1. What Is an ABLE Account?

2. New Planning Tool
Tax-free savings for qualified individuals with disabilities Doesn’t affect eligibility for means- tested government benefits Similar to 529 College Savings Plan

3. Who Qualifies? Disability onset prior to age 26
Satisfies Social Security definition of “significant functional limitations stemming from the disabling condition”
Document with:
Proof they received SSI or SSDI prior to age 26
Doctor’s certification
Most programs allow out-of- state applicants

4. Contribution Limits One account per individual
Annual contributions from all donors limited to federal annual gift tax exclusion ($14,000 in 2017)
SSI suspended when balance exceeds $100,000
Limit to lifetime contributions matches each state’s 529 College Savings Plan (ranging from $250,000-$450,000)

5. Who Can Create/Manage Account?
Assumes beneficiary has capacity to create and manage account
Otherwise, parents, conservator/guardian, agent under POA
Establishing POA recommended to cover possibility of future decline in capacity

6. Qualified Distributions
Broadly defined “qualified disability expenses “(QDEs) support beneficiary’s health, independence, quality of life
Basic living expenses, education, transportation, employment training & support, healthcare, etc.
No SSI ISM when housing expenses paid from ABLE account
Non-QDEs taxed, with 10% federal penalty and potential state fine

7. Taxes Account grows federal income-tax free
Contributions not tax-deductible for federal tax
Qualifies for federal annual gift tax exclusion
Limited benefit for most people enrolled in means- tested programs who pay little or no taxes

8. Medicaid Payback
Funds remaining at beneficiary’s death subject to lien by state Medicaid
Source of funds doesn’t matter
Payback for services since account established
Some states may waive right to lien for their own residents

9. Making the Decision
Consult a special needs attorney about interaction of ABLE accounts and SNTs
One or both may be appropriate based on circumstances