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Special Needs Planning: Should we set up an ABLE account?

What is an ABLE Account?

An Achieving a Better Life Experience (ABLE) account allows people with disabilities who became disabled before they turned 26 to set aside up to $15,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. This money can come from the individual with the disability or anyone else who may wish to give the individual money.

ABLE accounts can be used to pay for qualifying expenses of the beneficiary, such as the costs of treating the disability or for education, housing and health care, among other things. Information on Pennsylvania’s ABLE account can be found here.

Although it may be easy to set up an ABLE account, there are many hidden pitfalls associated with spending the funds in the accounts. In addition, ABLE accounts cannot hold more than $100,000 without jeopardizing government benefits like SSI.

Who is Eligible?

  1. Individual must have a qualifying disability, which is demonstrated by one of the following:
    • Entitlement to Supplemental Security Income (SSI) benefits based on blindness or disability; or
    • Entitlement to Social Security Disability Insurance (SSDI) benefits based on blindness or disability; or
    • Self-certification of a similarly severe disability, if not entitled to SSI or SSDI. Demonstrated by the following:
      • Blindness as defined by the Social Security Act (SSA); or
      • A medically determinable physical or mental impairment with marked and severe function limitation that has lasted, or is expected to last, at least 12 continuous months or result in death; and
      • Have a written disability-related diagnosis signed by a physician.
  1. The qualifying disability must have started prior to age 26.

For more information on eligibility visit:

Who can open the PA ABLE Account?

  1. An adult eligible individual with the legal capacity to enter into contracts must open the account for themselves
  2. If the individual is a minor, or a person without legal capacity to enter into contracts, then the account can be opened by an “Authorized Individual.” The authorized individual acts as a fiduciary and controls the account for the benefit of the eligible individual:
    1. A parent
    2. A guardian
    3. Agent under a POA

Is an ABLE Account right for me?

Special Needs Planning is a complex area of the law, and each plan should be tailored to the client’s individual needs. An ABLE account is a great option in certain situations, however an ABLE account is not the answer for all planning needs.

To meet with a Special Needs Planning Attorney and discuss whether an ABLE account is the right fit for your situation, please contact OWM Law at 610-323-2800.

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