Meghan Smallwood: 0:00

Well, welcome back to the Postsecondary Transition podcast where we have conversations around the ins and outs and everything in between of the transition process for families of students with disabilities. I'm one of the hosts. My name is Meghan Smallwood,

Patrick Cadigan: 0:14

And my name is Patrick Cadigan, and we are both the public school transition coordinators.

Meghan Smallwood: 0:20

That we are. And we are very fortunate to be able to have a discussion today with Kelly Nelson from ABLE account. Kelly Nelson's worked in the field of disabilities for more than 30 years. She served in many roles supporting people with disabilities and their families through advocacy, education and connecting them to vital resources within their community. As a parent of a child with disabilities, Kelly is passionate about helping her daughter to become a confident self advocate as the Outreach and Communications Manager for Maryland able she is excited to connect with people with disabilities and their families, to share with them how an ABLE account can be used to promote personal choice, independence and financial stability. So welcome Kelly.

Kelly Nelson: 1:02

Well, thank you so much. I'm excited to be here tonight. This is definitely a topic that is very near and dear to my heart, as my daughter just transitioned out of the public school system in June, so I am getting my feet wet in the adult services world, so I've made that transition over and I think it's so fresh in my mind, having gone through that transition years with my daughter, that I know how important it is to share resources with families about all the things that we need to know and those services as we head into it, into the adult world. So thanks for having me.

Meghan Smallwood: 1:38

Well, I think you just gave us a little insight into your background, but do you mind sharing just how you came about to be with ABLE accounts and a little bit about your background professionally?

Kelly Nelson: 1:48

So I've worked in the disability field for many, many years, and I my previous to Maryland able one of my most recent jobs was with Harford County Public School System, and I was in the Family Support Department, and I had this opportunity, I was invited to interview for Maryland ABLE when it first launched back in 2017 and, you know, it was just, it was something so exciting to me, because I knew that people with disabilities and their families they they faced, you know, additional cost of caring for and raising a child with a disability, as I had as well, and you know, to be able to help families pay for those things and plan for the future. Because, you know, I think for all families, not only are we looking forward to that time where we transition into adult services and preparing our students and ourselves for that. But then families also have that additional thing that's always in the back of their mind that says, hey, you know, right now, we got everything covered. We're taking care of our child, we're parents. We're doing what parents do. But what happens decades from now, when we're no longer here and they're here. How do we protect their benefits so that they have those moving forward and set them up for a future that we want for their lives and that they want for their lives? So ABLE was one of those ways that I could see it was a really helpful tool to make that happen.

Meghan Smallwood: 3:16

And that is a very scary thing to think about. Every parent that I've talked to that's a hard topic.

Patrick Cadigan: 3:24

Where I would really like to begin this conversation is Kelly, if you were talking to someone who is new to this topic, how would you define what an ABLE account is?

Kelly Nelson: 3:38

Well, I would say that ABLE accounts are a very helpful tool for families to begin to look at that future for their child. I mean, usually, when we have a student in the school system and they have a disability, we don't always see families having those means tested benefits currently in place for their child, because they are indeed that means tested benefits. So if your child is born or has been diagnosed with a disability, they may indeed have a qualifying disability. But if you were to apply for things such as Social Security, SSI benefits, lots of times, families are denied because they're the Social Security Administration is going to be examining the entire family's income, so mom and dad's income, if they're working sometimes just means that, yes, guys, you've got a qualifying disability here, but no, you don't qualify because of the income. We do know that when families apply again, when their student turns 18, Social Security is going to be examining just that student's income, and it's obviously going to be way less than the family income, or maybe nothing at all. So we want to make sure that, as we are taking care of our family members now, we're looking to the future to set them up for success when they are eligible for these means tested benefits. And by that I mean. Social Security, SSI and Medicaid, that's that health insurance piece. And then oftentimes when people get Medicaid, they can qualify for additional Medicaid waivers, which are really critical moving forward into adult services challenges that you know, the good part is, when they receive those SSI benefits, they're going to get that monthly cash benefit, they'll get Medicaid and possibly other waivers. But the challenge has always been that person can never have more than $2,000 in assets. And I mean collectively, not, you know, 2000 in this account and 2000 that but I mean collectively, because if they are to exceed that social security asset limitation, they immediately lose their Medicaid, the health insurance piece, and then after a period of time, if they don't spend that money down, then they lose their SSI cash benefits. So ABLE accounts are a solution to that problem. It's one of the ways that families can to begin to plan and prepare for their future, save money in the child's own name and still maintain those benefits. So that is really the most important, I guess, fundamental part about ABLE accounts is they are asset protection accounts, meaning your family member can now have above the $2,000 limit, actually all the way up to $100,000 in an ABLE account, and still maintain those critical benefits.

Patrick Cadigan: 6:34

An ABLE account, then, is different from a general savings account?

Kelly Nelson: 6:39

Absolutely. So money in a regular banking account, whether it be a checking account, a savings account, a 401K, you know, anything like that. Money in the child's name, in those types of accounts are countable resources by Social Security and Medicaid. So that's why they can't have money in their own name, the only way that it was ever possible to be able to save for your child with a disability, and this is the OG method, was a Special Needs Trust, and that's been around for a couple of decades. The challenge is not everyone can afford to create a special needs trust right away. They are an investment of money, because you're you're going to be working with an attorney, and you're going to invest your time to create this document, and it takes several months. So eventually we see families usually winding up with both a special needs trust and an ABLE account. But an ABLE account, you can get opened up in about 15 minutes online, and that's something that they can pick that low lying fruit. That's what I always tell families, guys, when you're when you're raising a child with a disability, especially when you're getting close to transition age, just start pecking away one thing at a time. Of all the things on our to do list start with that low lying fruit. If you've got 15 minutes, you can get that account open, and then you know, you can move assets from your child's name inside of able where it no longer counts it's not countable by as a resource, by Social Security and Medicaid.

Meghan Smallwood: 8:10

And that's a question I feel like I hear a lot from families. Well, how is this different? I have a special needs trust? Can I have both? And it is a great option. And I think another question that I hear a lot from families is,"Well, I had a 529 started when they were born, but obviously I can't use that now. What do I do?"

Kelly Nelson: 8:29

So with the 529 account, which is really nice, is that if mom or dad or grandparents open an account for a child when they were born, and maybe perhaps college is not going to be their pathway, they can roll money over from that 529, account into an ABLE account, and now the money that was formerly earmarked for just education expenses can now be utilized for anything at all that's going to support their child in their health, their independence, or their overall quality of life. So it expands what that money can be used for. There is no fee to roll over the money from a 529, into able and a lot of people do that because, you know, they're not really sure what's going to happen in the future. But let's just say mom and dad rolled that money over. Lo and behold, 10 years after they exit the high school system, they're going to go back to school, they're going to go to a community college. Oh, we had no idea, darn it. We shouldn't have done this. You know, it's okay, because with an ABLE account, you can use the money in the ABLE account to pay for college, room and board, tuition, books, everything. So there's really no risk in, you know, moving that 529, money into able because you can still use it for education.

Meghan Smallwood: 9:45

And that's another question I always hear. Well, what do I know it can what can it be used for? Is there a list somewhere to show me what it can be used for?

Kelly Nelson: 9:54

Yes, I know I hear that question.

Meghan Smallwood: 9:56

I'm sure you do.

Kelly Nelson: 9:58

And I always say, in some ways, I wish that the IRS would have published the 2027 things you can do with an ABLE account. But they did it instead. They gave us this criteria that the account owner, or who's ever going to manage the account, is going to ask before using that money, they just have to say, Does this withdrawal? What I'm about to buy, the service I'm about to, you know, purchase, does it support my son or daughter in his or her health, independence or their quality of life? That's a very broad definition. And some people are like, I love that definition. That's great. I've got all kinds of ideas. Other people are like, Oh my gosh, Kelly, that's just the worst thing I've ever heard. How do I know? Like, how do I know? And I just say, ask yourself, you know, whatever it is, does it fit one of those criteria? Because then you are going to make that decision. So if you think about it, guys, health, we kind of got that right. We know it's medical expenses, dental braces, all that kind of stuff. But you know, health can also include health and wellness. Can include a gym membership, yoga classes, swimming lessons, therapeutic horseback riding, right? You got to think broader like that. And also, you know, when you think of independence, that could be transportation, getting, you know, to their job or school or job, coaching, anything that's going to support them in their independence, in the community or quality of life, is the big one. And one of the ones that I get probably every single time I do a presentation is, well, what about a vacation? Can my son or daughter use their money to pay for a vacation? Well, let me ask you, what do you say, Meghan, does a vacation support your quality of life.

Meghan Smallwood: 11:41

Oh, absolutely, I could use one right now,

Kelly Nelson: 11:44

Exactly. So the difference is, you know, for example, my daughter has an ABLE account, and she wanted to go to Disney, and it was something as a goal she had set for herself for some time, and eventually she saved up enough money in her ABLE account to pay for her tickets to the park and her airfare. The difference was she couldn't use her able funds to pay for her whole family, her brothers, her parents, to go to the park, because the ABLE account is intended for the benefit of the beneficiary, the person with a disability. But yes, absolutely, a vacation is going to support that quality of life. So you can see it's very diverse.

Patrick Cadigan: 12:22

And that actually then leads me into my next question in that, how would someone know if their student qualifies for an ABLE account? It's reasonable to assume, based on what I've heard you say, that I personally cannot just walk into a bank and be like, I want to open an ABLE account for myself.

Kelly Nelson: 12:42

Yes, Patrick, I'm glad you said that you were going to walk into a bank and open an ABLE account, because that is something that you're not going to want to do, because you actually are going to probably get a teller that's like an able what? What are you talking about? Many of many of the bank tellers don't know what you're talking about. So ABLE accounts are opened online by visiting the website of your state's program. Like here in Maryland, it's a www Maryland able.org and that's how you can initiate the enrollment process.

Patrick Cadigan: 13:13

Like so many of the things, when you leave the school system, it goes from entitlement to eligibility. How do you know if you are eligible to receive the benefits of an ABLE account?

Kelly Nelson: 13:25

Yes eligibility. So when we look at the criteria for opening an ABLE account, it's basically two criteria. The person enrolling in the account has to have a disability that meets the Social Security Administration's definition of a disability. So that doesn't mean they have to currently be receiving SSI. It just means that they would be eligible for SSI because they have a qualifying disability, which is something that is going to be present with them throughout their lifetime and has a significant enough impact in their daily lives, their ability to work, live, learn, completely independently over a long period of time, right? So they don't have to be receiving it, but they have to have that disability currently, today, you know, it's the it's the ninth of December in 2025 they had to have the onset of that disability prior to their 26th birthday. So anyone listening from the school system, they already know their child's under 26 but that actually is expanding come January 1 of 2026 thanks to the ABLE age Adjustment Act, and that eligibility criteria is going to be increased to anyone that had the onset of their disability before their 46th birthday. So I know that really doesn't apply to us so much with school system, but it certainly helps a lot of people, like veterans that may have had a diagnosis later in life, people that experience a car accident and have a traumatic brain injury, you know, if they were over the age of 26 they couldn't have an ABLE account. But this is going to help a lot of other people. So that's the criteria. You. Yeah, and you know, the types of things that are going to qualify would be things such as autism spectrum disorder, Down syndrome, intellectual disabilities, spina bifida. I mean, it could be epilepsy. There's there's just all kinds of disabilities, blind, someone's blind, or deaf or hard of hearing. So when you go to enroll in the ABLE account, it will actually give you a drop down menu to select the disability that suits your family member.

Meghan Smallwood: 15:28

And then, who owns the ABLE account?

Kelly Nelson: 15:32

That's a really great question, and I'm glad you asked, because this is important to know that the person with the disability, no matter what age they are, is the owner of the ABLE account. They're both the owner and the beneficiary. And this is going to be true. If a family were to have a child born and they know right away that they have a disability, they could open an ABLE account for an infant, and the infant is the owner of that ABLE account. Obviously, when you have a child that has has an ABLE account, we have to have an adult helping them to open the account and manage it. And in the ABLE space, we call this person the Authorized Legal Representative(or the ALR), and this is usually a parent or a grandparent or guardian that's going to serve in that capacity.

Meghan Smallwood: 16:20

What about after 18? I have a lot of families that ask me, "Do I have to be a guardian to open an ABLE account with my child?"

Kelly Nelson: 16:28

No, you don't have to be a guardian. We have it set up so that if you're already, if you've already opened the ABLE account, and you're the person that's you know, the parent that's managing the account, you can continue in that capacity unless, let's just say, you have a child that had an ABLE account. They grow up, they've they've learned how to manage finances, and they are capable of managing their own ABLE account. After 18, they could step in and do that job themselves if they wanted. We do have some we do have ABLE account holders that manage their own account but we also have a lot of account holders that, even after they turn 18, they prefer to have some assistance with it, you know, someone to help them, guide them through the account management process, maybe make some financial decisions with them, so a parent can stay on in that role without having guardianship.

Meghan Smallwood: 17:20

And that's important, because I know a lot that are looking at some alternatives to guardianship, just like a power of attorney, and they want to make sure, well, I don't need to have this guardianship just to help them manage. You know, anything moving further financially?

Kelly Nelson: 17:35

Yes, they can have guardianship. If they have guardianship, they would submit, they would upload their guardianship papers at the time of enrollment. If not, they could. If they did have a power of attorney, they could use that, but if they don't, it will give you some criteria of who can serve in that capacity. So it could be a parent, it could be, you know, siblings, grandparents, somebody serving as representative payee, or if they're older, if they had a spouse or children, they could help as well, but...

Meghan Smallwood: 18:03

Oh, good. So it sounds like it walks them through pretty...

Kelly Nelson: 18:05

Oh, absolutely,

Meghan Smallwood: 18:06

...well.

Patrick Cadigan: 18:07

And when somebody opens an ABLE account, is there, like a minimum contribution? Where does it start?

Kelly Nelson: 18:15

So once the person enrolls in the ABLE account, and they set up their account, name and password and you know, do all that process, it is going to ask the person to link an existing bank account of their choice to their ABLE account that's being set up online. So this could be a person's regular checking or savings account. It could be with any bank. It could be a national bank, a regional bank, a savings and loan. It doesn't matter whatever is most convenient for mom or dad or who's ever setting the account up, and once that account, that checking or savings account, is linked to the ABLE account, mom and dad can make an electronic transfer. That first contribution has to be a minimum of $25 it could be more if they wanted, but it has to that initial funding to do that, get that account started is $25 it's not a fee, it's their actual first contribution. And from that point on, the ALR can go in there, and they could set up monthly contributions if they want electronically, or they could just log in whenever they please, every couple of months and make contributions. And it's all done through that linked bank account. So it's it's like an online banking any parent that does any online banking for Bill pays or just checks their balance on their checking or savings account. It's going to be very similar to that through the dashboard of the ABLE account.

Meghan Smallwood: 19:37

So let's say they have money coming in from SSI, and they want to make sure it's not going to go every 2000 every month, they could just, you know, slide it right over into that ABLE account. That's very handy.

Kelly Nelson: 19:48

Yes. So I know when I opened my daughter's account, she was only 14, she didn't have a checking account, she didn't have a job, obviously, she's still in school, so we use mom and dad's just regular checking account. We were the ones putting money in and taking it out when she needed it. But then at age 21 my sorry, age 20 my daughter started receiving SSI benefits. I took that rep payee account and I added it to her ABLE account as a linked bank account, so that way whatever money my daughter doesn't spend from her monthly benefit, I just electronically slide it over into able, which now it's once it's inside. Able is not accountable resource, because after the excruciating journey that it took two years to get my daughter approved for SSI benefits, you can bet your buttons, I'm not letting that pay account go over $2000.

Meghan Smallwood: 20:42

And that's a huge fear. I know this will not advertise it.

Patrick Cadigan: 20:48

So we're going to pause at this part of the discussion, but please join us back here in two weeks time as we continue to talk with Kelly Nelson and learn more about ABLE accounts.

Meghan Smallwood: 21:12

So don't forget that you can find our discussions everywhere, Apple Spotify, YouTube music and others. So hit that follow button and you won't miss out, please. If you haven't already done so, consider leaving a review, preferably a five star one. It helps you spread the word and helps us, because we know you're listening. Links to the information from our conversations are always in our show notes. Our YouTube channel contains curated videos that revolve around transition, including playlists for guardianship, alternatives to guardianship, ABLE accounts and more to come. And then finally, check out our website, www.postsecondarytransition.com full of information and links to more resources. Thanks again. So much for your time spent with us, and we look forward to talking again with you soon.