What is an ABLE account?
The Achieving a Better Life Experience (ABLE) Act was passed by Congress in 2014 to allow people with disabilities to build savings accounts without affecting their eligibility for government services. Generally, money accrued in an ABLE account can only be used to pay for disability-related expenses, but what this means is fairly broad, and includes anything from housing, transportation, and daily living expenses to equipment, therapies, and education. In California, the ABLE program is called CalABLE. Unlike ABLE accounts in other states, where the maximum amount cannot exceed $100K, CalABLE accounts can grow up to $529,000. (Note that while Medi-Cal benefits are not affected by any amount of money held in an ABLE account, a balance over $100,000 will jeopardize an individual’s Supplemental Security Income and other government benefits.) Ideally, you’ll create both an ABLE account and a special needs trust, as they each offer different advantages.
For more information about providing for your child while preserving their access to government benefits, see our article Creating a Special Needs Trust.