Oct 27, 2020

IRS Issues Final Regulations Regarding Hierarchy Over Creation and Signatories of ABLE Accounts

By Shirley B. Whitenack, Esq.

The IRS recently issued final regulations that provide guidance regarding ABLE Act programs which created federal tax-advantaged savings accounts for eligible individuals with disabilities. Among other things, the final regulations set forth a hierarchy of those who may establish an ABLE account for an individual or exercise signatory authority over that account.


Specifically, the order of priority is an individual chosen by the eligible individual, the eligible individual’s attorney-in-fact under a power of attorney, a conservator, a legal guardian, a spouse, a parent, a sibling, a grandparent or a representative payee appointed by the Social Security Administration. The final regulations permit a qualified ABLE account program to accept a certification by an individual, under penalties of perjury, that he or she is authorized to establish the account and that there is no other person willing and able with a higher priority to create the account.


An eligible individual with capacity may remove and replace the individual with signature authority and name a successor signatory. If the eligible individual lacks capacity, the signatory may appoint a successor consistent with the stated hierarchy. The final regulations, which include guidance on other aspects of ABLE accounts, are effective upon publication in the Federal Register.


If you have any questions or request additional information, please contact any member of Schenck, Price, Smith & King’s Elder and Special Needs Law Practice Group: Shirley B. Whitenack, Regina M. Spielberg, Gary Mazart, Meredith L. Grocott, Lauren Mechaly and Jordan M. Wassel.


DISCLAIMER: This Alert is designed to keep you aware of recent developments in the law. It is not intended to be legal advice, which can only be given after the attorney understands the facts of a particular matter and the goals of the client.