Understanding ABLE Act Accounts

The ABLE Act has allowed individuals with disabilities, and their families, to improve their quality of life and financial security. But, how do ABLE Accounts work, and how can a disabled individual create one? Here, the disability law advocates at The Law Offices of James A. List answer some frequently asked questions regarding ABLE Act Accounts.

Overview of the ABLE Act

The Stephen Beck Jr. Achieving a Better Life Experience Act of 2014 (ABLE) allows ABLE Accounts to be created by disabled individuals. While the recipient is the disabled individual, anyone can contribute after-tax income to the account—so long as the contributions of all parties does not exceed the federal gift tax exclusion, which in 2017 is $14,000. The accounts grow tax-deferred, and are tax-free if used for qualifying disability expenses. The Act’s intended purpose was to essentially increase the $2,000 means-tested asset limit for disabled individuals and their families, thus helping them boost their financial security while simultaneously receiving federal benefits.

Eligibility to Open an ABLE Account

There is an age and severity of disability requirement in order to be eligible to open an ABLE Account. An individual’s disability must have presented symptoms before the age of 26, and the individual must have “marked and severe functional limitations.” If an individual is already receiving SSI or SSDI payments, they are automatically eligible to open an account; those who aren’t will be eligible to open an account upon receiving a disability certification from a certified physician.

ABLE Account Asset Limitations

Individuals can deposit up to $350,000 in an ABLE Account in Maryland, but after the account carries $100,000, an individual’s eligibility for SSI benefits will be suspended. The benefits will be reinstated when the individual spends their ABLE Account down to under $100,000. Medicaid eligibility, however, remains even when an ABLE Account exceeds the $100,000 threshold.

Using Assets in an ABLE Account

As mentioned previously, assets in an ABLE Account cannot be taxed if used for qualifying disability expenses. This is defined as any expense that is incurred by the beneficiary of the account as a result of living with their disability. This includes a wide array of expenses, including transportation, housing, education, employment training and support, assistive technology, personal supportive services, healthcare expenses, financial management and administrative services, daily living expenses and other expenses to enhance the beneficiary’s overall quality of life. While beneficiaries do not need state approval to spend ABLE Account assets, it is advisable for beneficiaries to keep documentation of their expenses, should they be audited.

Structure of ABLE Accounts

Qualifying individuals are allowed to open an ABLE Account in any state that offers the program, regardless of their current residency or home state status. Each state’s ABLE Account program varies, and different investment choices, fee structures and costs exist, so it is advisable for eligible candidates to carefully research the programs in various states to determine the one that best fits their unique needs. A legal advisor can assist individuals and families in completing an application to open an ABLE Account.

At James A. List Law, we are dedicated to helping disabled individuals have access to and receive the benefits they need and deserve. Let one of our dedicated legal experts help you open an ABLE Account—contact us today for more information or a free consultation.


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Hunt Valley, Maryland 21031

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Ocean City, Maryland 21842