Monday, September 5, 2016

TRANSITIONS TO ADULTHOOD: ABLE Accounts

Today is Part 3 in our 4 part series on Transitions to Adulthood 
Planning ahead will protect you, and understanding will guard you.
~ Proverbs 2:11, ERV ~

"We're going to lose everything!" I melted in tears looking at my husband the day our son was diagnosed with Hemophilia A - Severe.

I can remember the financial counselor at the local hemophilia foundation, whom I had known from my years of volunteering, trying to console me by phone that day, "You have the distinct disadvantage of knowing a little too much. Calm down. We'll help you with this."

While I am relieved to say that we have not lost everything in our years of raising an amazing young man with this million-dollar disorder, it has been a huge financial strain. When he was a newborn, it nearly took my breath away the first time I got a $1,500 bill for just his clotting factor alone. For the first 5 years of his life, even with good insurance, our out-of-pocket and deductible costs were a nightmare. Thank God, his health and standard of care, eventually brought him to a point where he qualified for Medicaid waivers. This has put an enormous safety net underneath him and our entire family.

Teetering between poverty and just barely being able to pay the bills seems to be where parents just like me continually dwell. The added medical bills, transportation costs, and extra loss of work days are only a few of the contributing factors that make raising our amazing and unique kids extra-challenging in the monetary realm. We want them to have the brightest future possible, just like any other growing youngster. Still, that financial piece can really make the prospect of their adult years look even darker to us.

Until recently, our children didn't even stand a chance getting on solid footing with their peers when it comes to finances. If a child receiving Social Security or SSDI benefits saved more than $2,000, their eligibility for benefits would be threatened. The only option to receive the help needed was to remain in poverty. Not a great choice. If grandparents had the foresight to give their grandchildren some money to put away for "some day," like one of my girlfriend's parents did, they could completely disqualify that grandchild for government benefits.

Thankfully, after years of advocacy and bipartisan support, the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014 or the ABLE Act was passed on the federal level. This allows a child like my son to save $14,000 per year or up to $100,000 in a tax-favored account similar to a 529 college fund without threatening benefits. The money can be used for such necessities as education, housing, transportation, and healthcare, amongst others. Some states, such as my home state of Wisconsin, have also passed legislation to make the earnings on these funds state income tax-free as well. This is a huge blessing to families like mine.

Suddenly, the future looks a little brighter for our children. However, it does require some investigation and planning. There are also tools, such as a special needs trust, that should be examined and compared to the ABLE account. Although moms and dads like me always seem to contend with weariness, we must do our homework. Finding a local financial advisor we trust is also critical. In addition, it definitely pays to talk to other parents for references and insights on an issue of this nature.

Although the monetary load of caring for the beautiful children we love may never completely equal that of their typical peers, things like the ABLE account certainly go a long way toward leveling the playing field.

Now, to remind all of the relatives to contribute towards that account!

PRAY: Jehovah Jireh, You alone are our provider. Yet, You keep providing for us in new and amazing ways. We thank and praise You for this financial tool to help our children. Please grant us clarity and wisdom as we explore the details of this opportunity. Comfort us with peace as we examine this stressful part of our lives.

~ Barb Dittrich

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