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The ABLE Act: Achieving a Better Life Experience for your Disabled Family Member

Are you worried about savings for someone in your family (or yourself) with a disability? You are not alone. Millions of people with disabilities and their families depend on a variety of public benefits for income, health care, and food and housing assistance, and have no regular way to set up and maintain a savings cushion.

Thanks to the Stephen Beck Jr. Achieving a Better Life Experience (ABLE) Act, which was enacted in 2014, created something called an ABLE account, also known as a 529 ABLE or 529A account. The ABLE account is a tax-advantaged savings account for eligible persons with disabilities. For the first time, public policy has recognized the significant costs of living with a disability, such as accessible housing and transportation, personal assistance services, education, assistive technology, financial management, administrative services, and health care not covered by insurance, Medicaid, or Medicare. For eligible individuals and their families, ABLE savings accounts will not affect the individual’s eligibility for SSI (up to $100,000.00), Medicaid and other public benefits programs. The ABLE account can be used to pay for any “qualified disability expense” in order to help improve the disabled person’s health, independence and/or quality of life.

It is surprising to learn that 800,000 people in the United States are eligible for these accounts, but only 46,000 have enrolled thus far. If you think you or someone you know may be eligible, we can help.

The ABLE Act limits eligibility to individuals deemed disabled prior to the age of 26. The owner of an ABLE account is the beneficiary of the account, and income earned by the account will not be taxed. Anyone — such as the account beneficiary, family, and friends — can make contributions to the account. Currently, total annual contributions by all participating individuals for a single tax year is $15,000.

An ABLE account gives the owner and family more choice and control than other options such as special needs or pooled trusts.

We can help you set up an ABLE account to ensure savings and financial security for you or someone you care about who has a disability. Contact us today to discuss what you or your family member might need and how this important program can help alleviate some of your financial burdens.

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