What is an ABLE Account?

A few years ago the world of special needs planning gained a new and exciting financial planning tool: the “ABLE” account. ABLE stands for Achieving a Better Life Experience. An ABLE account offers individuals with disabilities a way to save money, promoting financial security and increased independence. Individuals with disabilities are often unable to build up any savings for fear of losing their public benefits. An ABLE account is a special type of savings account for individuals with disabilities. The funds in an ABLE account do not count towards the resource limits for Supplemental Security Income (SSI) and Medicaid (called MaineCare in Maine) eligibility.

To be eligible for an ABLE account, the individual must have had the disability before age 26. The ABLE account can receive up to $15,000 per year, or more if the individual is working. The account can hold up to $100,000 without impacting SSI eligibility, and even more without impacting MaineCare eligibility. The individual may use funds in the ABLE account for “qualified disability expenses.” The list of qualified disability expenses is very broad and includes basic living expenses such as food and housing, health expenses, education, transportation, and most other purchases that are made to improve the health, independence, and quality of life of the individual.

An ABLE account may be opened by the individual with a disability, or by a parent, guardian, or agent under power of attorney. The ABLE account is a federal program, but it is up to each state to create and administer its own accounts. Maine does not have a program yet, but Maine residents can use ABLE accounts in other states. Our firm typically works with the Ohio STABLE account. It is easy to open an account online at https://www.stableaccount.com/.

The ABLE account may be for you if:

  • You often accumulate too much in your bank account;
  • You receive an inheritance;
  • You receive a personal injury settlement; or
  • You are the beneficiary of a special needs trust and want to use trust funds to pay for food and shelter expenses.

To discuss more about ABLE accounts and whether this planning tool is right for you or a loved one, please give us a call at 947-6500.