WisPACT Trust or ABLE Account?

We have already discussed a bit of background on WisPACT trusts and the process to set up a WisPACT trust.

While I strongly encourage clients to look at WisPACT options for beneficiaries with disabilities, there are some circumstances where WisPACT might not be the perfect fit.

In those cases, clients can choose to set aside funds in an ABLE account.  ABLE stands for Achieving a Better Life Experience which was created as a result of the passage of the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014 or better known as the ABLE Act.

Assets held in an ABLE account are treated as “exempt” or not counted when determining eligibility for certain government benefits programs.  In order to be eligible for an ABLE account, the beneficiary must have become disabled prior to turning 26 years old.  If a person is disabled before age 26 and receiving SSI or Social Security Disability (SSDI) benefits, they are presumed to be eligible for an ABLE account.  If a person is not on SSI or SSDI but became disabled before age 26, they may be eligible for an ABLE account with a disability certification from their doctor.

Each ABLE account can receive up to $15,000 per year in deposits.  It is important to note that any assets remaining in an ABLE account upon the beneficiary’s death are subject to the Estate Recovery process, meaning that they may be paid to the State of Wisconsin instead of the beneficiary’s family.

Here is a chart comparing some key components of ABLE accounts and WisPACT trusts:

WisPACT Trust ABLE Account
Do I need an attorney to create? Yes No.
Located in Wisconsin? Yes, WisPACT is headquartered in Madison So far, the state of Wisconsin does not have its own ABLE account program and Wisconsin residents must use another state’s program
Maximum contribution limit? None $15,000 per year maximum with a total account maximum of $330,000
Subject to Estate Recovery? Yes for “first-party” funds;

No for “third-party funds

Yes, regardless of the source of funds

If you have more questions about whether an ABLE account or WisPACT trust is right for you, please reach out to one of our Elder and Special Needs planning attorneys to discuss your specific circumstances.

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Jon L. Fischer

Estate Planning and Elder Law Attorney at McCarty Law LLP
Jon focuses his practice on estate planning, probate matters, and Medicaid planning as he aims to help clients in their time of need.