Expanding ABLE Through Collaboration

Last week, the National Association of State Treasurers (NAST) sponsored its 2021 Treasury Management Training Symposium, which occurred virtually and featured a panel titled “Expanding ABLE Through Different Types of Collaboration.”

Moderated by Amy Corbin, Executive Director for the ABLE Authority which oversees Indiana’s state ABLE plan, the panelists included:

  • Mary Rubenis, Associate Director responsible for coordinating educational outreach, strategic partnership building and marketing strategy for the Massachusetts’ ABLE plan; and
  • Robert Fechtman, a national expert in special needs and elder law and a former President of the Special Needs Alliance, whose legal practice includes both ABLE accounts and special needs trusts.
  • This writer was honored to also participate as a panelist, representing the National Structured Settlement Trade Association (NSSTA).

This NAST ABLE Panel followed by five weeks a complementary ABLE Panel which was part of NSSTA’s virtual 2021 Annual Conference. The NSSTA ABLE panel, moderated by Joseph Loseman, was titled “ABLE Accounts: An Opportunity, A Problem and a Proposed Solution.”

ABLE panelists at the NSSTA conference included NAST representatives Eric Ochmanek and Doug Jackson, along with consultant Ken Brown, who is currently advising NSSTA on possible legislative solutions for the “direct funding” structured settlement ABLE issue. Ochmanek and Jackson are also members of NAST’s ABLE Task Force.

One of the challenges in marketing ABLE, as Ochmanek highlighted in his comments to NSSTA, is that the Federal government created a state administered program for ABLE accounts without providing related administrative funding.

For cash-strapped state governments, this funding issue has created challenges and has prioritized the need for collaboration among various ABLE stakeholder groups including ABLE administrators, special needs attorneys and the disability community. During their NAST panel presentations, Mary Rubenis and Robert Fechtman described how they have personally collaborated with others to help expand ABLE.

Structured Settlements and ABLE

Structured settlement annuities and ABLE accounts currently represent a paradox – and, to date, a missed opportunity for both.

Structured settlements and ABLE accounts share basic similarities. Both are created under the Internal Revenue Code. Both are supported by public policy. Both benefit individuals with disabilities – although with structured settlements persons with disabilities represent only one important subset of recipients.

Structured settlement annuities and ABLE accounts, therefore, would seem to represent a perfect settlement planning match. ABLE accounts supplement personal injury settlements with tax advantages and means-tested government benefits. Direct payment of structured settlement annuities would provide a convenient, reliable and secure settlement planning solution. A highly rated life insurance company, supervised by a state insurance department, would guarantee the periodic payments.

In addition, as prioritized by the NAST panel title, “collaboration” represents an inherent characteristic of both structured structured professionals, as part of settlement planning teams, and structured settlement annuities, as part of integrated personal injury settlement plans. Under the leadership of NSSTA’s Executive Director Eric Vaughn, NSSTA has also forged collaborative strategic alliances with multiple associations as well as the congressional Structured Settlement Caucus.

Unfortunately, however, unlike ABLE accounts, no specific authority exists for “structured settlements” under Social Security law. And as Ken Brown explained to NSSTA members during the NSSTA ABLE Panel discussion:

The Social Security Administration considers payments from a structured settlement as analogous to benefit payments or support payments in that, even if they are paid into an ABLE account, they are considered as income to the individual legally entitled to receive them and to whom the payment is due. This is reinforced by the fact that [unlike special needs trusts] the person entitled to receive the payment is also the owner of the ABLE account.”

As a result, direct payment of structured settlement annuities into an ABLE account could disqualify ABLE beneficiaries from receiving SSI, Medicaid and other means-tested public benefits. Attorneys therefore have been reluctant to recommend “direct funding” of ABLE accounts using structured settlement annuities.

Currently, there are two alternative solutions to use structured settlement annuities to fund ABLE accounts, neither of which is as satisfactory as direct funding. The first alternative is indirect funding by irrevocably assigning structure settlement payment to a special needs trust or pooled trust which can then fund the ABLE account. Not only is this alternative more expensive, and perhaps prohibitively so for smaller cases, it is also uncertain and depends upon the continued willingness of a trustee to fund an ABLE account.

The second alternative, initially suggested by attorney David Lillesand, and explained in this prior Independent Life article, depends upon a Social Security “waiver.” As Ken Brown pointed out to NSSTA members, however, some downside risks exist with this “waiver” approach.

For all of these reasons, NSSTA and NAST, with consulting advice from Ken Brown, are considering a legislative solution for the “direct payment” structured settlement issue to benefit qualifying individuals with disabilities who receive physical personal injury settlements.


Strategic alliances and collaboration with other associations represent critical factors for future success assuming NSSTA intends to strengthen and grow the structured settlement market within the larger more complex business of personal injury settlement planning.

The developing relationship between NSSTA and NAST focusing on solving the “direct funding” issue and growing the ABLE market provides an excellent opportunity to demonstrate the benefits of this type of collaboration.

Potential legislative collaboration between NSSTA and NAST also seems to represent a perfect example of what the NAST ABLE Panel was highlighting and encouraging.

If successful, a legislative solution to the “direct funding” issue would not only expand both the ABLE and structured settlement markets, it would also allow and incentivize structured settlement and settlement planning professionals to collaboratively market ABLE accounts with other ABLE stakeholders including ABLE administrators, special needs attorneys and the disability community.