State savings account helps parents prepare son with autism for future
Account holders can choose from various investment options, and savings grow tax-free.
With a child diagnosed with autism and a serious interest in personal financial planning, Larry Angeli was immediately intrigued by the thought of opening a MiABLE account to benefit his son, Anthony.
“When the ABLE [Achieving a Better Life Experience] Act was passed on the national level, I thought it sounded good, and I really paid attention to it,” said Angeli, who lives in Farmington Hills with his wife, Alice, and Anthony, 22, their only child.
So, in July 2017, shortly after Michigan lawmakers established the state-level ABLE program and assigned the Department of Treasury to administer it, the Angelis were among the first state residents to open a MiABLE account.
Now, the tax-advantaged savings vehicle is a central part of their efforts to ensure Anthony has the brightest future possible.
“The financial component is only part of the whole approach you take as a parent, but it’s important and something that you have to plan for,” Angeli said.
Angeli fully appreciates MiABLE’s benefits and flexibility — including not having to worry about Anthony losing his monthly Supplemental Security Income — and the wide array of expenses the account can cover.
Unlike many other forms of savings, MiABLE doesn’t affect eligibility for SSI and other government assistance — provided the account balance doesn’t exceed $100,000. Typically, individuals with disabilities can’t have more than $2,000 in assets in order to receive public benefits.
Anthony’s situation illustrates the restrictiveness of that policy. After he pays his parents for room and board, and uses the balance for medical expenses, he has little to no money at the end of the month.
Addressing a ‘fundamental unfairness’
The Angelis are funding Anthony’s MiABLE account by rolling over proceeds that they accumulated in a New Hampshire 529 college savings account. They opened the account when Anthony was 1 and continued to make monthly contributions after he was diagnosed with autism at age 2 1/2.
“You always have the best of hopes for your children,” Angeli said. “I’m glad we did what we did.”
But now that it’s likely Anthony won’t have a traditional college experience, the Angelis are rolling over their 529 savings into the more flexible MiABLE account in yearly increments of $15,000 — the maximum annual contribution allowed.
“ABLE helped address a fundamental unfairness in the system: You could save on a tax-free basis for college but not for a disabled child’s needs,” Angeli explained. “Now Anthony can save for the future without jeopardizing future government benefits. It’s a win-win for everybody.”
Angeli’s parents also invested in a 529 plan to benefit Anthony, and Angeli figures it will make financial sense for them to eventually transfer the funds to his MiABLE account, highlighting another MiABLE feature — the ability of friends, family members and others to contribute to an account. “We’re going to let all of our family members know that,” Angeli said.
MiABLE account holders can choose from various investment options, ranging from conservative to aggressive, in which their savings grow tax-free. In addition, they can receive a Michigan tax deduction on their contributions, and withdrawals are also not taxed if used for qualified expenses.
Because they are focusing on building the MiABLE account’s balance, the Angelis have yet to withdraw funds.
“But so far, it appears to operate exactly like the 529, with the only difference being that it can be used for more than just college expenses,” said Angeli, who works in the software field and considers financial planning a hobby.
Qualified MiABLE expenses include those related to education, housing, transportation, employment training and support; assistive technology and personal support services; health, prevention and wellness; financial management; quality-of-life improvements; legal fees; and funeral or burial expenses.
Part of a broader plan
Anthony is considered a higher-functioning person with autism. He’s verbal and has a sense of humor. He also has hobbies and skills that allow him to work with supports — and eventually without them, Angeli said. For example, through a transition program administered by Farmington Public Schools, he has a part-time job at a local Pizza Hut restaurant, performing tasks such as folding boxes and cleaning.
His parents hope he can eventually live independently, and he’ll continue attending Farmington Public Schools special education classes for another year or two with that goal in mind, his father said.
“Then we’ll be thinking about what’s next,” he said.
Whatever Anthony’s future holds, the Angelis are committed to ensuring financial worries aren’t part of it.
Anthony’s MiABLE account will complement, not replace, the special needs trust his parents established on his behalf. The trust will help them transfer assets to Anthony when they die, without — just like MiABLE — affecting his government benefits.
“I view the special needs trust as a far-into-the-future vehicle, whereas the MiABLE account is more for the here and now and for expenses Anthony may incur in the near term,” Angeli said. “The debit card available with MiABLE will make it easy to access these funds when he needs them.”
Also, a MiABLE account is simple to set up on your own, whereas establishing a special needs trust requires attorney assistance, he said.
Beyond opening one of the first MiABLE accounts, Angeli is an ABLE pioneer in other ways. He is serving as an adviser to the ABLE National Resource Center. “It’s been a great experience,” Angeli said, adding that taking the volunteer position is part of his commitment to get more involved in the autism community.
As part of his adviser role, he is beta-testing a phone app that will allow account holders to enter and document ABLE account expenses and photograph receipts. The app will also provide access to important resources on the web about ABLE accounts.
To find out if you or your family member is eligible for a MiABLE account, visit miable.org/qualification.php.
Members of the editorial and news staff of The Detroit News were not involved in the creation of this content.