What is an ABLE Account?

The “Achieving a Better Life Experience Act of 2014” created ABLE accounts.  ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families and which are based on college 529 Plans.  They allow an individual with disabilities to open one account that is not countable as a resource when determining the individual’s eligibility for public benefits, such as Supplemental Security Income and Medicaid.

Unlike with Special Needs Trusts, the account beneficiary may manage the account, determine what distributions are appropriate, and directly use the account funds. The annual contributions to ABLE accounts, which are not permitted to exceed the annual gift exclusion, are made with after-tax dollars.

ABLE accounts were not created to replace a Special Needs Trust but are another useful tool to allow individuals with disabilities to maintain some financial assets while retaining eligibility for public benefits.  The implementation and administration of ABLE accounts are determined by each state.  NC ABLE launched on January 26, 2017 and is open to all who qualify nationwide.