Monthly Archives: November 2018

Ready & ABLE

A major challenge for individuals with disabilities and their families, is finding the funds to pay for expensive medical treatment, care, and medicine that may be needed on an ongoing basis. Not surprising, many of them depend on government assistance for income, food, healthcare, and housing assistance. However, maintaining eligibility for government assistance programs, such as SSI, SNAP, and Medicaid can be difficult.

To stay eligible for these benefits, a disabled person must remain poor. He or she must satisfy a means or resource test. If a person reports more than allowed in cash savings, retirement funds, and other assets, then he or she may not be able to receive needed benefits. Enter ABLE accounts. These are tax-advantaged savings accounts that will not impact eligibility for government assistance programs.

How Does an ABLE Account Work?

An ABLE account allows individuals with disabilities and their families to set aside funds to defray necessary expenses, without losing eligibility for benefits. The account owner is also the beneficiary of the ABLE account, and any income earned by the accounts is not taxed. Anyone can make contributions, including the account beneficiary, parents, grandparents, other family members and friends.

How May an ABLE Account Be Used?

The ABLE account funds cannot be used for just any reason. Expenditures must be for “qualified” disability expenses. These are expenses resulting from living with disabilities, like expenses related to maintaining the health, independence, and quality of life of individuals with disabilities. Qualified expenses may include education, housing, transportation, job training, assistive technology, and healthcare expenses. An expense is “qualified” if: 1) the expense was incurred when the disabled person was considered an “eligible individual”; 2) the expense relates to the disabled person’s blindness or disability; and 3) the expense helps the disabled person maintain or improve his or her health, independence or quality of life.

Who Is Eligible?

ABLE accounts are available to eligible U.S. citizens and legal residents. Most states offer ABLE accounts and not all of them have a state residency requirement. Both physical and mental disabilities may qualify a person to open an ABLE account.

An eligible individual is someone who first became disabled before age 26 and: is entitled to benefits like Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), based on blindness or disability under Title II or XVI of the Social Security Act; or self-certifies that he or she has a condition listed on the Social Security Administration’s list of compassionate allowances conditions and has a signed qualifying disability diagnosis from a qualified physician; or self-certifies that he or she has an eligible disability and has a written qualifying disability diagnosis signed by a qualified physician.

Furthermore, to open an account based on self-certification, a person needs to have a signed doctor’s diagnosis of blindness or of a physical or mental impairment that results in “marked and severe functional limitations” lasting for a continuous period of 12 months or longer or which can be expected to result in death.

Takeaway

As of January 2018, there are more than 30 ABLE programs across the country, most of which are enrolling people regardless of their state of residence. With an ABLE account, disabled adults are empowered to have control over necessary funds to live a fuller life.

© 2018 Integrity Marketing Solutions. All Rights Reserved.

Business Buying Basics

Are you looking for a business to buy? A lot of planning will be required, before you open the doors (or go live with the website) of your brand-new business. This article provides some general pointers and caveats to consider, to help make your business purchase a success.

The Right Business

What is the right business for you? Your answer will depend on a host of factors, some of which will center on your particular needs and lifestyle. Conduct a thorough (and honest) self-evaluation and determine whether you: a) are physically, financially, and emotionally suited to the business (there is big difference in the day-to-day operation of an antique shop versus a fast food restaurant); and b) do you possess the necessary skills, experience, and commitment to make the business a success (do you know anything about running a nail salon?).

There are many ways to find a business for sale, including online, local trade papers and the assistance of a business broker. When conducting your search, remember that not every business for sale is a good investment. For example, a shop that looks great from the curb or has a flashy website may not be well-run or have the proper staffing to turn a profit. Before buy, you need to have a good sense of exactly what you are buying. How do you do this? Conduct due diligence and evaluate the risk. You should also have the business independently valued.

Due Diligence and Risk Assessment

Due diligence is the process of thoroughly reviewing the business to determine the likelihood of its future success. With an existing business, you will need to inspect the building or office space, the inventory and equipment, the company brand and products, as well as gain insight into the current customer base, vendors, competition and market. Without saying, you will need to carefully look at the books. Prior to seriously considering a business, take a deep dive into its financial history. This should include examining tax returns, balance sheets, cash flow statements, sales records and accounts receivable, accounts payable, debt disclosures and advertising costs. In addition, review any lease and franchise agreements, if applicable.

Independent Valuation

In addition to your own due diligence and risk assessment, an independent valuation by a “business valuation expert” will confirm whether the asking price is reasonable. There are several different valuation methods. Contact your accountant about obtaining these valuation services and make certain you understand the results. You should also ask her about the taxes involved with owning this business.

Making an Offer

Once you decide to purchase the business, you will make an offer. This is a legal matter. All the nitty-gritty details of the sale need to be confirmed in writing. This is a “measure twice and cut once” exercise that must be done right the first time. Mulligans are very expensive! For example, make sure the agreement contains any necessary conditions in the offer, so you may withdraw (without penalty), if the seller does not meet all of the agreed-upon conditions. Are you buying the business entity or the assets?

Takeaway

Even though there are numerous caveats to consider before buying a business, it is generally accepted that buying an existing business is a much safer and faster means to profitability than building a business from the ground up. An existing business will typically come with an established customer base, veteran employees, entrenched policies and processes and even easier options for financing. All that noted, look before you leap!

© 2018 Integrity Marketing Solutions. All Rights Reserved.