August 14th is ABLE Savings Day

Dear Colleagues,

August 14^th is ABLE Savings Day!  As we approach the 10^th anniversary of the passage of the Achieving a Better Life Experience legislation, over 171,000 Americans with a disability have been able to save for their future and have more independence than ever before.  What a difference has been made in their lives.

As we go out and meet our future and current ABLE account owners, it is inspiring to hear their individual stories on how ABLE accounts help them and positively impact their families.  It is also instructional when you hear the stories from these individuals, and how additional enhancements to these plans could really help them.

Recently, we had a family that we first met 5 years ago, open three Alabama ABLE accounts for three of her daughters.   This family has 5 daughters, 3 of which are biological.   One of the biological daughters, as well as  the 2 daughters they adopted from Ukraine, were born with Down Syndrome.

The mother had attended several of our ABLE presentations throughout the years and finally decided it was time to open the accounts for her girls.  Her daughters live at home and rarely spent the SSI money they receive monthly.    They were frequently having to pre-buy necessities for the year in order to spend down below the $2,000 amount.   It had become common for them to buy deodorant, toothpaste, shampoo, etc. in bulk amounts in order to preserve their benefits.  She said that it has always been her fear that she could lose the benefits she fought so long and hard to get for her girls, over a simple mistake.

She is now saving for all three of her girls and putting money away for them for any unexpected needs that come up.   She told us that being the parent of a special needs child is different.  “No parent ever wants their child to pass away before they do, but as the parent of a special needs child, you also fear what happens if you pass away before them.”  The ABLE accounts are her first step to planning for the unknown.

What was very helpful when opening the accounts for this family was the successor beneficiary option.   The IRS final regulations issued in November of 2020 established that a successor beneficiary can be named on an ABLE account in the event of the death of the beneficiary.  The successor beneficiary must be a sibling, step-sibling, or half-sibling of the designated beneficiary, and must also have a qualifying disability.  With this enhancement, the mother was able to name a sister on each of the accounts she opened as the successor beneficiary.   What she would like to see enhanced on this option is the allowance of naming more than one successor beneficiary on an account.  In the event that one of her daughters passes away, the money in her account would be split equally between the two remaining sisters.

Looking back over the past 10 years, it is overwhelming and heartwarming when we look at the people we have helped and the impact it has made on their lives.  Going forward, as we continue to hear these personal stories, I am hopeful we will be able to identify and implement enhancements to these accounts that are vital for these individual’s financial security and well-being.

Sincerely,

Treasurer Young Boozer
State of Alabama