In April 2015, Governor Sandoval signed legislation establishing the Nevada ABLE Savings Plan, creating a new type of savings plan with parallels to the better-known 529 Plan. Established as 529A Plans, “ABLE” stands for Achieving a Better Life Experience. ABLE Act savings plans allow anyone, including a beneficiary, to contribute funds for the benefit of a person with disabilities without triggering a penalty regarding the receipt of public benefits. These plans also allow the beneficiary to own the account, thereby increasing his/her autonomy and decision making, where possible.

Contributions are currently indexed to the gift tax exclusion limit of $14,000. This means that, in one year, contributions up to $14,000 can be made to the 529A account. Notably, however, the 529A Plan can accumulate assets up to $100,000, from contributions, interest and investment earnings. Interest and earnings are distributed tax free so long as they are used for qualified purposes. Unlike many special needs trusts, ABLE accounts are not subject to government pay back provisions, although the government will be treated as a creditor upon the beneficiary’s death. Funds may be rolled over from a 529A account into a traditional 529 account if the beneficiary is no longer deemed disabled. Rollovers are also allowed into another family member’s ABLE account, if needed. A beneficiary is allowed to have only one 529A account; if more than one is established, only one will qualify for the preferred treatment of a 529A plan.

ABLE account funds can be used to pay for “Qualified Disability Expenses” without causing a penalty against a beneficiary receiving public benefits, though there will be a 10% surtax for improper distributions. The details of how payments will be made and monitored are still being established, but “qualified” options include:

• Education. To include tuition for preschool thru post-secondary education, books, supplies, and educational materials related to such education, tutors, and special education services.

• Housing. Expenses for a primary residence, including rent, purchase of a primary residence or an interest in a pri¬mary residence, mortgage payments, home improvements and modifications, maintenance and repairs, real property taxes, and utility charges.

• Transportation. Expenses for transportation, including the use of mass transit, the purchase or modification of vehicles, and moving expenses.

• Employment Support. Expenses related to obtaining and maintain¬ing employment, including job-related training, assistive technology, and personal assistance supports.

• Health Prevention and Wellness. Expenses for health and wellness, including premiums for health insurance, mental health, medical, vision, and dental expenses, habilitation and rehabilitation services, durable medical equipment, therapy, respite care, long-term services and supports, nutritional management, communication services and devices, adaptive equipment, and personal assistance.

• Assistive Technology and Personal Support. Expenses for assistive technology and personal support.

• Miscellaneous Expenses. Financial management and administrative services, legal fees, expenses for oversight, monitoring, or funeral and burial expenses.

If you would like to learn more about ABLE Savings Plan accounts and other Special Needs planning options, please contact Kling Law Offices for a complimentary consultation.