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March is Developmental Disabilities Month

Make Sure Your Estate Plan Protects your Special Needs Child – Part 1: ABLE Accounts

March is Developmental Disabilities month, and for families with special needs children, it is a great time to take a second look at their estate plans to make sure that their plan will protect their family when they pass.  Today, we are going to take a look at ABLE accounts (STABLE accounts in Ohio) and when they should be used.


ABLE accounts are newest tool for special needs estate planning.  Created by the federal government in 2014, ABLE accounts allow money to be sheltered for the use of a disabled individual without jeopardizing their SSI or Medicaid benefits.  A few key features of ABLE accounts:

  • ABLE accounts may only be set up for an individual who was disabled prior to age 26.
  • In general, only $15,000 a year may be contributed to an ABLE account (this number may be higher for individuals who are working)
  • A maximum of $100,000 can be in an ABLE account without affecting SSI benefits
  • Anyone can contribute to an individual’s ABLE account
  • Any money left at the beneficiary’s death is subject to a Medicaid payback
  • ABLE accounts grow tax free, and contributions may be tax deductible.
  • Money in an ABLE account may only be used for certain expenses

So when would someone use an ABLE account?

They are especially useful when a disabled individual has too much money accumulating in their name, and need to get their account back below $2000 to stay qualified for SSI.  On the horizon, the COVID stimulus checks pose just such an issue.  For a year that money was not counted as a resource for SSI, but individuals who are unable to spend down that money before the year is up will be at risk of losing their benefits if the money is not removed from their account.  An ABLE account, for those eligible, is a great tool for this.