In Perspectives

I’m not sure how much you know about the ABLE act, but in case you didn’t read my last blog, the ABLE act allows an individual with a disability to create a savings account that can hold up to $100,000 without disrupting his or her means tested benefits (technically a Michigan ABLE account can hold up to $500,000, but anything over $100,000 will disrupt means tested benefits).  If the individual currently receives benefits through SSI and/or SSDI, and had the disability before the age of 26, he or she is automatically eligible to establish an ABLE account.  The state allows annual deposits into the account of up to $14,000 (for 2016 and 2017 – this amount will be adjusted, it is the same as the annual individual gift tax exclusion amount), and an individual making the deposit can receive up to a $5,000 deduction on his or her taxes for a single return ($10K for joint filers).

The funds from an ABLE account can be used for “qualified distributions,” which includes paying for expenses related to education, housing, transportation, health, legal fees, assistive technology and personal support services, and more; this is much less restrictive than funds held in a special needs trust.  With special needs trusts if assets are used to pay for housing, the individual’s benefits will be decreased (usually by around $300).  One planning tip that was mentioned at a conference I was at a couple months ago was to have the special needs trust transfer assets to the ABLE account, and then use the ABLE account funds to pay for at least part of the housing; this way means tested benefits are not disrupted, and the individual gets the help they need with housing costs.

While this is now up and running in Michigan, many suggest waiting to opening an account here for now.  The Michigan ABLE act is not yet completely put together like the act that our neighbor, Ohio, has done; so it might be best waiting a bit.  For example, when this passed in Michigan, there was not any funding allocated for it so they had a very difficult time getting anyone to hold these accounts; Ohio allocated around $10MM, which enabled it to hit the ground running.  Additionally, there are not any procedures in place right now in Michigan for how these accounts are to be used, so you may put money in, but it’s unknown how you get money back out.   If you would like to fund one of these accounts now, you can start in Ohio (they offer reciprocity, although you will not get the tax deduction as Ohio does not offer that), and then transfer it here when Michigan is a bit more established.

In summary, the ABLE account will be another tool in the tool belt of families with a child that has special needs, but it will not be a stand-alone problem solver.  To find out more about the program here in Michigan, check out this link:

http://www.michigan.gov/mistudentaid/0,4636,7-128-60921_74426—,00.html

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.

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USA PATRIOT Act

Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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Legacy Trust makes no representation concerning nor is it responsible for the quality, content, nature, or security of any hyperlinked site. This link is provided as a convenience and does not imply any investigation or endorsement of the site.

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