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Ringler Honolulu
Alexa Zen, J.D.
Lindsay Schoenecke
P.O. Box 11447
Honolulu, HI 96828
(808)521-7666 (Office)

Structure Strategies

Parents Plan for Sam’s Future

Like a lot of parents these days, Ben and Jennifer waited until they were in their 30s before having children. Their youngest son, Sam, was only 10 when he was thrown from a sled in a freak accident and suffered a spinal cord injury that resulted in paraplegia.

Both Ben and Jennifer were nearly 50 when the case was settled, so they knew they needed to plan carefully to ensure a secure future for Sam, even if they weren't around to see him through. Education was a particularly high priority given Sam’s extraordinary musical talent (he was a piano prodigy from the age of 5). With the help of their Ringler consultant, Ben and Jennifer were able to compare and plan for the projected cost of tuition at several prominent music programs.

"Every dollar in that settlement is now worth more than a dollar, thanks to the structure arrangement," said Jennifer. "First, we know no matter what happens to us or the market, his money and all the tax-free earnings are guaranteed to be there when he starts college. Second, we know that the return on a college education averages $20,000 more per year than not having a degree. We were devastated by Sammy's injury, but listening to him play now and thinking about his bright future takes some of the hurt away."

(Note: While Structure Strategies is based on actual Ringler case histories, the names and images of the people involved have been changed to protect their privacy.)

ABLE Accounts and Personal Injury Settlements

Obama Signs ABLE Act President Obama signed the ABLE Act into law in December, providing new savings options for disabled people.

The Basics

To better understand the potential role an ABLE account might play in a personal injury settlement, here are some guidelines contained in the Act:

  • A person can only have one ABLE account.
  • It must be established for a disabled individual whose disability onset was prior to the age of 26.
  • There is an annual contribution limit, currently set at $14,000.
  • If the account grows to more than $100,000, Supplemental Security Income (SSI) payments will be discontinued, but Medicaid remains intact.
  • While the account balance remains below $100,000, gains in the account are not taxed.
  • Distributions will not be taxed if made for qualifying disability-related expenses.
  • Upon death, state Medicaid agencies must be repaid out of the account balance for any benefits provided to the beneficiary while the account was in existence.

While many aspects of an ABLE account sound like those of a Special Needs Trust, there are some distinct differences. Here are some notable ones:

  • An ABLE account can be opened like a basic 529 Plan. There are no costs for legal fees associated with drafting a trust.
  • A professional trustee is unnecessary, saving additional fees and costs.
  • An ABLE account can pay for certain housing expenses that a Special Needs Trust may not cover without the risk of needs-tested benefit disqualification.


While ABLE has been approved at the federal level, each individual state will need to establish its own account infrastructure and guidelines. Like educational 529 plans, a 529A (ABLE) account will likely be managed by a certain investment management company specific to that state’s plan. For this reason, ABLE accounts will likely become reality sometime in 2016 or 2017. That being said, here are some possible applications of ABLE accounts in personal injury settlement planning:

  • Small Settlements (disabled minors, less than $14,000)
    These could be settlements involving injuries to previously disabled children.
  • Small to Medium Settlements
    Settlements for disabled minors where benefits could be structured to make ongoing annual contributions. Account balances above $100,000 would jeopardize Supplemental Security Income (SSI), but would not necessarily disqualify the individual for Medicaid eligibility.
  • Large Settlements
    Settlements where the presence of an ABLE account may complement and provide additional flexibility when used in conjunction with a Special Needs Trust.

Moral of the Story: Right Tool for the Job

Swiss army knifeEffective settlement planning requires knowledge and a network of expert resources. Your Ringler representative can provide meaningful guidance when faced with a claim or lawsuit involving an injured child or young adult. When trying to reach a compromised settlement, the knowledge of your Ringler representative can often prove invaluable to reaching an agreement ... and creating a plan to help the family involved realize peace of mind. Have a case coming up where you may need your own personal Swiss army knife of the settlement world? Call your Ringler representative today.