Missouri and Kansas are teaming with seven other states to introduce an investment account aimed at helping families with younger children that have disabilities and special needs to save money for education, housing, transportation and other major expenses.
Achieving a Better Life Experience accounts were created through a federal law at the end of 2014. The law established the framework for states to develop and administer these accounts, much like they do with college 529 savings plans.
While most states have authorized the ABLE accounts, none is yet offering them.
However, Missouri and Kansas earlier this month committed to working with Alaska, Illinois, Iowa, Minnesota, Nevada, Pennsylvania and Rhode Island to establish ABLEs in their own states. By working together, the nine states hope to secure lower-cost bids for investment services, record keeping and marketing.
No date has been set for a rollout.
The accounts have two major benefits. They allow people to set aside money in mutual funds and other investments to be used tax-free for eligible expenses. The accounts generally provide the ability to shelter the income without the risk of losing government benefits through programs such as Medicaid and Supplemental Security Income.
“These accounts will give families more financial security and empower them to make long-term planning decisions surrounding their specific needs,” Missouri treasurer Clint Zweifel said in a statement.
To be eligible for an ABLE, according to federal guidelines, a child must be blind or have another severe physical or mental disability before age 26. Other guidelines can expand eligibility.
While experts have said the accounts may be a good option for many people, there may be drawbacks relating to Medicaid claims after the beneficiaries’ death.
Steve Rosen: 816-234-4879