Released on: June 20, 2019
Surrogate ReillyMatter of L.J.A., (16-388351/A) — Before the court is a petition by A.B.D. and K.A.A.(petitioners), to establish a 529A account, commonly referred to as an ABLE account, for their daughter, L.J.A., a developmentally disabled adult. The petitioners are the co-guardians of L.J .A.’s person and property. The petition also seeks an order lifting the restraints on their letters of guardianship and authorization to deposit L.J.A. ‘s income from a paid internship into the 529A account.Internal Revenue Code 529A (26 USC 529A) allows for the establishment of tax advantaged savings accounts for individuals with disabilities and their families pursuant to programs “established and maintained by a State, or agency or instrumentality thereof’ (26 USC 529A [b][l]). New York enacted the New York Able Act, also called “New York achieving a better life experience (NY ABLE) savings account act” effective April 1, 2016 (Mental Hygiene Law 84.01 ). The legislative intent is “to encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with developmental disabilities to maintain health, independence and quality of life; and to provide secure funding for disability related expenses on behalf of designated beneficiaries with intellectual or developmental disabilities that will supplement, but not supplant, benefits provided through existing sources” (L. 2015, ch. 576, § 2). The account may be established for an individual who is blind or “has a medically determinable physical or mental impairment, which results in marked and severe functional limitations” and such “blindness or disability occurred before the date on which the individual attained the age 26″ (26 USC 529A [e][2][A][i][I] and [II]). The account may be used to pay for qualified disability expenses which include “education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses” (26 USC 529A [e][5]). The aggregate amount that may be contributed to the account annually cannot exceed the annual gift tax exclusion (26 USC 529A [b][2][B][I]) plus, in the case of a contribution by the beneficiary, the lesser of the compensation included in the beneficiary’s gross income for the taxable year or an amount equal to the poverty line for a one-person household (26 USC 529A [b][2][B][ii][I] and [II]). The account must be subject to repayment to the State upon the death of the beneficiary of all amounts in the account remaining, “not in excess of the amount equal to the total medical assistance paid” (26 USC 529A [f]). The account will not jeopardize the individual’s entitlement to SSI or Medicaid as long as the account does not exceed $100,000.00 and the maximum annual contribution is not exceeded (New York State Office of the State Comptroller, http://www.osc.state.ny.us/savings/able [last accessed May 15, 2019]).The petitioners allege that L.J.A. is participating in a paid internship through the Office for Persons with Developmental Disabilities (OPWDD). Through this program, L.J.A. will hopefully transition into future paid employment. According to the petitioners, L.J.A.’s present and possible future earnings will jeopardize her entitlement to government benefits if her earnings are not deposited into the 529A account. The petition is therefore GRANTED and the restraints are lifted so that the petitioners can establish the account. A copy of the account should be filed with the court.This constitutes the decision and order of the Court.Dated: June 13, 2019
