ABLE ACCOUNT: Is it the right tool for me? - Part Four

Uses of the ABLE Account

A person receiving needs-based government benefits often has a dilemma when it comes to saving, whether for education or for unexpected events, all while maintaining public benefits such as SSI. In order to receive SSI, a person with a disability must have assets under $2,000. The ABLE Act makes saving possible…up to a point. Now the individual can remain on SSI and save a modest amount in an ABLE account (up to $14,000 per year).

Persons with disabilities who are employed may want to utilize an ABLE account to save a portion of their income while remaining qualified for SSI. In addition, families may want to contribute to an ABLE account for their loved ones with disabilities in smaller increments. These same families may also desire to use other tools available such as Special Needs Trusts, which may be more flexible.

On the other hand, the ABLE account will not be useful for people who have become disabled due to an accident and who are receiving a judgment or settlement for a significant amount. And, it doesn’t work for a person with special needs in receiving a large inheritance. There are several other instances where an ABLE account is not the answer, and the facts and circumstances of the particular individual will need to be reviewed in detail before making any decisions regarding the use and funding of these kinds of accounts.

In closing, we have some good news to report. As of June 1, 2016, Ohio became the first state with an ABLE (STABLE) account program that is up and running, and a Connecticut resident can open up an Ohio ABLE account.

That being stated, every tool has its use and the ABLE (STABLE) account is no exception. Knowing when it is appropriate and knowing when another option might be more so is something we can assist with. Please call us if you would like to learn more about this new law and how it might help you or a loved one. We are always happy to hear from you!