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MiABLE: Michigan’s Program for Individuals with Disabilities

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In a world striving for inclusivity and equal opportunity, Michigan has MiABLE—a program designed to support individuals with disabilities in achieving financial security and independence.

What is MiABLE?

MiABLE stands for the Michigan Achieving a Better Life Experience program. It was established in response to the federal ABLE Act of 2014, which allows states to create tax-advantaged savings accounts for individuals with disabilities. These accounts enable eligible individuals to save and invest money without jeopardizing their eligibility for crucial government benefits, such as Medicaid and Supplemental Security Income (SSI).

Key Features of MiABLE Accounts

  1. Tax Advantages:
  • Tax-Free Earnings: The earnings on contributions to MiABLE accounts grow tax-free, similar to a Roth IRA. Withdrawals used for qualified disability expenses are also tax-free.
  • State Tax Deduction: Contributions to MiABLE accounts are deductible on Michigan state taxes. Michigan state income taxpayers can claim up to a $5,000 deduction for single filers and $10,000 for joint filers for MiABLE contributions.
  • Protection of Benefits:
  • Funds in MiABLE accounts do not count as assets when determining eligibility for federal benefits programs like Medicaid and SSI, up to $100,000.
  • Flexible Use of Funds:
  • The money in a MiABLE account can be used for a wide range of qualified disability expenses, including education, housing, transportation, employment training, assistive technology, health care, financial management, and more.
  • Contribution Limits:
  • Individuals can contribute up to $18,000 in 2024, subject to periodic adjustment for inflation. Additionally, working individuals with disabilities can contribute $12,060 in 2024 beyond this annual limit if they have earned income. A MiABLE account is considered a 529 account by the IRS, and the maximum contribution limit for all Michigan 529 plans combined for a designated beneficiary is $500,000.
  • Easy Management:
  • MiABLE accounts are designed to be user-friendly, with straightforward online management options, making it easier for individuals and their families to track and utilize their savings.
  • Family/Friends Contributions
  • Ugift® is a feature of your ABLE account that allows friends and family to contribute to your savings in lieu of traditional gifts. It’s simple to use – just log in to your account to find your code and share it with friends and family, who can use it at UgiftABLE.com to contribute directly into your account. 

Eligibility Criteria

To open a MiABLE account, an individual must:

  • Have a qualifying disability that was present before the age of 26 (Changes to age 46 on January 1, 2026).
  • Be entitled to benefits based on blindness or disability under the Social Security Act, or have a similarly severe disability documented by a physician.

Why MiABLE Matters

The introduction of MiABLE is a game-changer for many Michigan residents. Historically, individuals with disabilities faced strict asset limits to maintain eligibility for critical public benefits. This created a paradox where saving for the future could lead to the loss of necessary support. MiABLE breaks this cycle, offering a safe and effective way for individuals to build financial security.

Real-Life Impact

Consider Sarah, a young woman with cerebral palsy. Before MiABLE, Sarah’s parents were wary of saving money in her name, fearing it would disqualify her from Medicaid. Now, Sarah has a MiABLE account where her family contributes regularly. This account is being used to cover her specialized therapies and to save for a modified vehicle, enhancing her independence and quality of life.

How to Get Started

Opening a MiABLE account is a straightforward process. Interested individuals or their guardians can visit the MiABLE website, where they can find detailed information, application forms, and guidance on how to manage their accounts effectively.

Conclusion

MiABLE represents a significant step toward financial empowerment for individuals with disabilities in Michigan. By providing a safe, tax-advantaged way to save, it opens up new possibilities for independence and improved quality of life. For individuals with disabilities and their families, MiABLE is more than just a financial tool; it’s a gateway to a more secure and fulfilling future.

For more information, visit the official MiABLE website and take the first step toward financial independence today.

Navigating Special Needs Trusts: A Guide to Understanding the Different Types

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Special Needs Trusts (SNTs) play a crucial role in ensuring the financial security and well-being of individuals with disabilities. These trusts are designed to manage assets and provide for the needs of individuals with disabilities while preserving their eligibility for government benefits such as Medicaid and Supplemental Security Income (SSI). Understanding the different types of Special Needs Trusts is essential for families and caregivers to make informed decisions about their loved one’s future financial planning. In this blog post, we’ll explore the various types of Special Needs Trusts and their unique features.

1. First-Party Special Needs Trust:

   – Also known as a “Self-Settled” or “D(4)(A)” Trust, this type of SNT is funded with the beneficiary’s own assets, typically through an inheritance, personal injury settlement, or other windfall.

   – It allows individuals with disabilities to protect their assets while maintaining eligibility for means-tested government benefits.

   – Upon the beneficiary’s death, any remaining funds in the trust must be used to reimburse Medicaid for expenses incurred during the beneficiary’s lifetime.

2. Third-Party Special Needs Trust:

   – This trust is established by a third party, such as a parent, grandparent, or other relative, using their assets for the benefit of a person with a disability.

   – Unlike a First-Party Trust, a Third-Party Trust does not require Medicaid payback provisions, allowing the remaining assets to pass to other beneficiaries or charities upon the beneficiary’s death.

   – Third-Party SNTs provide greater flexibility in estate planning and asset distribution.

3. Pooled Special Needs Trust:

   – Pooled Trusts are managed by nonprofit organizations that pool the assets of multiple beneficiaries for investment purposes while maintaining separate subaccounts for each beneficiary.

   – This option is beneficial for individuals with smaller amounts of assets or those without a suitable trustee to manage a standalone trust.

   – Pooled trusts offer professional management and oversight, often at a lower cost than individual trusts.

4. ABLE Accounts:

   – Achieving a Better Life Experience (ABLE) accounts are tax-advantaged savings accounts designed to help individuals with disabilities and their families save for disability-related expenses.

   – While not technically a trust, ABLE accounts function similarly by allowing individuals with disabilities to maintain eligibility for means-tested benefits while saving for qualified expenses such as education, housing, and healthcare.

   – Contributions to ABLE accounts are made with after-tax dollars, and earnings grow tax-free if used for qualified expenses.

Conclusion:

Special Needs Trusts are invaluable tools for safeguarding the financial future of individuals with disabilities. By understanding the different types of SNTs available, families and caregivers can make informed decisions that meet the unique needs of their loved ones while preserving their eligibility for essential government benefits.

Understanding Why a Will Doesn’t Avoid Probate

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In the realm of estate planning, a Last Will and Testament, commonly known as a Will, is often seen as the cornerstone document. It’s where individuals outline their final wishes regarding asset distribution, guardianship of minors, and even pet care. However, there’s a common misconception that having a Will in place means your assets won’t have to go through probate. Let’s unravel this misunderstanding and explore what probate entails and why a Will doesn’t always bypass it.

What is Probate?

Probate is the legal process that takes place after someone dies. Its primary purpose is to ensure that the deceased person’s debts are paid and their assets are distributed according to their wishes, as outlined in their Will, or state law if there is no Will. Probate involves various steps, including validating the Will, appointing a personal representative, identifying and inventorying the deceased person’s assets, paying debts and taxes, and distributing the remaining assets to beneficiaries.

Assets Subject to Probate

Contrary to popular belief, not all assets are subject to probate. Assets that are solely owned by the deceased and do not have a designated beneficiary or joint owner typically go through probate. This includes real estate, bank accounts, investments, vehicles, and personal belongings.

Why a Will Doesn’t Avoid Probate

A common misconception is that having a Will in place means your assets will automatically avoid probate. However, a Will is merely a roadmap for the probate court. Before your assets can be distributed according to your Will, the court must validate the document and oversee the probate process. This means that even if you have a Will, your estate may still go through probate, which can be time-consuming, expensive, and subject to public scrutiny.

Strategies to Minimize Probate

While a Will is an essential component of an estate plan, there are strategies you can use to minimize the impact of probate:

  1. Non-Probate Transfer Mechanisms: Utilize methods such as beneficiary designations, joint ownership with rights of survivorship, and payable-on-death accounts to transfer assets directly to beneficiaries outside of probate.
  2. Revocable Living Trust: Establish a Revocable Living Trust and transfer your assets into the Trust during your lifetime. Assets held in the Trust are not subject to probate and can be distributed according to your instructions, providing privacy and avoiding the probate process altogether.

In Conclusion

While a Will is a critical document for expressing your final wishes, it does not necessarily avoid probate. Understanding the probate process and exploring alternative estate planning strategies can help you minimize the impact of probate on your estate and ensure a smoother transition of your assets to your loved ones. 

Avoid These Top Estate Planning Mistakes

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A good estate plan protects and provides for the decedent’s heirs. It shouldn’t cause more problems than it solves. But not every estate plan lives up to this ideal. If you want your wishes carried out, below are the top mistakes you need to avoid.

  • Failing to plan. If you don’t make time to create a thorough estate plan, you’re 
  • risking the financial future of your estate, your legacy and your loved ones.
  • Not reviewing your documents to make sure they’re not out of date.
  • Not discussing your plans with family and friends. Even a brief conversation with your beneficiaries can tell you which of your wishes are likely to be controversial, giving you a chance to rethink.
  • Naming just one beneficiary. In case your only heir dies before you do, you’ll want to have a contingent beneficiary.
  • Forgetting that your retirement plan accounts or life insurance can’t be included in wills or trusts. You’ll need a beneficiary designation form or to name a revocable trust as the beneficiary.
  • Forgetting about power of attorney or health care representatives. These folks step in to make decisions if you become incapacitated. In most cases, the roles dissolve on your death.
  • Not delineating what your final arrangements will be. Not giving some indication of what you’d like to happen at your funeral or with your burial arrangements puts an extra burden on your family when they’re grieving. Let them know what they can do to honor you.
  • Failing to include your digital assets. You should include a digital estate plan that lays out how you’d like all your digital assets — social media accounts, online banking and email — handled after you die, and name a digital executor to ensure your digital assets are handled properly.
  • Not detailing what charities you want to allocate some assets to. It’s important to provide for your heirs but also to provide for other causes. That’s why you may want to name a charity as a beneficiary with the proceeds from an investment or a life insurance policy.
  • Not planning for all contingencies. Wills often leave an estate to the testator’s “surviving children,” but that raises questions if one of the testator’s children dies. Does the money go to that child’s heirs or is it split among the survivors? Morbid as it may seem, wills should plan for all those possibilities.
  • Failing to fund your trust. Creating a trust is only half the battle. A trust is useless unless it’s funded with your assets.
  • Forgetting about taxes. You should know whether the state that you and your beneficiaries live in has a state estate tax or inheritance tax. Understand the limits before you write your will or trust.
  • Failing to store your estate plan properly. A perfect estate plan is useless if no one knows where to find it. Safes and safety deposit boxes are popular options, but remember to tell someone that it’s there and how to access it.

Go with qualified professionals.

There are many myths and misconceptions about estate planning. Help your family save thousands of dollars in unnecessary taxes and probate fees by sidestepping errors. By including an estate planning attorney and other professionals, you’ll have help in drafting your plan and making any changes you want to make.

Should You Have Joint Trustees?

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Listen to “Should You Have Joint Trustees? (Episode #218)” on Spreaker.

Are you considering appointing multiple children to be in charge of settling your estate? If so, then today’s episode is for you. Tom discusses the pros and cons of having multiple children serve as your trustees or agents under powers of attorney. And, he explains the difference between appointing them as joint-trustees or co-trustees.

Audio Transcript:

Should you have joint trustees? When you’re putting together your trust, if that’s what you’re going to have as part of your estate plan, you’re looking at naming successor trustees. Who it that’s going to settle your trust after your death? Of course, we’re also talking about, who’s going to be the personal representative under your wills? Who’s going to be agents under your financial power of attorney? Who’s going to be agents under your healthcare power of attorney? Who’s going to be appointment to make funeral arrangements for you? So we’re looking at naming these different individuals, and, oftentimes, clients who have children are going to ask, whether it is better to appoint one child or perhaps multiple children as a joint trustees or as joint agents or personal representatives, et cetera.

So where do we start? Well, we’re going to start with the first question. If you’re considering appointing multiple children, the first question is how well do your children that you’re looking at appointing get along? If, for example, there’s already discord in the family, then having multiple children serving can get ugly very quickly because now you’re taking children who don’t already get along and you’re forcing them to work together.

From experience, that does not improve the chances that they will get along. In fact, just the opposite. They will fight even more than they are already did when you were alive when you’re calling upon them to work together, to settle that estate after your death. And, obviously, if that leads to fights between the children, it can increase, certainly the legal expenses that are going to be incurred in settling your estate.

So if, your goal is, as most clients, to maintain family harmony after your death, in that case, then appointing multiple children who already don’t get along is not going to accomplish that goal.

On the other hand, If your goal is to maximize family disharmony, then appointing multiple children who do not get along will accomplish that. We did have one client where that was part of his estate planning goal. He wanted his children to fight tooth and nail after his death because he thought they didn’t treat him well enough during his lifetime. That was his way of giving them their comeuppance after his death.

Now something else to think about. You might be considering appointing multiple children as your agents, under powers of attorney. It could be your financial power of attorney or your healthcare power of attorney. If you think about that, now you’re appointing children who will be called upon to act on your behalf while you’re still alive. You’re still alive, but you’re incapacitated. Someone needs to make medical decisions for you. Someone needs to manage your finances. It can certainly really be bad for you if the children don’t all get along.

If you’re confident they will continue to get along after your death, then having children, perhaps as joint trustees or as joint personal representatives or joint agents might be appropriate for you.

The next question though, you will have to decide, is do you want them to serve as joint, co, because you’ll have those options? What’s the difference? If you have two or more children serving as for example, co-trustees then any one of them can take any action that needs to be taken by a trustee without the involvement or agreement of the others. That’s the concept of co, they’re all equal. They all can do whatever needs to be done independently of the others. Joint, on the other hand, means that any action that needs to be taken has to be taken by all of them together.

Let me give you an example. Let’s say you have real estate and the real estate has to be sold after your death. If you have children as co-trustees in charge of your trust, then any one of the co-trustees can execute documents necessary to complete the sale. On the other hand, if you have them as joint trustees, then they all would have to sign the documents, including all the documents that are required at the closing.

Your decision between co-trustees and joint trustees could be impacted by where your children are living. If there’s a considerable distance between them, then co-trustees might be more appropriate because it might be more difficult for joint trustees to have to travel and get together to take action in settling your estate.

Of course, though, if you want them to all oversee what each other is and make sure everyone is doing the right thing, then you might want to consider appointing them as joint trustees.

So you have to make some decisions. If you’re going to have more than one, are they going to serve as joint, or are they going to serve as co.

The same considerations are going to apply if you’re going to have multiple children serve as personal representatives, as agents under your durable power of attorney, as agents under your power of attorney for your healthcare, etc. You can have them joint, or you can have them co.

Now, when don’t we recommend joint agents? We don’t recommend joint agents under your power of attorney for health care. Why? Let’s think that one through. Here’s the problem. You need medical treatment. You need medical decisions made for you in your not able to make the decisions for yourself. So your doctor is going to look at your power of attorney for healthcare and decide who does he or she needs to talk to. Well, if you have named multiple children as joint agents, then your doctor is going to need to talk to all of the joint agents and get their agreement before rendering treatment. Why? Because they’re all joint. That’s what you’ve said to the doctor. I want you to work with all of my children. They all need to agree on what my treatment is.

Well, you don’t really want to find yourself in the emergency room where quick decisions need to be made for your treatment, but they’re not able to make them because the doctor’s unable to contact all of the agents wherever they happen to be. Or they’re not able to get all of the agents to agree as to a course of treatment.
That is why we don’t recommend joint agents under a health care power of attorney. If you’re going to have multiple children under your health care power of attorney, it is much better then to have them as co agents so that they all have equal decision-making authority. So the doctor can talk to whoever is available.

Remember, whatever you decide about multiple children, whether they’re going to be joint or whether they’re going to be co, you need to make sure that your documents are clear as to whether or not multiple fiduciaries are joint and have to work together, or are co with the ability of any one of them to work without others. Why? Here’s what we find frequently. Banks will treat multiple fiduciaries or multiple agents as joint, unless the documents clearly indicate that they have authority to act independently.

So let’s say you just had that power of attorney prepared and it says I appoint Bob and Sue and Johnny as my agents. Well, most banks are going to interpret that as appointing them as joint, meaning they all have to participate in any action with the bank. So if you want them to be co where any one of them can do that, that needs to be clear in the document so that the bank will recognize in that case that they can work with any one of the children.

Why You Might Need a New Certificate of Trust

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[Order your new Certificate of Trust today at our [Legal Store]

What is a certificate of trust? Well there have been two different distinct certificates of trust up until a recent change in Michigan Law that combined them into one. For those of you that have had a trust prepared for them, you would normally also have a document called a certificate of trust, and that certificate of trust summarized some of the important information from your trust such as the date it was created, who the trustees are, who the successor trustees are, the name of the trust et cetera? And, the purpose of that certificate of trust was to be used for funding your trust. So when you went to the bank and you said hey I want to put the Trust on as a beneficiary on my account, the bank would require a certificate of trust, which was a summary of the trust information, and that was done in lieu of providing the bank with an actual copy of your trust document.

So that was one type of certificate of trust. It’s a certificate of trust that generally speaking we recommended everybody that had a trust prepared for them had a corresponding certificate of trust. 

The other certificate of trust was actually called a certificate of trust existence and that was a document that a title company would require to be prepared and recorded at the time a trust was selling real estate. So if you had transferred your home into your trust, and you were then going to sell your home one day or the trust was going to sell your home, the title company would require a certificate of trust existence.  And there was a specific Michigan Statute that said here’s what that certificate of trust existence has to contain.

Stepping back, that certificate of trust that you had just as part of your estate plan, there was no statute that said what that had to contain. The certificate of trust existence, though, that had been required by title companies to be recorded when a trust wanted to sell real estate, had very specific requirements under the statute.

So they were two separate documents and serve two different purposes. You would generally find that a title company when it came time to sell real estate would require that new certificate of trust existence. 

Well, Michigan decided to simplify matters and to, by way of legislation, develop one certificate of trust that now is used for both purposes. One certificate of trust that you can use when you are funding your trust, and the same certificate of trust that a title company will now require when it comes time to sell real estate. So, the new statute combines them both into one and calls that one document a certificate of trust.

The statute sets out a number of requirements that a certificate of trust now has to contain. Those include: 

  • the name and date of the trust
  • the date of each what is called operative Trust instrument, which is any amendment that would have been made to the trust
  • not just the name, but the address of the current trustees.
  • the power of the trustee as it relates to the purpose for which the certificate of trust is being offered. So for example, if you were going to use this new certificate of trust at a bank, the certificate of trust would have contained the powers of the trustee relative to banking. If the certificate of trust is going to be used sed by Title Company when it comes time to sell real estate, it will have to include the powers of the trustee relative to selling real estate. What we’ve opted to do is to include all of the powers that a trustee has under Michigan law so you can use one certificate of trust for all purposes that a trustee has authority to perform under Michigan law. 
  • whether or not it is revocable, and if revocable, indicate the name of the person who can revoke it.
  • if you have co-trustees, then the certificate of trust has to indicate whether or not anyone of the co-trustees can operate and make decisions as a trustee without the other co-trustees. 
  • And finally, if it is going to concern real estate, then it has to contain a legal description of the real estate to which it applies. 

Now why is it then that perhaps you might need a new certificate of trust? 

Well here’s what is happening. What we have found from discussing with clients and contact with different Financial establishments, and this is this is kind of the way that the world of banking and the world of credit unions works. When a change in the law occurs there will be a law firm that is Corporate counsel for the bank or the credit union. And part of the job of that law firm is to keep the bank current, keep the credit union current, about changes in the law relative to them and their customers. So what happens in a situation like this is that law firm will normally put together some sort of a document sending it off to the bank or the credit union, and in this case advising them of the change in the law requiring certificates of trust. What normally then happens is not do they just advise them about the change, but they will often times create a checklist if you will, and the checklist probably says something like look in order for you the bank or the credit union to accept a certificate of trust from your customer regarding a trust that they have that is somehow now going to be related to their bank account, these are the things that have to be in that certificate of trust. That’s to make it uniform throughout the bank and the credit union, and to make it easy on the tellers. They don’t have to know the statute. They don’t have to know what changes. They just have pull out a form that says, okay, here’s what a certificate of trust requires. And what they normally do then is they go through that checklist and if everything on that checklist is there then they’ll accept the certificate of trust. If something on that checklist isn’t there, then in all probability, they will say no we cannot accept that certificate of trust, which means you cannot then make the trust the beneficiary on your bank account or credit union account or put the account in the name of the trust until you come back with an appropriate certificate of trust. 

So when that happens, and we had that happen with a client recently, we were not provided with a copy of the checklist, but it was pretty clear what was going on when they went through the checklist. They looked and said hey the certificate of trust that had been prepared in that case years ago years ago when the trust was first created, and years ago when it was first used for funding at that bank, when the client went back to the bank to do something else related to the account the teller and the manager looked at that new checklist and said, hey, we need a new updated certificate of trust that is in compliance with Michigan law.

So, it didn’t void out the certificate of trust that was prepared years ago on behalf of the client. They simply refuse to do what the client asked them to do relative to the bank account without an updated certificate of trust. That is why you might well need a new certificate of trust. It’s not because your old one is no good anymore. It’s because of the financial institutions and what they are now doing relative to this change in Michigan law.

Order your new Certificate of Trust today at our Legal Store.

The foregoing is an excerpt from the June 25, 2019 Tuesday with Tom episode “Why You Might Need a New Certificate of Trust”