This Applies to Families Who May be Social Security Representative Payees for a Disabled Family Member:
New regulations effective February 25, 2020 will allow you to designate a successor representative payee for your social security benefits, in advance of your own death or disability. This important change means that a family can make sure there is no interruption of benefits such as SSA and SSI for themselves or a disabled family member. This is particularly critical when the impairment is a developmental or intellectual disability and a 17A guardian has been appointed. SSA had refused to permit a successor rep payee until the successor guardian is appointed – a process that can take several months in many New York State counties. The new forms have not yet been finalized. Contact your local SSA office in March to secure the proper application to pre-appoint a Representative Payee who will be able to collect and manage social security benefits when you are unable to do so.
New Rules for ABLE Accounts - for Special Needs Adults:
Achieving a Better Life Experience (ABLE) Accounts are for persons with disabilities to help in saving money without risking their government benefits or entitlements. A person who holds an ABLE account up to $100,000 would still be eligible for Supplemental Security Income (SSI), and Medicaid or other important federal benefits.
The new rules listed below expand options for disabled individuals who use ABLE accounts. The funding limits for ABLE accounts are aligned with the Federal gift tax exclusion, which currently allows $15,000 annual gifts or transfers to an ABLE account (2019). Employed persons with disabilities can deposit their income and wages into an ABLE account up to $12,140 per year as long as they do not also have an employer-contributed retirement plan available such as a 401K or a tax deferred savings plan or any other qualified retirement plan.
ABLE accounts now have the flexibility to hold funds that were previously kept in a tuition program or 529 account. This is an important allowance for those who are saving for their children’s college in a 529 account, but may have needed to use the funds for other services for a disabled child. The tuition fund can now be moved into an ABLE account in the amount of $15,000 each year.
The final valuable update to persons with ABLE accounts is the Saver Credit. For people with low to moderate income, the deposits made to the ABLE accounts can qualify for a tax credit of up to $2,000.
Our law firm can assist in setting up Supplemental Needs Trusts, ABLE Accounts and any other estate planning services you may need for your special needs family member. Please call our office at: 718-238-6960.