Special needs planning

Facebook-793048_640Bellomo and Associates recently did a Facebook live event for special needs families to help them understand the importance of planning for their children with special needs. It was a live two-hour presentation that also hosted a full group of people in the workshop room at Bellomo and Associates.  The event was a huge success, and we have received great feedback from the special needs community about its positive impact on the families.

We do weekly estate planning and Medicaid preparation workshops in our office, and typically do about eight workshops a month in our office, and about another two to four a month out in the community.  However, we rarely have the opportunity to do a full two-hour presentation for families, and this recent event provided that. I give presentations to groups all over the country, but I was especially excited about this event. I enjoyed the process of creating the program and completely new PowerPoint slides in order to be able to give a full two-hour presentation on the topic.  

Families with children who have special needs often do not know where to turn to receive information about public benefits and what happens if their children have too much money or if a family member wants to leave a child with special needs money upon death.  The landscape is often confusing and overwhelming. Thus, when Jessica from Easter Seals asked us to do this event, we jumped on the opportunity.

The presentation itself covers everything on the basics from powers of attorney to guardianships, as well as about how to give money to a child with special needs in a way that will not disqualify the child from government benefits. It also covers how people with special needs can have money of their own and still be able to continue benefits and also potentially continue to receive money or other inheritances and such. We received great questions from both the live audience and the Facebook live community, and have gotten great feedback since the event as well.  

Because we want other families with children with special needs to be able to benefit from this event as well, we are leaving the recording of the live event on our Facebook page so it can be watched in the future. We hope you enjoy it as much as we enjoyed presenting it.  

If you or somebody you know has a child with special needs, please watch the video, and contact us if you have any further questions. We will be happy to meet with you.  Just contact us by clicking here.

Jeffrey Bellomo, Esq.


A 529 Savings Plan for the Disabled?

Graduation capThis isn’t exactly a 529 plan. However, it’s sort of like one. It’s a new kind of account that’s similar in some ways and is designed especially for those individuals with disabilities.
An NJ101.5 article, “Special accounts for the disabled,” explains that President Obama signed the Achieving a Better Life Experience (ABLE) Act in 2014 as part of the Tax Increase Prevention Act of 2014. The law allows qualified individuals with disabilities to have tax-free savings accounts in which they can save up to $100,000 without jeopardizing eligibility for Supplemental Security Income (SSI) and other means-tested government programs like Medicaid. SSI benefits are suspended for individuals whose accounts are over $100,000, but their Medicaid benefits will continue.
The plan is modeled on 529 college savings plans, and interest earned on savings is free from income tax; however, contributions to the account will not be tax-deductible.
ABLE accounts are different from 529 plans in that the funds in these accounts can pay for education, health care, transportation, housing and some other similar expenses. To qualify, an individual has to have a disability that happened prior to age 26. Also, each individual with disabilities may have only one ABLE account, and the annual contributions are capped at the federal annual gift tax exclusion. That’s $14,000 this year.
Any funds that remain in the account when the account beneficiary dies must first be used to repay Medicaid for expenses incurred on behalf of the beneficiary.
States can offer these types of plans to people with disabilities, but they first must adopt regulations before financial institutions can offer the plans. Right now, Ohio is the only state in the country that currently offers such a plan, but other states’ residents can open an Ohio STABLE account.
The ABLE Act gives those caring for special needs loved ones another tool. However, the establishment of first- and third-party special needs trusts should be considered when contributions exceed the amounts allowed under the Act or when third parties don’t want their assets to be subject to a Medicaid payback.
A qualified elder law attorney can help guide you through your options.
Reference: NJ101.5 (July 1, 2016) “Special accounts for the disabled”


Adoption Tips for Those Planning on Adding to Their Families

Mom kissing babyAccording to the U.S. Department of Health and Human Services, the costs of adopting can be anywhere from a few hundred dollars to more than $40,000, depending on the form of adoption you select.

Biz Times' recent article, "Getting your finances ready for adoption," says that in order to get your finances ready for adoption, you have to do your homework and be certain the price and processing work of adoption won't wipe out your plans for essential financial goals like retirement, saving for your future child's education, and higher daily living expenses with a new family. Begin with these tips:

Examine your finances first. Work with qualified financial or tax professionals to review if you will be able to manage adoption costs from savings or grants you don't have to pay back. Starting a family is a major overall financial commitment—no matter what strategy you choose to build yours.

Understand the tax benefits of adoption. The federal government has tax breaks for adoption, but make sure you study and follow the rules. The IRS says that tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion from income for employer-provided adoption assistance. The credit's nonrefundable, so it's limited to one's tax liability for the year. Any credit in excess of tax liability can be carried forward for up to five years. In addition, adoptions of special needs children may qualify for special tax treatment.

Look into workplace benefits. A recent study showed that about 12% of U.S. employers offered a financial adoption benefit in 1990, compared to 52% now. See if your employer offers adoption benefits and factor those benefits into your overall financial plan.

Gauge your legal costs. This is a legal process, and based on the type of adoption process you pursue, you'll need to consult with an attorney to make sure your application is in order and your rights are protected.

Networking and education. A huge leg up on the entire process is getting involved with support and planning groups for parents of adopted kids and those who are planning to adopt.

Sound financial planning to support your adoption process will help give your new family the best possible start.

Reference: Biz Times (May 3, 2016) "Getting your finances ready for adoption"

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