Using ABLE Accounts in Creative Ways

1. Using ABLE Accounts in Creative Ways Robert W. Fechtman Doug Jackson Stephen Dale

2. ROBERT W. FECHTMAN FECHTMAN LAW OFFICE 8555 RIVER ROAD, SUITE 420 INDIANAPOLIS, IN 46240 (317) 663-7200

3. Get the Social Security Administration Off My Back! • Contributions made to an ABLE account and then used for food and shelter expenses don’t count as In-kind Support and Maintenance.

4. Get the Trust Beneficiary Off My Back! • With a reasonable budget, it is possible to dole the trust money out to the beneficiary through an ABLE account. What the trust beneficiary does with the ABLE money is between them, the IRS, the SSA and God!

5. Provide Hot Snacks and Gambling Loot for the Incarcerated SSI Recipient! • In Indiana, some of the snack box options are called: • The All Nighter, • The Biggie, and • The Wake Me Up!

6. Doug Jackson, Deputy Director, Ohio Treasurer's Office douglas.jackson@tos.ohio.gov (614) 746-7460

7. eGifting • History of no “cash gifts” • Birthdays, Holidays, Fundraising • Directly into the STABLE Account = No transfer of funds is necessary = Not counted as a resource in a personal account • Tax advantage for contribution • Michael’s Story

9. Employer & Employee Benefits Employer Contributions • For benefits that are not earned • Similar to a 401K Employee Contributions • Post-tax contribution • Save first approach

10. The ABLE Act for Californians: What You Need to Know Stephen W. Dale, Esq. LL.M Pacheco, California 925-826-5585 Please visit our YouTube channel at www.youtube.com/c/achievingindependence For more information on the ABLE Act, go to www.achievingindependence.com/able

11. Who is in Charge of the ABLE Account?

12. Who Owns the ABLE Account? The ABLE Act itself and the proposed treasury regulations makes it clear that the designated beneficiary is the owner of the account and in charge of managing it as well so long as the beneficiary has capacity.

13. What if Account Holder Lacks Capacity? The Treasury Department and the IRS recognize, however, that certain eligible individuals may be unable to establish an account themselves.

14. What if Account Holder Lacks Capacity? Therefore, the proposed regulations clarify that, if the eligible individual cannot establish the account, the eligible individual’s agent under a power of attorney or, if none, his or her parent or legal guardian (or conservator) may establish the ABLE account for that eligible individual.

15. What if Account Holder Lacks Capacity? Therefore, the only persons that can establish an ABLE Account is • the eligible individual, • the eligible individual’s agent under a valid power of attorney or if none, • his or her parent or. • legal guardian or conservator.

16. What if Account Holder Lacks Capacity? For purposes of these proposed regulations, because each of these individuals would be acting on behalf of the designated beneficiary, references to actions of the designated beneficiary, such as opening or managing the ABLE account, are deemed to include the actions of any other such individual with signature authority over the ABLE account.

17. What if Account Holder Lacks Capacity? The proposed regulations also provide that, consistent with Notice 2015-18, a person other than the designated beneficiary with signature authority over the account of the designated beneficiary may neither have, nor acquire, any beneficial interest in the account during the designated beneficiary’s lifetime and must administer the account for the benefit of the designated beneficiary.

18. What if Account Holder Lacks Capacity? If the designated beneficiary is not able to exercise signature authority over his or her ABLE account or chooses to establish an ABLE account but not exercise signature authority, references to the designated beneficiary with respect to his or her actions include actions by the designated beneficiary’s agent under a power of attorney or, if none, a parent or legal guardian of the designated beneficiary.

19. What if Account Holder Lacks Capacity? Therefore, the only persons that can have signature under an ABLE Account is • the eligible individual, • the eligible individual’s agent under a valid power of attorney or if none, • his or her parent or. • legal guardian or conservator.

20. Practice Tip • If the eligible individual under an ABLE Account has capacity – it is best to have the individual sign a power of attorney immediately. • Also – if the eligible individual wants for instance a to have a sibling have signature authority – then the power of attorney is the method to make this happen.

21. Practice Tip • If there is any question about whether the designated beneficiary has capacity to exercise a power of attorney, it might be wise to accompany it with a doctors letter that the beneficiary had capacity when the ABLE beneficiary executed the power of attorney

22. Things to Consider • If your designated beneficiary lacks capacity to manage the account and the parents have signature authority, they may want to consider establishing a conservatorship or guardianship and include a successor to be able to continue managing the account.

23. Example – Pebbles Story • Fred and Wilma have a daughter named Pebbles who was born with a severe disability with cognitive impairments. • Fred and Wilma establish an ABLE Account under their authority as Pebbles parents. • Pebble’s lacks capacity to establish or manage account. • She also lacks the capacity to establish a valid power of attorney. • Fred and Wilma maintain signature authority over the account as parents.

24. Example – Pebbles Story • Fred and Wilma passed away in a tragic accident, and their neighbor Barney promised to look after Pebbles if anything ever happened to them. • In order for Barney or anyone else to have signature authority over the account he would need to become Pebbles guardian or conservator or conceivably adopt her.

25. Example – Pebbles Story • If this were in California – you could get an emergency temporary conservatorship if there are circumstances that are truly an emergency – but it would take 2-3 weeks minimum if everything were in order. • The permanent conservatorship would take a minimum of 4 months. • Fortunately for the attorneys an ABLE Account can be used for legal fees. • Unfortunately – this is going to take funds that would be better spent on Pebbles needs.

26. In Conclusion • In determining whether an ABLE Account is right for you or your loved one; • If the ABLE Beneficiary has capacity to manage his or her account, have the beneficiary establish a power of attorney in the event that the beneficiary loses capacity in the future, • If the designated beneficiary lacks capacity to manage the account and you have signature authority, think about how to have some way to have a successor take over in the event of your incapacity or death.

27. Questions& Answers Robert Fechtman Doug Jackson Stephen Dale