The Social Security Administration has issued guidance confirming that Trump Accounts are excluded as a countable resource for SSI. Learn what this means for families, how ABLE account rollovers work, and important rules to keep in mind when planning for a loved one with a disability.
Transcript
Hi, I’m Mike Walther, Founder and President of Oak Wealth Advisors, with a quick summary about the intersection of Trump Accounts and the disability community.
If you have a loved one with a disability, please listen to what we have to say. We hope this information helps with your planning this summer and in the years ahead.
Just recently, on May 27, the Social Security Administration issued guidance confirming that new Trump Accounts will be fully excluded as a countable resource for SSI purposes. That’s important because these accounts could grow to tens of thousands of dollars over time. When the government determines whether your loved one has more than the $2,000 asset limit for SSI eligibility, the assets in a Trump Account will not count.
That exclusion continues until the year the child turns 17. During that year, the child will be able to roll over any amount from a Trump Account into an ABLE account. Whether it’s $50,000 or even $100,000, those funds can be transferred into an ABLE account without creating a taxable event, and the rollover will not count as income in the year it occurs.
Those are two very important planning opportunities.
We also know that contributions made directly into a Trump Account are not counted for SSI purposes. However, because funds cannot be distributed from a Trump Account until the beneficiary reaches age 18, it’s important to understand that SSI benefit payments should not be deposited into a Trump Account.
For example, you should not move SSI checks from a representative payee account or another account into a Trump Account. Those benefits are intended to be available for the individual’s current needs, and placing them into an account that cannot be accessed until age 18 is not permitted.
So, the key things to remember are these:
Trump Accounts are a valuable new savings tool that allow families to accumulate assets through age 17 without jeopardizing SSI eligibility.
When the beneficiary reaches age 17, there is an opportunity to roll those funds into an ABLE account tax-free and penalty-free.
Finally, do not deposit government benefit checks into a Trump Account. Those funds are meant to be available for the individual’s current expenses, and moving them into a restricted account could create problems.
It’s also important to stay up to date on future IRS and Social Security guidance regarding Trump Accounts. These accounts are very new, and funding begins after July 4, so we expect additional guidance in the months and years ahead.
If you’d like help understanding how Trump Accounts may fit into your family’s financial plan, please reach out to your advisor.
You can also check out our Special Needs Voice podcast, where we feature engaging guests each month who share the latest information affecting the disability community.
As always, consult with your personal financial advisor and your tax professional to make sure any planning strategies are appropriate for your family’s unique circumstances. The information we’ve shared today is general in nature and may not apply to everyone.
We wish you all the best. Thank you.
