February 17, 2025 • 11 mins
Host Meghan (Smallwood) and (Patrick Cadigan) discuss estate planning for individuals with disabilities, focusing on ABLE accounts and special needs trusts. They review how ABLE accounts, available in over 45 states, can be used for various expenses like transportation, medical bills and education. They also cover how a special needs trust is managed by attorneys to ensure funds are used for a beneficiary's sole benefit and other useful information. Join the conversation!
Episode Keywords:
estate planning, ABLE account, special needs trust, SSI, Medicaid, financial management, disability, public benefits, assistive technology, guardianship, power of attorney
Links:
IRS- ABLE Accounts Information (site)
ABLE National Resource Center (site)
Special Needs Trust Information (site)
Maryland (specific) Links/Supports:
Maryland ABLE Accounts (site)
To download a copy of a transcript for this episode or any of our previous conversations, click here.
Also visit our Podcast webpage to find links to all of our other discussions; go to www.p2transition.com.
Additional information about post-secondary transition can be found at our website.
The Post-Secondary Transition Podcast Facebook page.
Visit our YouTube Channel to find additional video resources.
Intro/Outro music by AudioCoffee from Pixabay.
Transition music by Joseph McDade from Transistor.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Meghan Smallwood (00:00):
Meghan, welcome. This is the Post
(00:01):
Secondary Transition podcastwhere we have conversations
around the ins and outs andeverything in between of the
transition process for familiesof students with disabilities.
I'm one of the hosts. My name isMeghan Smallwood, and I am a
public school transitioncoordinator. And as always, I
have my co host with me.
Patrick Cadigan (00:18):
My name is Patrick Cadigan. I am also a
public school transitioncoordinator, and here we go. We
are back to have anotherconversation around the Post
Secondary Transition process forfamilies. Okay, that was a
terrible setup. All right,Meghan, what are we talking
(00:41):
about today?
Meghan Smallwood (00:43):
Today we're going more into that estate
planning area. When you thinkabout what to do with finances
for your individual with adisability. And I know a lot of
families will say, well, theydon't really have a lot to worry
about when they think of assets,but if you think about money
coming in from SSI, or, let'ssay, somebody leaves them a
(01:06):
large sum when they pass away,you've got to do something with
it so it doesn't impact the SSI.
So there are options, and that'swhy they're important to know
what an ABLE account and aspecial needs trust is.
Patrick Cadigan (01:19):
Okay? So then we'll go ahead and we'll dive
into it. Why don't we start thenwith an ABLE account? What So my
understanding, and I don't knowa lot about it, but my
understanding, is that the ABLEaccounts were set up. They were
set up specifically for areason. What do families need to
(01:41):
know?
Meghan Smallwood (01:43):
Yeah and I was just trying to see how many
states there are now that haveABLE accounts, I believe. Well,
the first able program opened in2016 and now I think there's
over 45 I'm not sure of theexact number, but Maryland,
obviously being one of them, itis a 529 A which is related to
(02:03):
that college savings account,which is the 529 it is not part
of SSI. It's not part ofMedicaid. However, like I
mentioned before, it kind ofgets involved with SSI because,
like I said, you can have morethan $2,000 in any account with
the individual's name on it forSSI purposes. So you need that
(02:24):
money to go somewhere if you'renot spending it down each month.
So an ABLE account is a goodoption to hold that money. It's
not taxable, it's easy to useand get the only STIP well, not
the only stipulation. One of thestipulations is that it cannot
exceed $15,000 annually. So ifyou have a money that's given to
(02:47):
the individual as a gift, youcan put it into this but if it's
you know, above 15,000 thenthat's when a trust might come
into play. You can have up to$100,000 without jeopardizing
your SSI in this ABLE account.
And like I said, it will notaffect the Medicaid part either,
and it's not used as assets, soyou're safe and protected from
(03:09):
that. It can be used for avariety of things. And actually,
I was going to mention about thewebsite, which is www dot
Maryland able.org but it's got aplethora of information on
there, and it really goes intodetail about examples of what
the money can be spent on. Itcan cover anything basically
(03:32):
relevant to the individual witha disability, as long as it's
being used for their purposes.
So transportation, any kind ofbasic living expenses, which
includes utilities for the housethey live in. It can help with
any additional fees you mighthave from medical bill or any
(03:53):
kind of equipment that might beneeded, such as wheelchairs or
walkers. It can help towardstheir rent or mortgage of a
house. It can help if they aregoing to further their education
and they're paying for tradeschool or books for a college
class. It helps with workrelated uniforms for employment,
(04:16):
any kind of licensing orcertification fees, assistive
technology, obviously, I mean,the list just goes on and on of
what it can be used for. So it'snot like the money goes into
this account and you're notallowed to touch it. It's
actually fairly easy to getaccess to the difference between
this and special needs trust,which I'll go into more detail
(04:38):
about, is that with the trust,there's more justification
needed, and typically a lawyeris involved in that process, you
can have a special needs trustand an ABLE account that is
allowed for ABLE accounts,though, the one thing you have
to remember is that eitherguardianship of property for the
individual is in place, or. Apower of attorney. And obviously
(05:02):
this is after they're 18, butpower of attorney is perfectly
fine to have to help manage theaccount. So like I mentioned,
there's a number of states thatABLE accounts are in, and it can
actually roll over from anotherstate. So let's say you have
plans to move out of Marylandeventually, if you're moving to
a state where ABLE accounts arethey, they can follow you there,
(05:25):
so you don't have to worry aboutclosing something and opening it
again. Like I said, did you notneed to not have SSI to open the
account? But it is a benefit ifyou're receiving SSI and you're
trying to keep that money down,and it's fairly easy to open. I
know that sometimes around thestate, and I know in our county,
we get emails about pop up likeABLE account sessions where
(05:47):
someone will be available toanswer questions or help you
open the account. They'rewonderful with their assistance
in the process, but you caneasily go on to their website,
which, again, iswww.marylandable.org so to
enroll and manage your account,and they also offer live chat,
(06:07):
online requests and customersupport.
Patrick Cadigan (06:09):
And there will be a link in our show notes to
that site. Now we obviouslyrecognize that not everybody
that is listening is going to bein the state of Maryland. So we
also have an additional resourcefor you guys. It's the ABLE
National Resource Center. Nowthis has a whole host of
additional links that comparethe different states. That can
(06:32):
do a state plan search, or youcan even select a state program.
So good. This is a greatresource to use if you are not
necessarily in the state ofMaryland, or even if you're in
the state of Maryland, again,there will be a link to that in
the show notes. All right, so Iwould say that's a fairly, you
know, broad overview of ABLEaccounts. And again, you had
(06:55):
talked about special needstrust. So what is the big
overarching difference betweenthe two?
Meghan Smallwood (07:02):
So for special needs, trust, like I said,
typically, this involves goingto the attorney, and that is
just to make sure that the trustfunds are just decided how to
use them and everything is inorder with them. I think one of
the biggest things to know isthat the primary purpose is to
(07:24):
provide for the beneficiary'sneeds and also without
jeopardizing their eligibilityfor SSI and other public
benefits. So you can supplement,rather than supplant these
benefits. So again, the survivorneeds trust can be used for such
a wide variety of things, and Icouldn't even go, like I was
(07:44):
going through the list, and I'mlike, Huh, that's good to know.
Like, I think there's a fearthat when you put money into
accounts like this, that youit's almost like a savings
account, like you leave it thereand you're not allowed to touch
it for certain things. But thinkof like tickets for travel or
vacation. This is a perfectexample of what the money from a
special needs trust can be usedfor. It can be used for
(08:05):
memberships. It can be used forclothing. I mean, obviously for
DDA purposes, they will becovering a variety of things
like assistive technology ifit's included in your person
centered plan. But you know,this is nice to have if it's not
covered, and other things thatcome up along the way. So I
(08:25):
think that the most importantthing to recognize is that the
assets need to be used for thebeneficiary, sole benefit. Okay,
so the prime benefit has to bethem, and not for someone else.
And I think that is one thing,especially with the special
needs trust, that they will keepa close eye on. There are, you
know, certain things that itcannot be used for, such as
(08:47):
gifts for people, and that's thesame for ABLE account as well.
Larger purchases, obviously, areloans to other people. It has to
be used at the benefit of thebeneficiary. I would also say,
if you're looking at a specialneeds trust, you definitely want
to find an attorney whospecializes in it or is very
familiar with it. And I know inour county, we have a number of
(09:10):
them, and some of them actuallywill give these kinds of
informational sessions aboutspecial needs trust and other
estate planning on a monthlybasis. But you want someone
who's knowledgeable and thenkind of lead you through it the
proper way.
Patrick Cadigan (09:23):
Very cool. I hate to say it. I know that this
is a really quick and/or shortdiscussion. Both Meghan and I
have been hammered at worklately. And for those not in the
know, over here on the EastCoast, or at least where we are,
we keep getting these snow days,which I used to be a fan of, and
(09:44):
now that I have changed my joband I am doing transition
coordinating, I actually don'tlike snow days because they
completely mess up my schedule,but we are planning to come back
later with i. Obviously moreconversations, and we look
forward to that, and we willcatch up with you guys soon.
Meghan Smallwood (10:07):
Yep, sounds good.
Patrick Cadigan (10:16):
You'll find all the links to the information
from our conversations in ourshow notes. We would love for
the information from this andall our other discussions to
reach as many families aspossible, and we need your help
to do that. You can find ourconversations at www, dot p2
transition.com, like, follow andshare out the podcast. Our
(10:37):
conversations are posted to allthe major platforms, including
Apple podcasts, Spotify, YouTubemusic, and that's just naming a
few. So please share and shareoften.
Meghan Smallwood (10:48):
Please also check out our YouTube channel.
Now that we've done some of theleg work for you by curating
videos of topics that revolvearound transition, we have
playlists for guardianshipalternatives to guardianship
ABLE accounts, and there's moreto come, so please be sure to
subscribe there as well. Andthen finally, check out our
website, which is full ofinformation and links to
resources around the transitionprocess. So open your web
(11:11):
browser of choice and surf towww.postsecondarytransition.com
and we thank you so much for thetime you spent with us, and look
forward to talking again soon.
Meghan, welcome. This is the Post
(00:01):
Secondary Transition podcastwhere we have conversations
around the ins and outs andeverything in between of the
transition process for familiesof students with disabilities.
I'm one of the hosts. My name isMeghan Smallwood, and I am a
public school transitioncoordinator. And as always, I
have my co host with me.
Patrick Cadigan (00:18):
My name is Patrick Cadigan. I am also a
public school transitioncoordinator, and here we go. We
are back to have anotherconversation around the Post
Secondary Transition process forfamilies. Okay, that was a
terrible setup. All right,Meghan, what are we talking
(00:41):
about today?
Meghan Smallwood (00:43):
Today we're going more into that estate
planning area. When you thinkabout what to do with finances
for your individual with adisability. And I know a lot of
families will say, well, theydon't really have a lot to worry
about when they think of assets,but if you think about money
coming in from SSI, or, let'ssay, somebody leaves them a
(01:06):
large sum when they pass away,you've got to do something with
it so it doesn't impact the SSI.
So there are options, and that'swhy they're important to know
what an ABLE account and aspecial needs trust is.
Patrick Cadigan (01:19):
Okay? So then we'll go ahead and we'll dive
into it. Why don't we start thenwith an ABLE account? What So my
understanding, and I don't knowa lot about it, but my
understanding, is that the ABLEaccounts were set up. They were
set up specifically for areason. What do families need to
(01:41):
know?
Meghan Smallwood (01:43):
Yeah and I was just trying to see how many
states there are now that haveABLE accounts, I believe. Well,
the first able program opened in2016 and now I think there's
over 45 I'm not sure of theexact number, but Maryland,
obviously being one of them, itis a 529 A which is related to
(02:03):
that college savings account,which is the 529 it is not part
of SSI. It's not part ofMedicaid. However, like I
mentioned before, it kind ofgets involved with SSI because,
like I said, you can have morethan $2,000 in any account with
the individual's name on it forSSI purposes. So you need that
(02:24):
money to go somewhere if you'renot spending it down each month.
So an ABLE account is a goodoption to hold that money. It's
not taxable, it's easy to useand get the only STIP well, not
the only stipulation. One of thestipulations is that it cannot
exceed $15,000 annually. So ifyou have a money that's given to
(02:47):
the individual as a gift, youcan put it into this but if it's
you know, above 15,000 thenthat's when a trust might come
into play. You can have up to$100,000 without jeopardizing
your SSI in this ABLE account.
And like I said, it will notaffect the Medicaid part either,
and it's not used as assets, soyou're safe and protected from
(03:09):
that. It can be used for avariety of things. And actually,
I was going to mention about thewebsite, which is www dot
Maryland able.org but it's got aplethora of information on
there, and it really goes intodetail about examples of what
the money can be spent on. Itcan cover anything basically
(03:32):
relevant to the individual witha disability, as long as it's
being used for their purposes.
So transportation, any kind ofbasic living expenses, which
includes utilities for the housethey live in. It can help with
any additional fees you mighthave from medical bill or any
(03:53):
kind of equipment that might beneeded, such as wheelchairs or
walkers. It can help towardstheir rent or mortgage of a
house. It can help if they aregoing to further their education
and they're paying for tradeschool or books for a college
class. It helps with workrelated uniforms for employment,
(04:16):
any kind of licensing orcertification fees, assistive
technology, obviously, I mean,the list just goes on and on of
what it can be used for. So it'snot like the money goes into
this account and you're notallowed to touch it. It's
actually fairly easy to getaccess to the difference between
this and special needs trust,which I'll go into more detail
(04:38):
about, is that with the trust,there's more justification
needed, and typically a lawyeris involved in that process, you
can have a special needs trustand an ABLE account that is
allowed for ABLE accounts,though, the one thing you have
to remember is that eitherguardianship of property for the
individual is in place, or. Apower of attorney. And obviously
(05:02):
this is after they're 18, butpower of attorney is perfectly
fine to have to help manage theaccount. So like I mentioned,
there's a number of states thatABLE accounts are in, and it can
actually roll over from anotherstate. So let's say you have
plans to move out of Marylandeventually, if you're moving to
a state where ABLE accounts arethey, they can follow you there,
(05:25):
so you don't have to worry aboutclosing something and opening it
again. Like I said, did you notneed to not have SSI to open the
account? But it is a benefit ifyou're receiving SSI and you're
trying to keep that money down,and it's fairly easy to open. I
know that sometimes around thestate, and I know in our county,
we get emails about pop up likeABLE account sessions where
(05:47):
someone will be available toanswer questions or help you
open the account. They'rewonderful with their assistance
in the process, but you caneasily go on to their website,
which, again, iswww.marylandable.org so to
enroll and manage your account,and they also offer live chat,
(06:07):
online requests and customersupport.
Patrick Cadigan (06:09):
And there will be a link in our show notes to
that site. Now we obviouslyrecognize that not everybody
that is listening is going to bein the state of Maryland. So we
also have an additional resourcefor you guys. It's the ABLE
National Resource Center. Nowthis has a whole host of
additional links that comparethe different states. That can
(06:32):
do a state plan search, or youcan even select a state program.
So good. This is a greatresource to use if you are not
necessarily in the state ofMaryland, or even if you're in
the state of Maryland, again,there will be a link to that in
the show notes. All right, so Iwould say that's a fairly, you
know, broad overview of ABLEaccounts. And again, you had
(06:55):
talked about special needstrust. So what is the big
overarching difference betweenthe two?
Meghan Smallwood (07:02):
So for special needs, trust, like I said,
typically, this involves goingto the attorney, and that is
just to make sure that the trustfunds are just decided how to
use them and everything is inorder with them. I think one of
the biggest things to know isthat the primary purpose is to
(07:24):
provide for the beneficiary'sneeds and also without
jeopardizing their eligibilityfor SSI and other public
benefits. So you can supplement,rather than supplant these
benefits. So again, the survivorneeds trust can be used for such
a wide variety of things, and Icouldn't even go, like I was
(07:44):
going through the list, and I'mlike, Huh, that's good to know.
Like, I think there's a fearthat when you put money into
accounts like this, that youit's almost like a savings
account, like you leave it thereand you're not allowed to touch
it for certain things. But thinkof like tickets for travel or
vacation. This is a perfectexample of what the money from a
special needs trust can be usedfor. It can be used for
(08:05):
memberships. It can be used forclothing. I mean, obviously for
DDA purposes, they will becovering a variety of things
like assistive technology ifit's included in your person
centered plan. But you know,this is nice to have if it's not
covered, and other things thatcome up along the way. So I
(08:25):
think that the most importantthing to recognize is that the
assets need to be used for thebeneficiary, sole benefit. Okay,
so the prime benefit has to bethem, and not for someone else.
And I think that is one thing,especially with the special
needs trust, that they will keepa close eye on. There are, you
know, certain things that itcannot be used for, such as
(08:47):
gifts for people, and that's thesame for ABLE account as well.
Larger purchases, obviously, areloans to other people. It has to
be used at the benefit of thebeneficiary. I would also say,
if you're looking at a specialneeds trust, you definitely want
to find an attorney whospecializes in it or is very
familiar with it. And I know inour county, we have a number of
(09:10):
them, and some of them actuallywill give these kinds of
informational sessions aboutspecial needs trust and other
estate planning on a monthlybasis. But you want someone
who's knowledgeable and thenkind of lead you through it the
proper way.
Patrick Cadigan (09:23):
Very cool. I hate to say it. I know that this
is a really quick and/or shortdiscussion. Both Meghan and I
have been hammered at worklately. And for those not in the
know, over here on the EastCoast, or at least where we are,
we keep getting these snow days,which I used to be a fan of, and
(09:44):
now that I have changed my joband I am doing transition
coordinating, I actually don'tlike snow days because they
completely mess up my schedule,but we are planning to come back
later with i. Obviously moreconversations, and we look
forward to that, and we willcatch up with you guys soon.
Meghan Smallwood (10:07):
Yep, sounds good.
Patrick Cadigan (10:16):
You'll find all the links to the information
from our conversations in ourshow notes. We would love for
the information from this andall our other discussions to
reach as many families aspossible, and we need your help
to do that. You can find ourconversations at www, dot p2
transition.com, like, follow andshare out the podcast. Our
(10:37):
conversations are posted to allthe major platforms, including
Apple podcasts, Spotify, YouTubemusic, and that's just naming a
few. So please share and shareoften.
Meghan Smallwood (10:48):
Please also check out our YouTube channel.
Now that we've done some of theleg work for you by curating
videos of topics that revolvearound transition, we have
playlists for guardianshipalternatives to guardianship
ABLE accounts, and there's moreto come, so please be sure to
subscribe there as well. Andthen finally, check out our
website, which is full ofinformation and links to
resources around the transitionprocess. So open your web
(11:11):
browser of choice and surf towww.postsecondarytransition.com
and we thank you so much for thetime you spent with us, and look
forward to talking again soon.
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