In my blog post of January 21, 2015, and in one of our firm’s previous newsletters, we reported that in late 2014 the ABLE (” Achieving a Better Life Experience”) Act was signed into law by Congress. You can refer to my previous post for more detail, but you will remember that the law is aimed at achieving a manner in which those with special needs can save money without losing needs based public benefits such as SSI or Medicaid. The federal law allows states to implement the Act to provide for a savings program for persons with disabilities that is modeled after the 529 college savings account program.
I am happy to report that Montana has now become the 10th state to implement and ABLE law with Governor Bullock’s signing of Senate Bill 399 on May 7, 2015. Under the Montana ABLE Act, the disabled individual, or someone on his or her behalf, may set up a savings account to cover expenses associated with the person’s disabilities that will not jeopardize the disabled person’s public benefits. Anyone can make a tax-deductible contribution of up to $3,000 each year to the account, whether or not a family member of the disabled individual, although the total annual amount that can be contributed by all persons into the account is limited to $14,000 per year. The account can accumulate over time a maximum of $100,000 in contributions.
While the ABLE account does not replace other special needs planning tools, such as special needs trusts, it does add an important option for individuals with disabilities.