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
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!