Barnes Lipscomb & Stewart PLLC

Those Who Prey on Elderly Are Ohio Prosecutor’s Targets

In a clear warning, an Ohio prosecutor tells scammers they are now looking at felony charges.

Monetary crimes against the elderly were previously treated as misdemeanors and often settled in civil court.  However, changes in the law mean that today these cases are taken more seriously, as reported in The Journal-News article, “105-year-old woman trying to help grandson gets scammed out of $4,800.” Ohio’s Butler County Prosecutor Mike Gmoser told reporters that even a small amount of theft will result in felony charges.

Assistant Prosecutor Gloria Sigman successfully prosecuted three scammers, a couple who scammed a 105-year-old grandmother out of $4,800 using a clone phone app and another man who beat up and stole from a 75-year-old woman.

One victim was 105-year-old Louise Limper. Her former caregiver Latisha Garrett and her boyfriend Eric Kleinholz scammed Limper out of $4,800, telling her that her grandson needed the money because his car broke down in Dayton, Gmoser said.

Kleinholz had downloaded an app that allowed him to use his phone, and cloned another phone number, which was Miss Limper’s actual grandson’s phone number, according to Oxford Detective Matt Blauvelt. When Miss Limper received the phone call on her caller ID, it appeared it had her grandson’s phone number on it.

The caregiver took Limper to the bank to get the cash. She told Limper she would mail the money but stole the cash instead, officials said. Detectives got Kleinholz to confess to his part in the scheme.

Kleinholz, an ex-con, was found guilty of identity theft and theft and was sentenced to three years in prison. This was a first offense for Garrett, but because she was in a “position of trust,” the judge was able to send her to prison for 18 months on the two felony counts of telecommunications fraud and theft.

The second case involved Randy Villani, 50, who attacked a 75-year-old woman and stole $1,000 from her. Villani did some odd jobs for the victim.  However, he also convinced her to give him $300 he said he needed to get his sister out of jail and for his mother, who lives in the same trailer park, to buy groceries. Both turned out to be lies, according to police.

The last time he came to her house, he allegedly became violent and told her “If you call the police, I will come back and rape you and I will kill your husband.”

The victim’s daughter had just given her $1,000 for bills, medicine, and to repair her air conditioner. Villani took it and ran out, officials said. A jury found him guilty of aggravated burglary, robbery, aggravated menacing, and disrupting public service. Villani will be sentenced next month.

Gmoser told reporters that the Elder Abuse Task Force did a tremendous job in this case, and said that every police agency in the country is helping his team protect the elderly. “That is a sea change from years ago,” he added.

Reference: (Liberty Township, OH) Journal-News (March 23, 2018) “105-year-old woman trying to help grandson gets scammed out of $4,800”

Having “The Talk” with Parents: This Time, About Retirement Planning

Like any tough topic for families, listening without being judgmental is a big part of a success. It is also important to remember that your parents have worked hard to earn their retirement. Respect that.

Discussing retirement and estate planning is not as much fun as planning a multi-generation vacation, but the conversation is very important, as noted in a recent article from Motley Fool, “3 Tips for Talking to Your Parents About Retirement.”

A 2016 Fidelity study found that 38% of parents say they don't talk to their adult children about retiring, because the conversation never comes up. The survey also found that 93% of adult children and 95% of parents had greater peace of mind, after having "any" detailed conversation about the parents' estate planning.

 These conversations can be difficult, but here are a few ideas that may help when talking with parents.

Listen First. Some families still see conversations about money as taboo, and some parents may not think they need to discuss their finances with their adult kids. It is, therefore, important to listen to what your parents are saying when they do talk about the subject. Try to listen first and figure out what they want. Sometimes, they want input on their decisions.  There are other times when they just want to let you know what decisions they've already made.

Research. If your parents talk to you about their retirement plans, it can be tempting to immediately offer your opinions. It’s quite possible that your parents and you need to do some more homework before finalizing any retirement plans or offering advice. It’s also possible that they have done a lot of research on their own.

It's Their Money, Not Yours. Remember that you can't dictate how your parents spend their money. If they want to blow their retirement savings on big vacations or assisting family members to their own detriment, it’s their decision.

This definitely gets more complicated, if you're the one who might end up financially supporting your parents as they get older. But you can't and shouldn't be trying to control your parents' financial decisions.

The family should also have respectful conversations about parent’ estate plans. If you learn that your parents do not have an estate plan, including wills, advance directives and other necessary documents, encourage them to see an estate planning attorney. They may feel more comfortable using the same estate planning attorney that you or another family member has worked with.

Reference: Motley Fool (March 31, 2018) “3 Tips for Talking to Your Parents About Retirement”

What Does an Advance Directive Do?

It’s the worst-case scenario: you become ill or are injured and can’t convey your wishes for end-of-life care. Having an advance directive as part of your estate plan is good.  However, it’s just the start.

Once you have an advance directive, which explains your wishes for end-of-life care, you’ve taken step one. Next, you need to have a conversation with your family about it. You want to make sure that they understand what your wishes are, and you need to let them know where the document is located. If your wishes change, you need to update the document.

Kiplinger’s recent article, “Advance Directive: Ensure End-of-Life Wishes Honored,” notes that many people say, “My family knows what I want, so I’m covered.” But too frequently, that’s not the case.

If you haven’t drafted an advance directive or named a health care proxy, or your loved ones can’t locate it in an emergency, chances are good that your wishes won’t be honored.

If you don’t have an advance directive, create one now and share it.

An advance directive, which usually refers to a living will and a health care power of attorney, should state your preferences for medical treatment in an accident or at the end of your life. It should also designate an agent to make decisions on your behalf, if you’re incapacitated.

Make copies and give them to family members and your medical team. Keep your copies where they can be easily located.

Be certain that your loved ones are clear about your wishes and are willing to carry them out. Have a family conversation that includes as many people as possible, including adult grandchildren. Let them know your preferences, such as: Do you want to be kept alive on a ventilator? Are you willing to live in a nursing home?

Next, ask a trusted relative or friend to be your health care agent. Choose a person who can handle the responsibility and discuss it in depth.

Just as you need to update your estate plan when major life changes occur, you should also review your advance directive with an experienced estate planning attorney. Those changes include the death of a spouse or a child, divorce, a serious illness, a marriage or a new baby.

Reference: Kiplinger (February 5, 2018) “Advance Directive: Ensure End-of-Life Wishes Honored”

Alternatives to Consider When Hearing Loss Becomes a Problem

Today’s technology has led to the creation of over-the-counter devices that are more affordable than hearing aids, which are often not covered by Medicare.

One of the least acceptable signs of aging for Baby Boomers is to need to wear a hearing aid. The problem, according to a recent article in Kiplinger’s, “Medicare Doesn't Cover Hearing Aids but Retirees Have Options,” is that hearing loss is such a gradual process that people don’t realize that it is even happening. They usually think it’s that other people are mumbling!

As people age, they often don't recognize hearing decline or seek treatment for it. It takes an average of seven to 10 years from the time someone recognizes he or she has a hearing loss until they are open to getting help.  Roughly 80% of adults who could use a hearing aid don't get one, according to a report by the National Academies of Sciences, Engineering and Medicine.

Baby boomers can be reticent to take even the first step of getting a hearing test. They hate the idea of having to wear a big ugly plastic thing behind their ears, like their grandparents did. Hearing aids can also be expensive, as much as $3,000 per ear, and they aren't covered by Medicare or by other insurance plans.

It was welcome news for people with hearing loss, when Congress last August authorized the FDA to create a new class of hearing devices, which will be available over the counter—with a cost far less than what you pay for a device from the audiologist's office. The over-the-counter hearing aids are for adults with mild to moderate hearing loss and will be FDA-regulated. Certain hearing aids and other hearing wearable devices will soon be available in pharmacies and electronics retailers.

This can be confusing because some over-the-counter alternatives, sometimes called personal sound amplification products, are available now in stores. The quality and prices for the devices vary widely—some disposables sell for $20 to $30 per pair, while high-tech sound amplifiers cost several hundred dollars. However, these devices aren't considered medical devices or regulated by the FDA. Therefore, they can't be marketed as hearing aids or as a product to improve hearing loss, even with the new law.

The FDA has up to three years to write regulations and set safety and labeling rules for the authorized OTC devices. When the regulations are in place, expect lower prices for FDA-approved aids and more choices.

But don't wait to address your hearing health. Get tested. Here are some signs of when to consider having your hearing tested, according to the FDA:

• It seems like one side of your car speakers aren’t working.
• More than one person tells you there’s no need to shout.
• Everyone around you seems to be mumbling.
• You are watching television with the sound at full volume, but you don’t think it’s loud.
• Dripping faucets or bird songs have become very faint, or you don’t hear them at all.

Reference: Kiplinger (March 3, 2018) “Medicare Doesn't Cover Hearing Aids but Retirees Have Options”

Can There Be an Exception to a No-Contest Clause?

Where a will contest is made in good faith, a Wyoming court rules that it will not allow an exception to enforcing a no-contest clause.

The idea of a no-contest clause or in terrorem clause is to prevent any parties with standing from contesting an estate, but the threat of penalties or litigation doesn’t seem to warn off everyone.

In a case heard by the Supreme Court of Wyoming, a trust's in terrorem clause stated that any challenge made by or on behalf of the settlor's son or grandchildren would terminate any interest in the trust of any descendant, reports Leagle.com in the case of “EGW v. First Fed. Sav. Bank.”

The Appellants were the grandchildren of Mr. Willey, who created a revocable trust. They filed suit seeking to prevent the sale of land held in the trust. They challenged the court's grant of summary judgment in favor of the Appellees, a bank that was the successor trustee, and the beneficiaries of the trust. The district court determined that the Appellants were no longer beneficiaries of the trust, as a result of their father's 2014 lawsuit against Mr. Willey and his wife.

Among the issues that the Appellants presented was whether, as a matter of law, the Appellants' father's 2014 lawsuit challenged only the 2010 Trust Amendment, at a time when the in terrorem clause did not disqualify the Appellants.

In 2001, Allen Willey created a revocable trust that provided for the management of his assets during his lifetime and for distribution of the assets upon his death. A ranch was included as a trust asset. Mr. Willey served as the trustee of the trust during his lifetime, and the trust initially named his son Spencer as successor trustee. The trust ultimately benefitted Spencer's minor children, E.W. and A.W.

Mr. Willey amended the trust to add his wife's daughter and granddaughter as beneficiaries. In 2010, he made additional changes to the original trust, removing Spencer as beneficiary and successor trustee. The Appellants remained as beneficiaries.

In 2014, he amended the trust again and changed the successor trustee to a local bank. The charge also provided that under no circumstances, should Spencer or any lineal descendant of Mr. Willey be named trustee. The amendment also added an in terrorem, or "no-contest" clause, which is the subject of the case.

In 2013, Mr. Willey hired a real estate broker for to sell the ranch. Spencer filed for an injunction and Declaratory Judgment against Mr. Willey, individually and as trustee of the trust, and Mr. Willey's wife. Spencer sought to set aside the listing of the ranch and requested that Mr. Willey be removed as trustee due to incapacity. Spencer also alleged that Mrs. Willey had exercised undue influence over Mr. Willey and convinced him to sell the ranch, instead of leaving it in the trust. Spencer amended his claim to add that Mrs. Willey exercised undue influence over Mr. Willey by convincing him to remove Spencer from the trust, reduce the benefits to E.W. and A.W. and grant additional benefits to herself.

About a month after the Amended Complaint was filed, Mr. Willey died. The case went to trial, and the jury found that the trust amendments weren’t the product of undue influence. Spencer appealed, and the Wyoming Supreme Court affirmed.

As that appeal was pending, the Appellants filed this action through Spencer, who acted as "next friend" for his children. They sought an injunction preventing sale of the ranch, a judgment that the in terrorem clause wouldn’t apply to them, removal of the bank as trustee, and damages for the bank's alleged breach of fiduciary duties.

After a hearing, the district court granted summary judgment to the Appellees, determining that the Appellants' claims relating to Spencer's standing (right to bring a lawsuit) in the 2014 suit lacked support or authority. But the court said that Spencer had standing to challenge the trust in the 2014 action and that the challenge terminated E.W.'s and A.W.'s interest in the trust.

On appeal, the Appellants claimed that Spencer's 2014 suit could not have constituted a "challenge" to the trust because the suit was filed during Mr. Willey's lifetime. Further, the Appellants assert that, because Mr. Willey did not remove them as beneficiaries after the 2014 suit was filed, he must have intended for the in terrorem provision not to apply. The Supreme Court of Wyoming didn’t agree.

Chief Justice E. James Burke wrote in his opinion that Wyoming doesn’t recognize an exception to enforceability of no-contest clauses where a will contest is made in good faith. The Appellants also didn’t allege any changed circumstances between the time of the creation of the trust and Mr. Willey's death. The Court wasn’t persuaded that the 2014 suit couldn’t have constituted a challenge to the trust, because it was initiated during Mr. Willey's lifetime.

Judge Burke said the Court must interpret the intent of the settlor, according to provisions contained in the trust. The Court was not persuaded by the Appellants' claim that because Mr. Willey didn’t remove them as beneficiaries after the 2014 suit was filed, he must’ve intended for the in terrorem provision not to apply.

The Judge noted that the decision was governed by the “plain and ambiguous language of the in terrorem provision.” Clear language that is not open to misinterpretation, is a powerful force in the law.

The case was affirmed.

Reference: Leagle.com (March 5, 2018) “EGW v. First Fed. Sav. Bank”

Appellate Case Centers on Impact of Mediated Family Settlement Agreement on Probate Claims

Can you challenge acts that occur before a legal agreement is signed into effect? In this Texas case, a family came to terms with an estate through a mediated agreement and released each other from claims. However, one family member was not done with the matter.

A dispute between family members that resulted in a mediated family settlement agreement came before Judge John M. Bailey of the Court of Appeals of Texas, who wrote the opinion, “In the Estate of Mathis.”

Michael Mathis appealed a decision from a contested probate proceeding that was resolved by a mediated family settlement agreement and mutual release. The decedent, Richard E. Mathis, Jr., died in 2014. Appellees Richard V. Mathis and Betty Mathis filed an application to probate a will executed by the decedent. Jody Jent filed an opposition to Appellee's application to probate the 2012 will.

The parties executing the Mediated Family Settlement Agreement and Mutual Release consisted of Appellee, Jent, and Appellant. They executed the family settlement agreement in October 2015. The parties agreed that the 2012 will would be admitted to probate "without opposition in any form by [Jent] or by [Appellant]." The family settlement agreement also set out an agreed disposition of the decedent's estate. The parties agreed in the family settlement agreement to release any and all claims and causes of action between them or involving the decedent "from the beginning of time through the date of the execution of this Agreement."

Pursuant to the family settlement agreement, the trial judge admitted the 2012 will to probate and appointed Appellee as the executor of the decedent's estate.

In March of 2016, Appellant filed a petition claiming that Appellee fraudulently procured the probate of the 2012 will—the same will that was admitted to probate pursuant to the family settlement agreement. He argued that the 2012 will was invalid "because the creation of the Will was the result of a criminal conspiracy, and became fraud, conspiracy, conspiracy to defraud, perjury, fraud on the Court, Theft, passing a fraudulent document to a Government agency and other unnamed crimes."

Appellant also complained about a final report of the estate filed by the Appellee, charging him with numerous crimes, lying to the court and in his deposition, and that he had taken advantage of the decedent. Appellant also alleged several matters occurring in a guardianship proceeding involving the decedent. Appellant alleged that several other individuals conspired with Appellee in committing these acts.

Appellees responded by asserting that his claims had no legal or factual basis because the acts that he alleged, occurred prior to the execution of the family settlement agreement and that all his claims were released in the agreement.

Shortly after this, Appellant declared that he revoked the family settlement agreement "for cause."

The trial court advised Appellant that his attempt to unilaterally rescind the family settlement agreement, simply by filing a notice to rescind it, was invalid. The trial court further advised Appellant that the trial court had entered an order approving the family settlement agreement. The trial court advised the parties that it was going to grant Appellees' motion to dismiss. The trial court warned Appellant that, if he filed future motions, he could be ordered to pay attorney's fees in the future.

On appeal, Appellant claimed that the trial court ignored his motion to remove the executor. He asserts in his first issue that the trial court erred in "not filing" this motion. In presenting this issue, Appellant said the trial court erred in stating that it would not consider various motions he had filed, because they were based on the allegation that the family settlement agreement was not valid.

Judge Bailey noted that all Appellant's issues were related because they all have the same operative fact—that the family settlement agreement precluded Appellant from attempting to remove Appellee as the independent executor or suing Appellees for damages.

Appellees argued that all the alleged facts and alleged misconduct occurred prior to Appellant's execution of the family settlement agreement. They said all his claims had no basis in law, because they were released in the family settlement agreement. The Court of Appeals reviewed Appellant's petition and agreed that the facts alleged in the petition predate the execution of the family settlement agreement.

In his petition, Appellant didn’t seek the revocation of the family settlement agreement, but rather, asked for monetary damages from Appellees. Without a claim asking the trial court to revoke the settlement agreement, Appellant's petition didn’t have a basis in law. Accordingly, the trial court didn’t err in granting Appellees' motion to dismiss.

The Appellant’s attempts to remove the Appellee as the independent executor were also deemed to have been precluded by the family settlement agreement, thus resolving the Appellant’s fourth issue. The trial court’s judgment to dismiss the Appellant’s claims was affirmed.

Reference: Justia (March 15, 2018) “In the Estate of Mathis”

How a Trust Works as Part of Your Estate Plan

It’s clear that everyone needs to have a will, but the increasing use of trusts in estate planning have many people wondering how trusts fit into an estate plan.

If you learn anything about a celebrity’s wealth after they die, chances are it’s because they had a will and their estate went through probate and the will became a public document. One of the benefits of creating a trust, is that personal information about assets remains private. Estates that incorporate trusts are often settled more quickly than those without.

The New York Times recently published an article, “Life After Your Death? Here’s Why You Should Have a Trust” that explains that trusts have often been thought of a way for wealthy people to dispose of their assets.

However, some trusts can be useful for those who are not ultra wealthy. One of those is a revocable trust, which can be changed during a person’s lifetime. A properly funded revocable trust can avoid the need for probate after death.

If assets that have been titled in one name, are retitled in the name of the trust, the payment of any bills will continue without interruption in the individual’s lifetime. This can work in any situation, where financial support is given to family members.

Unlike an irrevocable trust, where assets are dispersed with more permanency, a revocable trust can be changed during the holder’s lifetime, if she decides to handle her assets differently.

If that person’s financial situation changes or if she believes that she’s made a mistake, she can close the trust and void the arrangement.

The trust is similar to a will but is more private.  It isn’t subject to outside review or approval. A will may need court approval, and every state has its own probate laws.

Think carefully before deciding who you would like to serve as a trustee. They’ll need to be a person who has knowledge about finances and is responsible enough to be trusted with the task. Remember that revocable trusts are really used for planning while you are alive, so it also needs to be someone you know you work well with.

Reference: The New York Times (March 22, 2018) “Life After Your Death? Here’s Why You Should Have a Trust”

Caring for Aging Family Members from Across the County

Planning in advance, rather than waiting until an emergency occurs, is the wisest way to go, when it comes to taking care of elderly parents, if they live far from you.

We are less likely to live around the corner from our parents or grandparents than previous generations, This distance can be a real challenge, when it comes to caring for family members facing health or aging issues.

Flagstaff Business News’ recent article, “How to Care for Loved Ones from Miles Away” reminds us that you could suddenly be faced with the challenge of long-distance caregiving.

Institutional Facilities or Care at Home. In some instances, nursing homes and retirement homes appear to be the only options available for care. However, the elderly can suffer significant emotional trauma when leaving their long-time homes and familiar surroundings. Research has shown that they do better, when they stay in their homes and familiar communities with friends and neighbors.

Finding a Home Care Agency. They offer different levels of service, so you can select an agency that offers more than basic homemaker services. Eventually, your parent may need personal care services. The agency you select should be bonded, insured, and licensed (although not all states require home care licensing). Caregivers should be experienced and vetted with at least a basic criminal background check. You should meet with the caregiver, before you agree to services. It is also important to choose an agency that complies with HIPAA.

Affording the Care Required. Since home care services are non-medical, they aren’t covered by Medicare. Home care services are generally paid individually or by long-term care insurance (LTC).

One solution to covering these costs is a reverse mortgage, which lets your parent access funds from their home equity, without disturbing their income. In addition, eligible veterans and their spouses may qualify for the Disability Pension for Aid and Attendance. That program provides funds for in-home care.

If you are still undecided on whether a loved one needs care, consider these questions to help you make a decision:

• Does your parent need help walking?
• Has his or her physical and/or emotional health been declining?
• Is he or she able to prepare nutritious daily meals?
• Can your loved one get out and shop at a store?
• Can he or she manage bills and financial responsibilities?
• Is he or she taking medications on time?
• Can your parent drive safely?
• Is he or she in need of companionship?
• Does he or she need help dressing or grooming?

Long-distance management of a parents care can be exhausting. Try to get help from other family members. If your parent is suffering from a specific illness like Alzheimer’s, ALS, or a stroke, contact the local association/support group.

An elder care attorney will be able to help you handle the legal side of long distance care and make recommendations for elder care managers, social workers and other skilled professionals, who can assist with a care plan for your loved one.

Reference: Flagstaff Business News (March 18, 2018) “How to Care for Loved Ones from Miles Away”

Why You Need to Review Your Estate Plan This Year

Even if the Trump tax law had not passed, other factors make it wise for estate plans to be reviewed this year. Putting it off, may become costly for you and your heirs.

Unless you are in the minority of people who actually pay the federal estate tax, for most people the new tax law may not have a major impact on your family. However, not all of the reasons to review your estate plan have to do with taxes. A recent article in Forbes, “7 Reasons To Revisit Your Estate Plan, Trump Tax Law Aside,” notes the reasons why a review is a smart idea.

The disposition of your assets. Even with a revocable trust in place, a will often serves as the primary means for communicating your wishes. The provisions of a will can state how assets will be transferred, which can include an outright transfer to beneficiaries; to an existing trust (inter vivos trust) or into a new trust that will be created under the provisions of the will (testamentary trust). A testamentary trust in a will can specify the ages of beneficiaries or other terms that determine when beneficiaries will receive assets. Wills also contain specific bequests of financial and nonfinancial assets, like family heirlooms. In addition, charities are often named as recipients of bequests.

Administration and financial management. When a person passes away, an estate is created. The person or institution managing the affairs of the estate is the executor or personal representative, who is tasked with the taking care of the decedent’s assets and liabilities, working with the probate courts, and disposing of the assets in accordance with the will.

Guardianship for children. If an individual has minor or disabled children, the will must designate your choice of a guardian and a successor guardian.

Trusts. Trusts give the creator some level of control over assets and their use through distributions. This can be especially important when leaving assets to those with financial issues, a person with a disability or an addiction, or a financially unsophisticated spouse. Trusts can also shield assets from divorce and the claims of creditors and predators. There are many types of trusts. An experienced estate planning attorney will be able to help you to select the right kind of trust and make sure they are set up correctly.

Other Estate Planning Documents. In addition to the will, an individual should have a health care proxy, health care directives (living will) and a general durable power of attorney over financial matters. One additional document is a letter of intentions.

Taxes. With “portability,” a vehicle that lets any unused credit from the first spouse to die pass to the surviving spouse to use, your current estate plan should be revisited. Consider state estate tax provisions that do not follow the federal tax, which could result in no federal estate taxes, but still a significant state tax.

Gifting. The ability to make lifetime gifts has also doubled. Gifting has many tax savings opportunities.  However, it can also create complications from the impact of the gifts on the recipient. Work with an attorney for any sizable gifts.

Bear in mind that you may not need a complete overhaul of your estate plan.  However, a review will provide you with a chance to make sure the estate plan still aligns with your life choices and to see if any changes, since the last time you did your will, are available to reduce your tax liabilities.

Reference: Forbes (March 15, 2018) “7 Reasons To Revisit Your Estate Plan, Trump Tax Law Aside”

What is the Impact of the New Tax Law on Special Needs Families?

To help a child with a disability, families who have a 529 college savings plan are now permitted to roll those funds into an ABLE account.

A recent article appearing in Kiplinger, “How to Use College Savings to Benefit Children with Special Needs,” explains that the new tax law now permits money from a 529 to be rolled into an ABLE (Achieve a Better Life Experience) account for children with special needs.

This year, a person can roll over up to $15,000, which includes any rollovers and new contributions to the ABLE account.  However, if you’ve already put some money into a child’s ABLE account in 2018, the contributions will decrease the amount you can roll over this year.

To transfer a larger balance from a 529 to an ABLE, you can spread your rollovers over several years. You can also roll over the money from any state’s 529 into any other state’s ABLE. However, you can only have an ABLE in one state at a time. A rollover is only allowed if the ABLE account beneficiary is the same as the 529 beneficiary or a “family member” of the 529 beneficiary. The “family member” definition is a bit different for 529s and for ABLEs, and the states are working on the details.

In fact, because the rollover provision is so new, many states don’t yet have forms to make the transfer automatically.

Moving money from a 529 to an ABLE can be very helpful for families that started saving for a child’s college in a 529, but aren’t sure if the child will go to college because of a disability. By rolling over money from the 529 to the ABLE, a family can use it tax-free at any time for a wide range of qualified expenses to help a child with special needs maintain or improve his health, independence and quality of life. These expenses include education, housing, transportation, living expenses, employment training, assistive technology, legal fees and personal support services.

The money in the account also doesn’t affect eligibility for most government disability benefits, and up to $100,000 doesn’t count toward the $2,000 asset limit for Supplemental Security Income Benefits.

To qualify for an ABLE account, beneficiaries can be any age, provided they developed a qualifying disability before age 26. They also must meet the disability requirements of either Supplemental Security Income or Social Security Disability Insurance. They’re automatically eligible, if they started receiving those benefits before age 26. Alternatively, they must submit a “disability certification” from a physician confirming that they meet the functional disability criteria.

The choices for ABLE accounts have grown to include 30 states and the District of Columbia. Plans are open to people who live in any state, although some give tax deductions if you contribute to your own state’s guidelines. Before you open an account, make sure to do the necessary research: compare the required initial contribution, fees and investment options.

Reference: Kiplinger (January 30, 2018) “How to Use College Savings to Benefit Children with Special Needs”