My daughter is 16. Way back, we opened 529 plan for her and it now has a considerable balance. We expect her to use the funds to attend a post-high school educational program, depleting the balance by age 22 or 23.
She has been declared disabled by our state (CT) as of age 15 and we have every reason to believe she will be declared disabled when she turns 18. We would like to preserve her financial eligibility for disability benefits (SSI, medicaid).
I have gotten conflicting opinions from 2 different lawyers on the question of the 529 account and its impact on her financial eligibility for disability benefits. One (estate lawyer) said it would render her ineligible and then there'd be the 5 year 'look back' period before she could be eligible.
A different lawyer (estate but special needs focus) said 529 accounts are considered assets of the owner (parents) and therefore would not impact her financial eligibility for disability benefit.
Needless to say I'm confused and would like to sort this out. Knowing that she is going to attend an expensive, post-high school program, we'd like to have the funds available to use for her (and not just transfer the 529 balance to her sibling). Maybe we just take the hit and know she won't be financially eligible for disability benefits until 5 years after the balance is depleted.
Or, maybe there is something we can do now to cover both bases....keep the 529 to use for her post high school educational expenses but preserve financial eligibility for disability benefits at the same time? We have a special needs trust that is set up to be funded at our (both parents) death; maybe we go ahead and start funding it now, with the 529 funds?
And yes...I do know about ABLE 529s, from what I know no state has actually opened a plan yet, so that isn't an option as of today. Sounds like it could help in the future, but I have no idea how soon to expect that.
Thanks for any advice/suggestions.