An ABLE account is a tax-advantaged savings and investment option that allows eligible individuals with disabilities to save money for everyday expenses without automatically jeopardizing access to certain government benefits. These accounts help cover everything from housing and transportation to education and healthcare, giving individuals greater financial flexibility and independence.
For families navigating disability benefits for their loved ones, finding ways to build savings without exceeding strict asset limits can feel challenging. ABLE accounts offer a valuable opportunity to prepare for future expenses while maintaining access to essential assistance programs.
The estate planning attorneys at Evans & Davis can explain how these accounts work, who qualifies, and how they can complement special needs trusts within a broader estate plan, helping you make informed decisions about your loved one’s financial future.
Understanding ABLE Accounts
ABLE accounts were established under the Achieving a Better Life Experience Act of 2014 and Internal Revenue Code Section 529A. Unlike traditional savings accounts, ABLE accounts offer tax advantages and allow individuals with disabilities to save money without automatically affecting eligibility for certain government benefits.
ABLE accounts are available through state-sponsored programs, many of which accept residents from other states. Eligible individuals can choose a program that meets their needs, but they can only have one ABLE account at a time.
ABLE Accounts vs. Traditional 529 Plans
Traditional 529 plans and ABLE accounts both offer tax-advantaged ways to save for future expenses, but they address different financial needs. A traditional 529 plan primarily helps families prepare for education costs, while an ABLE account supports a much broader range of expenses associated with living with a disability.
For individuals with disabilities, financial needs often extend beyond tuition or medical treatment. Accessible housing, reliable transportation, personal care assistance, and specialized equipment can all play important roles in maintaining independence and quality of life. ABLE accounts allow eligible individuals to use their savings toward these qualifying expenses rather than restricting funds primarily to education.
Tax Benefits and Growth Potential
ABLE accounts offer tax benefits that can help individuals with disabilities make the most of their savings. Although contributions are generally made with money that has already been taxed, any interest or investment earnings grow without being subject to federal income tax while they remain in the account.
Withdrawals are also free from federal income tax when used for qualified disability expenses, including housing, transportation, healthcare, and education. Some states provide additional tax benefits, such as deductions or credits for eligible contributions.
ABLE accounts may earn interest depending on the options available through the selected state program. Some plans offer interest-bearing savings accounts, while others provide investment portfolios with the potential for higher returns and greater risk.
Consider coordinating a Special Needs Trust with an ABLE account to provide greater flexibility for qualified expenses while helping preserve eligibility for certain means-tested benefits.
Who Is Eligible to Open an ABLE Account?
ABLE accounts are designed for individuals with qualifying disabilities that began before a specific age. Eligibility depends on when the disability began and whether the individual meets applicable disability requirements.
Importantly, an individual does not need to receive government disability benefits to qualify. Parents, guardians, and other authorized individuals may also establish and manage accounts on behalf of eligible beneficiaries under federal priority rules.
Age-of-Onset Requirements
Beginning January 1, 2026, ABLE eligibility expanded to individuals whose qualifying disability began before their 46th birthday. Previously, the disability had to begin before age 26.
The important distinction is that the disability must have begun before age 46, not that the individual must open the account before turning 46. This change allows more adults with disabilities to access ABLE accounts, including individuals whose conditions developed later in life.
Proving ABLE Account Eligibility
Individuals generally establish ABLE eligibility through one of two pathways:
- SSI or SSDI eligibility: Individuals who are entitled to qualifying disability benefits due to blindness or a disability that began before age 46 may satisfy the disability eligibility requirement.
- Disability certification: Individuals who do not receive qualifying benefits may use a disability certification supported by a physician’s diagnosis, provided their condition meets the applicable severity and duration requirements.
For the certification pathway, the disability generally must involve a marked and severe functional limitation and be expected to last at least 12 months.
Can You Keep Government Benefits With an ABLE Account?
Many individuals with disabilities rely on means-tested government programs that restrict how much money they can keep in traditional savings accounts.
ABLE accounts create an opportunity to build savings while excluding qualifying account assets from certain public benefit calculations. However, the protections differ by program, making it important to understand how balances and withdrawals affect eligibility.
Supplemental Security Income Protections
Supplemental Security Income, or SSI, generally limits individuals to $2,000 in countable resources. ABLE accounts provide an important exception to this restriction. For SSI purposes, the first $100,000 in an eligible ABLE account is excluded from countable resources. Amounts above that threshold count toward the regular SSI resource limit.
If the excess ABLE balance causes an individual to exceed the applicable resource limit, SSI cash payments may be suspended until resources return to an eligible level. Families should also monitor withdrawals. Housing distributions and certain other withdrawals retained into the following month can become countable resources.
Medicaid and Other Government Assistance
ABLE accounts also provide protections under other federal means-tested programs, including Medicaid, the Supplemental Nutrition Assistance Program, and federal housing assistance administered by the Department of Housing and Urban Development.
Qualifying ABLE account balances generally do not count as resources when determining eligibility for these programs, even if the balance exceeds the $100,000 SSI exclusion amount. However, an ABLE account does not eliminate other eligibility requirements, such as income limits, disability qualifications, or program-specific rules.
What Counts as Qualified Disability Expenses?
ABLE accounts cover much more than medical treatment. Qualified disability expenses, or QDEs, include costs related to the beneficiary’s disability that support their health, independence, or quality of life.
These expenses do not necessarily need to be medically necessary or directly related to treating a condition. Many ordinary living expenses may qualify when they meet the program’s requirements.
Housing, Transportation, and Everyday Expenses
ABLE funds can help eligible individuals manage everyday expenses that support greater independence. Qualified expenses may include housing costs, utilities, groceries, transportation, and personal assistance services. For example, an individual may use ABLE savings to pay for accessible transportation to work or assistance with activities necessary for daily living.
Health, Education, and Career Development
ABLE accounts can also support personal development and long-term opportunities. Eligible expenses may include tuition, educational materials, job training, assistive technology, healthcare, therapy, and wellness services. Employment-related expenses, such as specialized equipment, may also qualify.
How Much Money Can You Put in an ABLE Account?
ABLE accounts allow contributions from the beneficiary, family members, friends, and other individuals or organizations. However, annual contribution limits and state program balance caps restrict how much money can enter or remain in an account.
Annual and Lifetime Contribution Caps
For 2026, the standard annual ABLE contribution limit is $20,000. This limit generally applies to combined contributions from all sources, rather than allowing each contributor to deposit $20,000 separately.
Each state program also establishes a maximum account balance, which varies by plan and is generally tied to the state’s qualified tuition program limit.
The maximum account balance should not be confused with the $100,000 SSI exclusion. An account may permit a larger balance even though amounts above $100,000 can affect SSI eligibility.
The ABLE to Work Provision
ABLE to Work allows certain employed account owners to contribute additional money beyond the standard annual limit.
An eligible working beneficiary can contribute additional money from their earnings, up to a limit based on the previous year’s federal poverty guideline for a one-person household. The additional contribution cannot exceed the beneficiary’s earnings for the year.
ABLE to Work can help individuals with disabilities build savings through employment while maintaining the account’s public benefit protections. However, employment earnings may independently affect SSI, SSDI, or other benefits, even when those earnings are deposited into an ABLE account.
“One of the most common—and costly—mistakes our attorneys see is naming an individual with special needs directly as the beneficiary of life insurance, retirement accounts, or payable-on-death and transfer-on-death accounts. At Evans & Davis, we carefully coordinate beneficiary designations with the estate plan and the Special Needs Trust.”
How ABLE Accounts Fit Into Special Needs Planning
An ABLE account can provide valuable financial flexibility, but it should not replace comprehensive special needs estate planning.
Families must also consider inheritances, beneficiary designations, long-term asset management, and future care needs. An attorney can provide guidance on special needs planning and incorporate these financial tools into a plan that reduces the risk of disruption of essential government benefits.
ABLE Accounts vs. Special Needs Trusts
ABLE accounts and special needs trusts can both help protect eligibility for certain means-tested benefits, but they serve different purposes.
An ABLE account generally gives the beneficiary more direct control over savings and everyday spending. It works particularly well for recurring qualified expenses, such as transportation, housing, and personal needs.
A properly structured special needs trust can hold substantially larger inheritances, gifts, or settlements without the same annual ABLE contribution limits.
Why a Comprehensive Special Needs Plan Uses Both
For families considering a special needs trust, combining it with an ABLE account may provide greater flexibility than relying on either tool alone.
A special needs trust can preserve and manage larger assets for long-term support, while an ABLE account can give the beneficiary more independence in handling qualified everyday expenses.
Setting up a special needs trust alongside an ABLE account requires careful coordination of funding, distributions, and beneficiary designations. An estate planning attorney can help families develop a strategy that establishes clear responsibilities for managing each account and adapts as their loved one’s needs change.
Plan for Your Loved One's Future With Evans & Davis
An ABLE account can help your loved one save for meaningful expenses while maintaining access to important government benefits. However, choosing the right account and coordinating it with other estate planning tools requires an understanding of eligibility rules, contribution limits, and long-term financial needs.
At Evans & Davis, our attorneys can guide you through these decisions by reviewing your loved one’s eligibility, explaining available account options, and coordinating ABLE savings with special needs trusts and other estate planning documents to create a plan suited to your family’s circumstances.
To speak with an estate planning attorney about how ABLE accounts and special needs trusts can protect your loved one’s financial future, call 866-708-2335 or contact us online today.
