for your special Leeds child, or obviously if you just have the

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need to have an estate plan put
together, amand and I would be honored

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to have the opportunity to help you
protect your loved ones putting together your state

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plan, a mending a current plan, or assisting you in settling a loved

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ones of space. Simply head on
over to our website DOILOWPC dot com.

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There you will find information on how
you can go about scheduling virtual consultations via

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Zoomer telephone or in person consultations at
either the East Lansing location or the new

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Grand Rapids office that has just opened. A reminder too, if all you're

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looking for is an individual document,
let's say all what your need is a

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new certificate to trust, I invite
you go to Doylaw PC. Check out

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the Legal Store. There's a tabs
as Legal store there. You're going to

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see the have the ability to order
individual legal documents. Through the Legal Store.

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Documents can be pre prepared email to
you for you to print out at

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home and to have them executed again. All of the information is available at

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Doyle LAWPC dot com. Well,
that's going to be it for today's show.

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It's kind of a short program,
but I want to make sure in

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follow up to last week's episode about
special needs trust, I spent a little

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bit of time today giving you some
information about the amiable account since that goes

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along with the special needs planning that
you might be involved in relative to your

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special needs child. As always,
though, if you have a comment about

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the program, or a topic that
you'd like to have me discuss, or

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perhaps questions that you would like to
have me answered, please head on.

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You can send me an email Tom
at Tuesday Withtim dot com, or head

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on over to the Tuesday with Tom
website. There again, you're going to

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see a microphone on the homepage.
Click on the microphone. You can leave

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me a voice message about the topic
that you'd like to have me discuss,

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or perhaps questions that you'd like to
have answered, or if you simply have

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a comment about the program, And
there's the ability at the new website to

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indicate to others what you think about
the program as well. Also follow us

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on Facebook and follow the office on
Facebook and invite your friends and families to

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do so. That would be Tuesday
with Tom and the office of course is

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Doyle Law PC. Remember two Tuesday
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Tuesday with Tom. Well, thank
you again for spending some of your time

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with us today and as always,
I hope that you have an awesome day

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and an awesome week in Michigan.
Stay safe. Tuesday with Tom has been

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brought to you by the estate planning
attorneys at Doyle Law PC. To learn

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how we can help you with your
estate plan or with settling a loved one's

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estate, please call us today at
five one seven three two three seven three

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sixty six. That's five one seven
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