May 31, 2018
Most people in the disability community have heard about ABLE (Achieving Better Life Experiences) Accounts. If you haven’t, it is similar to a 529 College Savings Plan, but allows tax-free withdrawals to be used for qualified disability expenses. The funds in ABLE accounts are exempt from being counted against the eligibility limits for needs-based government benefits like SSI and Medi-Cal.
ABLE accounts are an excellent tool to help many with disabilities achieve more independence and save for the future. But, it isn’t a replacement for a Special Needs Trust since there are some limitations as listed below.
ABLE Account Limitations
That last limitation is the most unfortunate of all of them. That is why many families choose to establish a Special Needs Trust. Other reasons for choosing a Special Needs Trust include:
For all of the reasons above, ABLE accounts integrate with, rather than replace, the Special Needs Trust. For disabled individuals who are able to work part-time and constantly worry about their $2,000 asset limitation, an ABLE account can be used as a savings plan to accumulate up to $15,000 per year. These “savings” accounts could build up to $100,000 without effecting SSI, allowing the disabled individual the opportunity for thoughtful planning for their own benefit.
If you would like to speak to an experienced Special Needs Lawyer who understands all advantages and limitations of the legal tools available, call our Folsom office at (916) 241-9661 and schedule an initial consultation.