If you have a family member with a significant disability, you may be wondering how to care for her or him.
Special needs trusts are an option but they often require substantial amounts of money — as much as $100,000 up front — and the services of a lawyer. A less expensive way of establishing a trust for a family member with special needs is the pooled trust, available to people with modest assets.
Whether or not you have one of these special needs trusts, the ABLE account is another way to set money aside. Not only is it less expensive, it’s much easier. ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families.
“Small amounts of savings over time make the savings more accessible for more people,” said Todd Sensing, a certified financial planner and founder of FamilyVest in Destin, Florida.
An ABLE account lets a designated beneficiary have up to $100,000 in assets without touching his or her ability to access SSI disability benefits. The funds in these accounts can be used for education, transportation, legal fees and quality-of-life purchases.