ProtectS ASSETS FROM MEDICAID “CLAW BACK”
This week, the Illinois ABLE Asset Protection Act became law after Governor J.B. Pritzker signed the legislation championed by Illinois Treasurer Michael Frerichs. The legislation helps ensure that IL ABLE aligns with the spirit of the Achieving a Better Life Experience (“ABLE”) Act of 2014: to improve quality of life, increase independence, and improve self-reliance of the individual with a disability through a secure way to save for the additional expenses that come with having a disability.
The first law of its kind to be passed in the country, the Illinois ABLE Asset Protection Act is intended to allow assets in an IL ABLE account, after funeral and burial expenses are paid, to be transferred to another ABLE-eligible individual without being distributed to a probate estate pursuant to a payable on death agreement. In these instances, in Illinois, the IL ABLE assets should avoid probate costs, probate creditors and Medicaid recovery, sometimes referred to as “claw back,” upon the death of the Account Owner.
Prior to the Illinois ABLE Asset Protection Act, some individuals and families were concerned that an IL ABLE account would be subject to numerous probate issues, as well as “claw back.” This concern may have outweighed the considerable benefits of owning an IL ABLE tax-advantaged savings and investment account for the benefit of and use by the Account Owner.
IL ABLE accounts allow the Account Owner to save while preserving Medicaid benefits. With an IL ABLE Account, the Account Owner can deposit paychecks, receive gifts or donations from friends and family, and use the money to help pay for the additional expenses that come with living with a disability, many of which are not covered by Medicaid benefits. IL ABLE accounts supplement, but do not replace, federal means-tested benefits.
For more information about the benefits of IL ABLE Accounts please visit the links below.
Find quick answers to your ABLE questions visit IL ABLE FAQs.
Individuals interested in IL ABLE should visit IL ABLE at illinoisable.com.