On December 19, 2014, President Obama signed into law the Achieving a Better Life Experience (ABLE) Act. ABLE accounts allow people with disabilities and their families to open tax-advantaged savings accounts to cover qualified disability-related expenses, including, but not limited to education, transportation, and housing.
Each person may have one ABLE account, and $14,000 per year can be deposited for each beneficiary. The account value, up to $100,000, will be disregarded in determining eligibility for government programs such as Supplemental Security Income ("SSI") and MassHealth.
The ABLE Act amended the Internal Revenue Code to provide a mechanism whereby a disabled person can have access to cash in an account that will not count against the $2000 resource limit for SSI and MassHealth.
This is an important and welcome development for parents who wish to save for a special needs child and for adults to have access to cash without interfering with their SSI benefits. Although the ABLE account program in Massachusetts is currently in the development stage, states such as Ohio, Nebraska, and Tennessee accept nationwide enrollment.
For many families, an ABLE account will complement a Special Needs Trust (SNT) or Pooled Income Trust.
For more information, contact Timothy F. Robertson, Esq.