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  • Carolyn Bedi

ABLE Accounts: A Guide for People with Disabilities

Congressional approval of the Achieving a Better Life Experience (ABLE) Act took place in 2014. This created tax-advantaged accounts for people with disabilities. Funds can grow tax free if used for qualifying expenses. Before the ABLE Act, if a person with disabilities had more than $2,000 in their name, they would lose Medicaid or Supplemental Security Income (SSI) benefits. ABLE accounts allow people with disabilities to have more than $2000 in assets without losing valuable financial support.

How to Qualify for an ABLE Account

In order to qualify for an ABLE account, the beneficiary must have become blind or disabled before the age of 26. When opening an account, a person with disabilities may be asked to provide documentation from their doctor if they are not already receiving Medicaid coverage or SSI. Those already receiving Medicaid coverage or SSI should not have to provide documentation to open an account.

Financial Restrictions

The ABLE account limit is $14,000 per year. This keeps the account from incurring gift taxes. ABLE accounts can’t grow above $100,000 without affecting other benefits. If the account grows above $100,000, Social Security payments are suspended until the account falls below $100,000. Accounts are administered at the state level, but this doesn’t mean that the account must be acquired in their home state. It’s beneficial to investigate and find the account that best fits the needs of the disabled person. Consider annual fees and how the funds are accessed. If immediate access is necessary, an account with a debit card option may be important. Explore your options with an elder law attorney and financial planner to decide which plan is best for your needs.

Eligible Expenses

Funds in the ABLE account can be used for qualified disability expenses which are related to the individual’s blindness or disability, including:

· Housing

· Transportation

· Assistive technology

· Support services

· Health

· Prevention and wellness

· Employment training

· Education

· Funeral and burial expenses

It’s important for people with disabilities to speak with an expert to take advantage of the full benefit of the account and eligible expenses.

Keep receipts and records of the expenses paid for with an ABLE account. The IRS is responsible for regulating them, and you may need records in case of an audit. It may also be beneficial to explain how each expense is related to the disability. Taking these measures will provide documentation if expenses are questioned.

Professional Advice from Elder Law and Special Needs Attorneys

ABLE accounts can benefit many Americans with disabilities. They are one of many tools to help support their unique needs. Elder law attorneys and special needs attorneys may also suggest special needs trusts and other financial options depending on your situation and the needs of your loved one.

Our law firm is dedicated to informing you of issues affecting seniors who may be experiencing declining health and those with disabilities. We help you and your loved ones prepare for potential long-term care medical expenses and the need to transition to in-home care, assisted living care, or nursing facility care. Please contact us today at (757) 222-5842 to schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.


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