If you or a loved one have special needs, it is likely that you are currently accessing government benefits. These programs are designed to assist persons with special needs with everything from everyday cost of living to medical care and more. While these programs provide critical benefits, they can also feel restricting for a person with special needs should they or a loved one want to set aside money for them. That is because savings and other assets can be counted against them and end up disqualifying them for the benefit programs. Fortunately, there are several options that allow people with special needs and their loved ones to set aside money and assets without risking the loss of government benefits. One such option is an ABLE Account.
Have You Heard of ABLE Accounts?
ABLE accounts, named from the federal Achieving a Better Life Experience (ABLE) Act, are established and managed at the state level. The majority of states have ABLE account programs, but each has slight variations in their rules, procedures, and uses for the ABLE accounts. Essentially, an ABLE account is a bank account for those with special needs. It allows special needs individuals to save money without risking the loss of disability benefits.
ABLE United is Florida’s ABLE account program. It was one of the first ABLE programs established in the U.S. and ABLE United is only available to Florida residents. Money held in an ABLE account is not counted against a person trying to qualify for government disability benefits. You see, when a person with special needs applies for disability benefits, they must be able to show that they cannot financially support themselves. Money held in a traditional bank account would count against them, but ABLE account holdings would not.
Special needs trusts are another way to provide an individual with special needs with savings and financial support without jeopardizing benefits. These trusts, however, need to be controlled by a trustee, a person who is not the special needs beneficiary of the trust. So, with a special needs trust alone, a person with special needs may have additional financial support, but little control over their finances. ABLE accounts, however, allow savings for a person with special needs that allows them access to the account holdings. This gives them some great financial independence that they would otherwise not be afforded.
There are, however, some basic eligibility requirements for ABLE accounts. First and foremost, an individual must have a disabling condition that started prior to the age of 26 to qualify for ABLE account use. Each person is only permitted to have one ABLE account. Also, anyone can contribute to the ABLE account, but contributions are capped each year. The limit for 2023 is $17,000. An ABLE account cannot exceed $100,000 for beneficiaries that qualify for SSI. Last, but not least, funds in an ABLE account must be only used for Qualified Disability Expenses (QDE).