A SNT Can Now Fund an ABLE Account

HNWSpecial Needs Trusts for Minor Children and Adults

An ABLE account with a balance of $100,000 or less does not affect a disabled person’s eligibility for SSI.  In NJ, Medicaid eligibility remains in place even with an account balance up to $305,000. Funds withdrawn from an ABLE account and used within the same calendar month have no effect on SSI benefits eligibility. ABLE accounts provide a valuable tool for eligible persons to hold — and exercise control over — resources while remaining eligible for vital means-tested public benefits.

New SSA rules authorize transfers from a Special Needs Trust or other trust to an ABLE account. A transfer to an ABLE account from a trust is not counted as a resource to the trust beneficiary and “generally will be considered” a third-party contribution; that is, a contribution by a person other than the ABLE accountholder.

Funds transferred from an SNT to an ABLE account are not counted as income to the accountholder/SNT beneficiary.  An ABLE account provides an effective planning tool for an SNT trustee who does not want to trigger a benefit reduction by paying the beneficiary’s food and shelter costs directly from an SNT. If, instead, the SNT trustee distributes the monthly food and shelter costs to the ABLE account and the beneficiary pays for rent, food, and utilities from the ABLE account, an ISM reduction is not triggered. In 2019, is strategy is saving SNT beneficiaries $3,324 a year in SSI benefits that otherwise would be lost due to ISM reduction.

To discuss your NJ special needs trust matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.

By Fredrick P. Niemann, Esq., of Hanlon Niemann & Wright, a Freehold Township, Monmouth County NJ Special Needs Trust Attorney

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