Residents of New York may either wait to create an ABLE account in New York or start one in another state.
ABLE accounts are bank accounts that enable persons with special needs to save money while still receiving disability payments. The federal ABLE (Achieving a Better Life Experience) Act inspired ABLE accounts, however they are formed and administered at the state level.
ABLE accounts are not yet available in all jurisdictions, and each state will have somewhat different laws and processes for creating and utilizing an ABLE account.
ABLE accounts are not yet available to residents of New York. However, a New York scheme should be available shortly (see SB 4472), and New York citizens may create an ABLE account in another state in the meanwhile.
People with special needs must demonstrate that they do not have enough money to maintain themselves independently when applying for disability payments. Any money in a typical bank account counts against a person’s eligibility for disability payments.
As a consequence, persons with special needs are unable to save money that they earn or acquire via inheritance or gifts. On a daily level, this implies that persons with special needs must live on very little money in order to get government assistance.
One solution to this problem is to employ special needs trusts, which give a location to preserve money for the benefit of the person with special needs (without affecting his or her eligibility for benefits). Special needs trusts, on the other hand, must be governed by a trustee, not the individual with special needs who benefits from the trust. This not only gives a special needs person minimal control over his or her resources, but it also inhibits the individual’s independence.
ABLE accounts cover this need by allowing persons with special needs to manage a small bank account without jeopardizing their eligibility for SSI, Medicaid, or other government assistance.
The federal ABLE Act establishes the fundamental guidelines for all ABLE accounts. (The federal act may be found at https://www.congress.gov/bill/113th-congress/house-bill/647/.) When states approve and execute the ABLE Act, they must follow federal guidelines while also adding their own. The following are the federal regulations:
When individual states enact the ABLE Act and establish ABLE accounts for their inhabitants, they may additionally establish regulations and policies regarding:
The New York ABLE Program is now in the process of developing its own ABLE account program. The program should be accessible in 2017, according to the state comptroller’s website (http://www.osc.state.ny.us/college/able.htm). In the meanwhile, you may create an account in another state that allows non-residents to open ABLE accounts. However, keep in mind that each individual may only have one ABLE account.
