Would an ABLE account benefit my special needs child?

Cute disabled child smiling at camera in hall against black background

An ABLE account is a tax advantaged savings account for someone with disabilities with an onset prior to age twenty-six. Means tested programs like Supplemental Security Income (SSI), Medicaid, and Section 8 housing, have limits on resources and income. The recipient of these types of benefits can only have $2,000 in available resources to be eligible. An ABLE account allows a disabled individual to have resources above the $2,000 limit without risking the loss of government benefits because the balance of the ABLE account does not count towards the resource limit, much like the resources held in a special needs trust (SNT).

The Stephen Beck Jr. Achieving a Better Life Experience (ABLE) Act and was signed into law by President Obama in 2014. Oregon Senate Bill 777, signed in 2015, established a state ABLE Act program in Oregon. Finally, in 2017, the Oregon ABLE Savings Plan has been implemented.

To be eligible to open an ABLE account, the person must be blind or have a disability, according to the Social Security Administration standards, and the blindness or disability must have begun before age twenty-six. Recipients of SSI or Social Security Disability Insurance (SSDI) are automatically eligible. For applicants not receiving SSI or SSDI, a letter from a physician certifying that the applicant is disabled and that the disability started before age twenty-six is sufficient.

To establish an ABLE account the disabled person or her/his legal representative (guardian, conservator, or agent under a power of attorney) can go to the Oregon ABLE Savings Plan (http://oregonablesavings.com/), or any other state with an ABLE program. Currently fifteen states in addition to Oregon have open ABLE programs. A disabled person can only have one ABLE account. The account owner, family, or friends, can deposit up to $14,000 (2017) into the account per year. The maximum amount that may be held in the Oregon ABLE account is $310,000. However, once the account balance reaches $100,000 the owner’s SSI benefits will be suspended until the account drops below $100,000.

Funds in the ABLE account can be used to pay for the owner’s qualified disabilities expenses (QDE).

QDEs include:

  • Education
  • Housing
  • Transportation
  • Employment training and support
  • Assistive technology and personal support services
  • Health
  • Prevention and wellness
  • Financial management and administrative services
  • Legal fees
  • Expenses for ABLE account oversight and monitoring
  • Funeral and burial expenses
  • Basic living expenses.

These qualified expenses are broader than the permissible distributions from a SNT for SSI recipients.

An ABLE Account will provide more autonomy, choice, and control for the owner and family. The cost to establish an ABLE account is considerably less than those to establish a SNT.  ABLE account owners have the ability to control their funds and, if circumstances change, still have other options available to them. Determining if an ABLE account is appropriate will depend upon individual circumstances. For many families, the ABLE account will be a significant and viable option in addition to, rather than instead of, a SNT.

An experienced Elder Law and Estate Planning attorney can help you to understand ABLE accounts and how they can benefit you or your loved one. Contact us at (503) 245-0894 to set an appointment.