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2019-01-26 DSG Keys to Success - ABLE Accounts Seminar - Syverson & Treacy

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Published by mobileupsoftware, 2019-01-15 11:38:53

DSG Keys to Success - ABLE Accounts Seminar - Syverson & Treacy

2019-01-26 DSG Keys to Success - ABLE Accounts Seminar - Syverson & Treacy

ABLE Accounts:
What you need to know!

Matt Syverson, CFP®, CAP®

Tom Treacy, Director
Kansas ABLE Savings Plan

The Stephen Beck, Jr. Achieving a Better Life
Experience Act of 201 4

Stephen, Catherine, Mariae and Natalie Beck

Passage of the Federal ABLE Act

President Obama signed the ABLE ACT on December 19th

The ABLE Act passed the US House of Representatives on
December 3rd of 2014

Brief History of the Kansas ABLE ACT

• Jawanda and her daughter Rachel
teamed up with Kansas State
Representative Erin Davis to push for
passage of ABLE legislation in Topeka.

• Jawanda & Rep. Davis reached out to
State Treasurer Ron Estes for his
assistance in drafting of the State
version of the ABLE act.

• Rep. Davis & our office introduced the
Kansas Able Act (HB 2216) on January
22nd 2015. It moved quickly, passing
the Kansas Senate on March 25th then
passing the Kansas House on April 1st.

On April 15th 2015 Governor Sam
Brownback signed the Kansas ABLE

act into law.

Family Resources Child with Final Destination
Disabilities Charity
Life Insurance Special Needs Heirs
Home/Real Estate Trust
Brokerage Account State of
Retirement Plan Employment Residence
Education Plan Able Account


Family Resources Child with What CAN you
Disabilities pay for:
Life Insurance Special Needs - One Home
Home/Real Estate Trust - One vehicle
Brokerage Account - Home Furnishings
Retirement Plan Employment - Property used for work
Cash - Assets used toward
Able Account
Education Plan <$100k Occupational goal
Cash - Burial and Life Insurance
What CAN’T you
pay for:

- Food
- Shelter

Family Resources Child with What CAN you
Disabilities pay for?
Life Insurance Special Needs - Education
Home/Real Estate Trust - Housing
Brokerage Account - Transportation
Retirement Plan Employment - Employment training
Cash - Assistive technology &

Education Plan $15k support Services
Cash - Health
Able Account - Prevention & wellness
<$100k - Financial management
- Legal Fees
SSI/Medicaid - Oversight & 24-hour care
- Funeral & burial expenses
- Basic living expenses

Family Resources Child with Charity
Disabilities Heirs
Vehicles State of
Life Insurance Special Needs Residence?
Home/Real Estate Trust
Brokerage Account
Retirement Plan Employment
Able Account
Education Plan <$100k

Family Resources Child with Charity
Disabilities Heirs
Vehicles State of
Life Insurance Special Needs Residence?
Home/Real Estate Trust
Brokerage Account
Retirement Plan Employment

Education Plan $15k
Able Account


Family Resources Child with Charity
Disabilities Heirs
Vehicles State of
Life Insurance Special Needs Residence?
Home/Real Estate Trust
Brokerage Account
Retirement Plan Employment

Education Plan $15k
Able Account


What is an ABLE account?

• An ABLE account is a tax-advantaged savings account (529A) that qualified individuals
with disabilities can open.

• Contributions to ABLE accounts are made on an after-tax basis.
• Earnings from ABLE funds grow tax-deferred and are tax-free if used for qualified

disability expenses.
• Contributions to an ABLE account may be made by anybody.
• The beneficiary is the owner of the account, but legal guardianship and powers of

attorney will permit others to control ABLE funds in the event that the beneficiary is
unwilling or unable to manage the account.

Who is eligible to open an ABLE account?

• An individual must meet two requirements to be eligible for an ABLE
account: an age requirement and a severity of disability determination.

• The onset of symptoms of the person’s disability must have occurred before
age 26. Additionally, the disabled individual must have “marked and severe
functional limitations” (essentially, the Social Security definition of

• An individual whose disability occurred prior to age 26 and is already
receiving SSI and/or SSDI is automatically eligible to establish an ABLE

• Those who are not recipients of SSI and/or SSDI but still meet the age of
onset disability requirement will be eligible to open an ABLE account upon
obtaining a disability certification from their physician and filing their
certification with the US Secretary of the Treasury.

How do assets in ABLE accounts affect
eligibility for SSI and Medicaid?

• SSI benefits are not affected by the first $100,000 of funds in an ABLE
account. Basically an ABLE account is a shield of up to $100,000 of funds
from the SSI $2,000 individual resource limit.

• When an ABLE account exceeds $100,000, then beneficiary/owner will
be suspended (NOT terminated) from eligibility for SSI benefits and they
will no longer receive that monthly income. SSI benefits will be
reactivated after the beneficiary spends down the account to under

• Medicaid eligibility will remain intact, even if the ABLE account exceeds

Are there limits to how much money can
be put in an ABLE account?

• Yes. The total annual contribution maximum to an ABLE account is

• Contributions into the account will no longer be allowed when the
balance reaches $402,000.

 Note: The account may grow beyond $402,000.

So how can the money in an ABLE account be spent?
What are “Qualified Expenses”?

It’s currently broadly defined as…

 Education  Financial management and
 Housing administrative services
 Transportation  Legal fees
 Employment training and support  Expenses for oversight and
 Assistive technology and personal 24-hour care
_support services  Funeral and burial expenses
 Health  Basic living expenses
 Prevention & Wellness
Source: Social Security Administration

Will ABLE account owners need approval before
spending the money in their accounts?

• No. No one has verify or approve expenses from an ABLE

• Account owners will however be required to maintain
documentation to prove that their expenses are qualified if
they are audited.

What are the Penalties for
“Nonqualified withdrawals”?

• Account owners will have to pay taxes on earnings plus a pay
a 10% federal tax penalty for distributions not used for
qualified expenses.

What happens to funds in an ABLE account
when the beneficiary dies?

• The federal law allows state Medicaid agencies to seek reimbursement for
the Medicaid services a beneficiary has received since they opened the
ABLE account.

• It is up to each state’s Medicaid program to decide whether or not to seek
reimbursement from ABLE accounts.

• Even if they do pursue claims, all outstanding qualified disability expenses
will be given priority over the Medicaid claims. The remainder of assets in
an ABLE account will go to the beneficiary’s estate.

Good News here in Kansas!

• On May 17th, 2018 then Governor
Jeff Colyer signed into law HB 2067.
This legislation makes tremendous
enhancements to the Kansas ABLE
savings program!

• HB 2067 allows individuals
contributing to an ABLE account to
receive a Kansas tax deduction.
($3,000 per individual/$6,000 per

• HB 2067 makes KS the 2nd State in
the nation to add safeguards
against the Medicaid clawback.

Kansas ABLE Investment

Note: The minimum contribution amount into
a Kansas ABLE account is $25.

ABLE Account Fees • If you elect
electronic delivery
notification for
statements and
confirmations, your
Quarterly Account
Maintenance Fee
will be discounted
by $3.75.

• In addition, if the
Account Owner or
Individual is a
resident of Kansas,
you are eligible for
an additional
quarterly discount
of $1.25.

ABLE Checking Account & Debit Card

Key Benefits :

• Debit card access and unlimited check writing
• No overdraft or non-sufficient funds fees
• FDIC insurance up to maximum amount permitted by law
• Interest on balances
• Tax advantages – pay no taxes on interest earned or on withdrawals used for qualified

expenses such as health care, housing, transportation or education
• Fifth Third Instant Alerts – get immediate information on account and online security

and instant notices for card and spending activity.
• Paper or online statement options

• No Monthly Service Charge If You:

• Have an average monthly balance of $250 or more during your statement cycle
• OR sign up for paperless statements
• Otherwise, it's $2.00 per month.

ABLE 2.0

• The ABLE to Work Act (S. 818/H.R. 1896) incentivizes employment by allowing ABLE beneficiaries who
work and earn income, but do not participate in an employer’s retirement plan, to save additional
amounts in their 529A (ABLE) accounts up to the federal poverty level (currently $12,140) in addition to
the $15,000 annual maximum contribution. Beneficiaries are also eligible for the Saver’s Credit, an
existing federal tax credit that low and middle-income individuals can currently claim when they make
contributions to a retirement account.

• The ABLE Financial Planning Act (S. 816/H.R. 1897) protects against life-changing events by allowing
ABLE beneficiaries to roll over regular 529 accounts to 529A (ABLE) accounts up to the annual maximum
contribution. This bill is particularly helpful for families who set up 529 accounts before receiving a
child’s diagnosis, or for teenagers who incur life-changing events that render them unable to go to
college and use their 529 funds for their original purpose.

Administered by the Kansas State Treasurer’s Office

Tom Treacy – Director, ABLE Savings Program
[email protected] 785.296.3171
Matt Syverson - Senior Wealth Advisor, Sound Stewardship
[email protected] 913.317.6000

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