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What Are ABLE Accounts?


One of the problems for people with disabilities is that many government programs are means tested. Consequently, a disabled person with too much money jeopardizes their ability to receive government assistance. If they receive a generous gift from a family member or an inheritance, they might be disqualified.

Fortunately, the government stepped up and created special bank accounts for certain disabled individuals. In Florida, they are called ABLE United, and they are available for only Florida residents. Our estate planning attorney in the Villages looks closer.

Do You (or a Loved One) Need an ABLE Account?

When disabled people apply for disability benefits, the money in their bank account counts as an asset. Consequently, they can lose out on benefits that they otherwise would qualify for. In a sense, disabled applicants are being penalized for planning ahead by saving money.

As experienced estate planning attorneys, we are aware of the many ways to get around this. One option is to create a special needs trust. This is a critical estate planning tool; however, the money is controlled by the trustee and not the disabled individual.

With an ABLE account, the disabled individual controls the money. They can decide when to withdraw it, and they do not need anyone’s permission to access it.

If you are making a gift to a disabled individual while you are alive, consider whether they need to create a special bank account, called ABLE United account in Florida.  You can contribute up to $15,000 a year.

Does the Money Just Sit in the Account?

In Florida, you have the option of investing the money that you deposit. This option allows the amount you deposit to potentially grow tax-free, much like an IRA or 401(k) would grow. You can invest in stocks, bonds, money markets, and other investments.

Any money you withdraw is tax free if spent for a Qualified Disability Expense, such as housing, transportation, legal fees, health, and assistive technologies. This is a huge advantage, since most of a disabled person’s expenses probably qualify for tax-free withdrawals.

Can You Open an ABLE Account?

Not every disabled person can create one. You must have a disabling condition before the age of 26, so this is a program for those who were disabled while young. You can use the Disability Wizard at the state website to determine whether you are eligible.

How Will an ABLE Account Affect Eligibility for Government Programs?

It can help you qualify for Medicaid and Supplemental Security Insurance (SSI). For example, SSI has a $2,000 resource limit. However, you do not have to count up to $100,000 in your ABLE United account.

When it comes to Medicaid, none of the money in the account will count.

How Much Can You Deposit in a Year?

Generally, you or a family member can deposit up to $15,000. If you are working and not saving for retirement, then you can invest even more than $15,000.

Contact Us to Learn More

Many of our clients consider making ABLE deposits as part of their estate plan. Giving gifts can have certain tax advantages that our clients want to take advantage of. To learn more, contact Millhorn Elder Law Planning Group today for a free consultation.


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