'Win-win': MiABLE helps son prepare for future, ease parents' concerns
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 Better Life Experience) Act was passed on the national level, I thought it sounded good and I really paid attention to it," said Larry, 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 became 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," Larry said.
Larry 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 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 2½.
"You always have the best of hopes for your children," Larry 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," Larry explains. "Now Anthony can save for the future without jeopardizing future government benefits. It's a win-win for everybody."
Larry's parents also invested in a 529 plan to benefit Anthony, and Larry 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," Larry 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 Larry, 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, hobbies and skills that allow him to work initially with supports and eventually without them, Larry 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," Larry 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, Larry 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," said Larry, 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 application that will allow account holders to enter and document ABLE account expenses and photograph receipts. The application will also provide access to important resources on the web about ABLE accounts.
MiABLE helps son maintain independence
Years ago, Dianne Haas created a vision statement for how she hoped the life of her intellectually disabled son might unfold.
Part of it read: "My vision is that my son will be a contributing member of society who is able to live independently or semi-independently, be able to navigate his community, be employable, and be surrounded by a loving circle of family and friends."
So far, so good in that regard – and the MiABLE account Dianne opened on son Nick's behalf will help ensure he maintains his independent lifestyle, she said.
Nick, 49, lives with a roommate in Novi, is able to indulge his passion for sports through Special Olympics participation and drives part of the way to his job at U.S. Army Garrison-Detroit Arsenal in Warren.
"I have advocated very hard for him and worked very hard with him to make sure he can be all he can be," Dianne said. "Now he just kind of goes about his life like anybody would."
Nick has already put proceeds from the MiABLE account that was opened in 2017 to good use – replacing the roof on his manufactured home, which was built in 1997 and he has lived in since 2007.
Housing is one of the wide array of expenses MiABLE accounts can cover. Others include education, 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.
It was that type of flexibility and more that led Dianne to open Nick's MiABLE account.
She still remembers when she first started hearing about the creation of the MiABLE program. "My initial thought was that this sounds a little too good to be true," she said. But when she called MiABLE at 844-656-7225 to learn more, she discovered that what she'd been told was indeed factual.
Like many parents of disabled children, Dianne had long struggled with the challenge of planning for Nick's future while not jeopardizing his federal benefits – in Nick's case, monthly Social Security Disability Income payments.
MiABLE allows disabled people to circumvent the limitation of having no more than $2,000 in assets to retain eligibility for government assistance. Provided their account balance doesn't exceed $100,000, MiABLE beneficiaries still qualify for SSDI and other benefits.
"Having a resource such as MiABLE is valuable for those families who wish to secure the future of their loved one with special needs without jeopardizing support structures and services that are in place in the here and now," said Dianne, a retired nurse who now lives in Ann Arbor.
"I don't know who thought to create that law, but it's brilliant. I just wish it was more widely understood and parents were made aware of it early in their children's lives."
Nick, who was diagnosed as a child as "educable mentally impaired," lives independently with another disabled man. To get to his job, he drives 15 miles from Novi to Southfield, where he hops into a JVS Human Services van that takes him the rest of the way to Detroit Arsenal, where he performs housekeeping and light maintenance work.
During his off hours, Nick enjoys competing in bowling, softball, basketball and floor hockey through Special Olympics.
While his job helps give him a sense of purpose and a steady income, it won't allow him to accumulate retirement savings. MiABLE will help fill that void, as well as provide a source of emergency cash, Dianne said.
"Anything that can help him stay independent, I'm all for," she said. "For many individuals with special needs, the MiABLE program offers a resource to help ensure a higher quality of life, long-term stability and possible economic security after their parents are gone."
MiABLE part of man's independence plan
Aaron Martinuzzi was on his way to becoming a doctor when a freak diving accident during medical school changed his path in life.
Now, a MiABLE account is helping to ensure he stays on the road to independence.
"I think it's a wonderful thing," said the Livonia resident, 32, who opened a MiABLE account in February 2017, a few months after the program was launched within the Michigan Department of Treasury. "MiABLE will help me maintain my independence."
Aaron took another significant step toward sustaining his self-sufficiency in October 2018, when he landed a full-time job at the Thomson Reuters office in Ann Arbor, where he's a tax analyst assisting with the development of UltraTax tax-preparation software.
His MiABLE account will complement his steady income by providing a tax-advantaged way to accumulate a contingency fund for various expenses, he said. For example, Aaron said, his MiABLE savings could go toward paying home health aides or purchasing such needs as a car or adjustable bed. It will also serve as a source of long-term savings.
Indeed, the wide array of ways to use account proceeds is a key MiABLE feature, Aaron said. Qualified 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.
The program also offers tax advantages. For example, any earnings from MiABLE's various investment options are free from taxes, as are withdrawals applied toward qualified expenses. Also, starting in 2018, people who work and save some of their income in a MiABLE account may get a federal Saver's Credit, cutting the amount they pay in taxes.
'A healthy brain'
In 2010, while a student at the University of New England College of Osteopathic Medicine in Maine, Aaron was at a party when he dived into a pool and landed headfirst on the bottom.
He suffered a spinal cord injury that left him mostly paralyzed from the upper chest down, with just partial use of his right arm. "It was just bad luck," he said.
He soon moved back in with his parents in his native Redford, where he underwent physical therapy and began contemplating his future.
In the meantime, his mom put her CPA training and comfort with poring through forms and documents to use and began navigating the realm of government assistance available to people with disabilities.
One important bit of information Aaron quickly discovered: Typically, individuals with disabilities can't have more than $2,000 in assets to receive public benefits, such as Social Security Disability Income, Supplemental Security Income or home help assistance through Michigan's Home Help Program.
That was before MiABLE was an option. Unlike other forms of savings, MiABLE doesn't affect eligibility for government assistance, provided account balances don't exceed $100,000.
To stay under the $2,000 asset limit, Aaron had to liquidate his Roth individual retirement account, which he had taken pride in establishing at a young age.
"There was a stretch of time when the $2,000 limit complicated managing my finances, while I was still figuring things out," he said.
During that period, Aaron worked on a limited basis – as a tutor and receptionist for Kaplan Test Prep and completing individual tax returns and other projects at LMR & Associates, a CPA firm in Livonia where his mom manages the tax department.
But he was also careful not to exceed the income and asset limits that would disqualify him for government benefits.
Then he started thinking harder about his time ahead.
"I had no idea where things were headed for the long term," said Aaron, who earned a bachelor's degree from the University of Notre Dame and a master's from Colorado State University. "I just knew that I was young with a healthy brain."
Yearning to earn
Eventually, he decided it was time to fully engage that brain in the workforce.
I could have continued to rely on my mom and dad, but they won't be able to assist me forever," said Aaron, who now lives with his parents in an accessibly designed house in Livonia. "I had to figure out how to take care of myself. The more you get people to take care of the little things for you, the more overwhelming they're going to be down the road."
While the income from his full-time job will mean the loss of government assistance, Aaron figures he's still coming out ahead financially – especially when accounting for his MiABLE account.
MiABLE allows account holders to save up to $27,060 each year. Of that, $15,000 can come from any source, including family and friends. And those with a job can save an additional $12,060 in earned income.
It's that type of flexibility that will make MiABLE a key part of planning for his future, Aaron said.
"Just living with a disability, on a daily basis I already have to be concerned about a lot of extra, atypical things to start the morning," he said. "Anything that simplifies planning for the future is appreciated."