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Able ACT

Able ACT

What is the Able Act?

Living with a disability can be costly with constant out-of-pocket expenses to pay for care. President Obama signed into law the Achieving Better Life Experience (ABLE) Act. The ABLE Act allows people with disabilities and their family the ability to create a tax-exempt savings account that can be used for improving one’s health, independence, and quality of living.

How does it work?

Individuals with disabilities depend on a variety of publicly funded programs (Medicaid, SSI, SNAP, etc.) to provide financial assistance with everyday needs. Eligibility for these benefits varies from state to state, but generally the individual would need to have $2,000 or less in assets, or “countable funds”, in order to qualify. With the Achieving a Better Life Experience Act, eligible individuals are able to create an ABLE account without fear of damaging their eligibility for programs like SSI and Medicaid.

Who can open an account?

If you have a significant disability with an age of onset of 26 years old or younger and are currently receiving SSI/Medicaid benefits, you are automatically eligible to create an ABLE account. If you are not a recipient of SSI/Medicaid, but still meet the age of onset disability requirement, you may be eligible to open an ABLE account if you meet the SSI requirements regarding significant functional limitations. Individuals over the age of 26 are still eligible for an ABLE account, but must have the documentation of disability that indicates an age of onset before the age of 26.

What are the limitations?

There are limitations ton an ABLE account. For example, the total annual contribution by all participating individuals may not exceed $15,000. For

individuals with disabilities who are recipients of SSI/Medicaid, the first $100,000 towards your ABLE account would be exempt from the resource limit of $2,000. If the ABLE account exceeds $100,000, you (the beneficiary) would then be suspended from SSI eligibility; however, you would still continue to be eligible for Medicaid. Only one account per individual is allowed.

What expenses are covered?

ABLE accounts cover “qualified disability expenses”, meaning any expense related to helping you manage daily life with a disability. These include: housing, education transportation, employment support, healthcare, support services, and other.

Do I Need Estate Planning?

The State of Alabama provides an estate plan for everyone. It is a one size, and it fits everyone. Fits everyone? Not really.

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