Michigan to unveil its ABLE program on November 1, 2016 – By: Christopher W. Smith, JD

The following is an article written by C&T Attorney Christopher W. Smith regarding the current status of the ABLE act and ABLE accounts and the unveiling of Michigan’s ABLE program (MiABLE). We hope you find it helpful:

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On November 1, 2016, at 11:30 a.m., Michigan will unveil its ABLE program (MiABLE) in Lansing at the State Capitol.  Lt. Governor Brian Calley will be attendance and will have the honors of setting up the first account.  Barring something unexpected, this will make Michigan the fifth ABLE program.

This is an exciting time as we continue to find new uses for ABLE accounts.  Further, the Michigan Department of Treasury and TSA Consulting Group should be commended for working to get a program up without having any funding allocated from the legislature.

However, we remain concerned that Michigan has a tough road ahead.  Since Congress changed the law giving beneficiaries the ability to open up ABLE accounts in any state (just like college 529 plans), competition will be steep as many programs will compete nationwide for enrollment.  Our understanding is that Ohio continues to be in the lead with approximately 1,100 accounts.  Ten states have apparently gotten together to create a joint ABLE program.  And one state – Wisconsin – actually repealed its ABLE enabling legislation after coming to the conclusion that it did not make financial sense to create its own program.

Simple math demonstrates Michigan’s challenge.  At annual enrollment fees of $45-60 a year, it will take thousands of participants to make an ABLE program financially viable.  Without a budget allocation, can Michigan absorb the early financial losses that are likely necessary to create an attractive and sustainable program?

We really hope so.  But as we wrote in a previous post, Ohio’s STABLE program used funds allocated by its legislature to create an extremely thoughtful program with truly impressive bells and whistles.  With only a week before launch, Michigan has not unveiled any of its program’s features.  Unless Michigan allocates funds to the program, our expectations will be kept in check.

So while we really want to promote Michigan’s MiABLE program, we do not yet know enough to recommend it to clients.  If Michigan pride is your number one factor, by all means sign up.  But if you want to enroll in the best ABLE program, we are not convinced that Michigan is quite there.