Been There, Tried it: I Opened an ABLE account

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I Opened and ABLE Account Disclaimer: this is based upon personal experiences of those who have tried a particular intervention or service. It is NOT medical or financial advice, nor a substitute for professional advice. It is neither an endorsement or opposition to any intervention or service. This is an opinion piece.

ABLE account
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We reviewed our financial plan and started to consider opening a trust for our daughter because she has diagnosed disabilities. We understand that it costs more to raise a child with disabilities and want to be sure her future needs are met.

Quickly, we discovered that the set-up of a trust is both complex and expensive. It requires a specialized attorney and due to that, it costs about $4,000.  After a little research, we learned that one way to start saving now was to open an ABLE account. Although we’d like to eventually open a special needs trust, an ABLE account will meet our needs in the meantime.

What is an ABLE account?

ABLE stands for Achieving a Better Life Experience, which refers to the federal Act that was passed in 2015. Because of that Act, states can establish tax-advantaged savings programs for individuals with a disabilities. It allows individuals with disabilities to save money for qualified expenses without being taxed on the earnings.  Some examples of qualified expenses include legal fees, adaptive equipment, housing, health, wellness, education, training and transportation.

How much can be saved?

In 2018, ABLE allows a maximum $15,000 in savings annually without impacting eligibility for government assistance (like SSI) so long as it doesn’t exceed $100,000.  Family members who might opt to bequeath part of an estate to an individual with a disability or give money as a gift can deposit funds into an ABLE account.

My Experience

The site I found boasted that account set-up was easy and would take merely minutes.  They were right – it took about 20 minutes to complete enrollment.

Prepare

You’ll need names for those who will have access to the account, along with social security numbers.  In order to set up direct deposit, have bank account information ready (it took me several minutes to search for this mid-application).

Our Plan

Our daughter has a college saver that we opened when she was born.  We now understand that if we keep this account, it might disqualify her for government benefits when she turns 18 due to her disability.  We plan to put those funds into her ABLE account.

Tell Family Members

Let family members know about the ABLE account. Ask them not to open bank accounts in a loved one’s name, or have a plan to leave any part of an estate or other monetary gift that could impact government benefits.

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