When a loved one has a serious disability families are met with challenges as they plan for their future. Depending on the severity of the disability the person may be significantly limited in their ability to earn income.  These individuals often qualify for government programs which require that they have a lower income. While they need these programs, they are left without any significant savings or other means to provide for their needs. Fortunately, in some cases, Michigan families have the option can set up tax-exempt savings accounts which can be used to assist their loved ones today and in the future.

A Michigan Achieving a Better Life Experience (MiABLE) account is a tax-free savings account which allows individuals with significant disabilities to save for the future as well as use funds for many daily living expenses.  These “qualified daily living expenses” are essentially the costs of living with a disability.  These expenses include education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and some other expense approved by the IRS.  The individual does not have to delay in using their ABLE account for these daily needs.

In order to qualify to set up this account the account holder must be an individual with significant disabilities who became disabled on or before their 26th birthday and is eligible to receive Supplemental Security Income (SSI); is eligible to receive Social Security Disability Insurance (SSDI), or has been diagnosed by a qualified physician with a physical or mental disability resulting in marked and severe functional limitations that is expected to last no less than 12 months.

An ABLE account allows the account holder to save money while still qualifying for other benefit programs.  An account holder can save up to $100,000.00 without impacting their SSI and Medicaid as well as other assistance programs. Also, the account holder can add $14,000.00 per year to the account without their other benefits being affected.  Their income from the account will not be taxed.

Planning for the long-term expenses of your loved one who has a disability is necessary to ensure they have the resources for their future care.  The ABLE account provides a vehicle for saving for and paying for these expenses without depriving them of much-needed programs and services.  While the ABLE account is one way in which to plan for your loved one, there are additional measures which can be taken to provide for their care.

Our office can provide advice to help you navigate the decisions related to planning for your loved one’s future needs.   Our office can provide advice to help you navigate the decisions related to planning for your loved one’s future needs.  Please contact us online or by phone if we may be of assistance.

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