Wednesday, December 23, 2020

Opening Doors: Inheritance and Disability

This year has been incredibly difficult, even under the best of circumstances.  The sheer amount of loss experienced feels weighty.  I personally have lost two family members in the past year.  On the day I write this, we would have been celebrating my late uncle's birthday.  I can't help but feel as though he crossed over too soon, and that on this day, there should be cake.  But alas there won't be cake. There will be a social media reminder of the candles we won't be blowing out.

I suppose there should be no surprise that this somewhat heavy topic is on my mind.  Just ten days ago marked one year since the passing of my grandmother.  She led a very full life, and her passing seemed as though it was a peaceful experience for her.  I am thankful for that.  Nonetheless, I miss the experience of her physical presence. 

I expected to feel an extra sense of my connection to these two family members this month given the notable days December provides.  While there is a sense of longing, there is also a great deal of gratitude.  Both of these people I love have left a legacy that remains with my family in forms both tangible and not.

There is an aspect to the Law of Attraction that can seem both simple and complex all rolled into one.  It's the concept of openness.  We have to open our hearts and our lives to make space for the arrival of the blessings coming to us.  I've discussed this concept where time is concerned, referring to the idea of eliminating obligations so as to create an opening for opportunities to flow into our experience.  But this week, I'm thinking about this differently.  As a result of the passing of the above-mentioned family members, another member of my family will be in line for an inheritance.  The truth is that this isn't the kind of blessing that I spend much time thinking about because it is accompanied by the passing of someone I love.  Who really wants to think about that?  But, we must think about it at least a little.  You see, the family member that I referred to as being set to inherit some money is a person with a disability.  This person receives (Supplemental Security Income) SSI and Medicaid.

SSI and Medicaid are benefits that come with intense restriction in terms of the amount of assets a person can have.  These limits are very low: $2000 for individuals and $3000 for couples.  It seems as though these asset limits haven't been updated in 40 years.  This restriction is a huge barrier that stands between people with disabilities and financial security.  If someone on SSI has assets over the limit, their monthly SSI check can be reduced as a result.  This creates a cycle of poverty and the inability to save money.  This also makes inheriting money (or any other asset) an issue.

How does this relate to openness?  Just as I want to open my experience to allow abundance to flow in, I want to create this openness for others in my life.  Right now, this asset limitation set for individuals with disabilities feels like a closed door.  But what if I told you there was a way to open that door? Would that inspire you to take action on behalf of someone you love that could really use an open door?

In 2014, the Achieving a Better Life Experience (ABLE) Act was passed.  Now, eligible people with disabilities are allowed to open 529 ABLE accounts.  These accounts, also known simply as "ABLE accounts," allow people with disabilities to actually have money.  Money in ABLE accounts are not subject to the SSI/Medicaid asset limits, nor is the growth taxable federally.  Much like with other 529s typically used for college savings, or retirement savings accounts, there are IRS imposed limitations on ABLE accounts. If an ABLE account grows beyond $100,000, the individual will lose their SSI, but not Medicaid.  There is also an annual contribution limit (in 2018 it was $15,000/yr).  Funds from ABLE accounts can be withdrawn for eligible expenses such as job training, housing, transportation, etc.  While this isn't a perfect solution, it's considerably better than the $2000 limit previously discussed.

Another option is a Special Needs Trust.  Sometimes these are also known as "Supplemental Needs Trusts."  In general, these accounts allow a person with a disability to hold assets inside of the trust and still qualify for their government benefits.  A person with a disability might coordinate the use of both an ABLE account and a Special Needs trust, or use just one of these tools.

I really wanted to create awareness of these two financial tools because they can create that openness I discussed before.  In my family's situation, there has been an ABLE account established.  This ABLE account creates an opening in their life so that any financial abundance flowing to them can be received.  I'm so grateful for that. 

 Obviously, if someone you know might benefit from one of these account types, you should have them consult with someone in their state with legal and/or financial expertise on these specialty accounts so that any rules and restrictions are clear.  But I hope this mini-overview of ABLE accounts and Special Needs Trusts has provided you with a little knowledge and inspiration.  If someone you know and love could benefit from these options, you could help open a door for them that might otherwise be closed.

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