In 2016, the Wisconsin legislature adopted federal legislation allowing Wisconsin residents to participate in ABLE programs administered by other states (Wisconsin does not administer its own ABLE program). An ABLE account is a tax-advantaged savings account for the benefit of a blind or disabled individual. Importantly, the owner of an ABLE account does not lose his or her eligibility for means-tested government benefits such as Medicaid and Social Security, even if the balance of his or her ABLE account exceeds the asset limitation in place for the government program.
Any Wisconsin resident who became blind or disabled before the age of 26 can open his or her own ABLE account. On a yearly basis, the owner of an ABLE account, or anyone on his or her behalf, can contribute up to the federal gift tax exclusion amount ($15,000 in 2019) to the account. In addition, parents or grandparents who had previously funded a Section 529 College Savings Account for the beneficiary’s benefit can roll the balance over to an existing ABLE account, provided that the contribution does not exceed the yearly limitation. The account owner can use the saved funds to pay for any “qualified disability expense,” which generally includes any expense that improves the owner’s health, independence, or qualify of life.
ABLE accounts are therefore a great way for disabled individuals to save and, as the name suggests, “achieve a better life experience.”
If you have any questions on this topic, please contact Attorney Emily E. Ames at firstname.lastname@example.org or (920) 393-1190.
Disclaimer: The information in this blog post is provided for general informational purposes only, and is not intended as legal advice from Lin Law LLC or the individual author. Please consult an attorney licensed to practice law in your jurisdiction for information regarding your individual situation.