You can compare ABLE accounts in different states to determine if this new planning tool is right for you. The Achieving a Better Life Experience (ABLE) Act, passed in 2014, allows people with disabilities to save money in an account that is not counted against public benefits eligibility. So far only 17 states have created ABLE programs. People who do not live in one of these states can still have an ABLE account by opening one in a state that allows non-residents to participate.
ABLE accounts have both advantages and disadvantages when compared to a traditional special needs trust. The IRS treats ABLE accounts much like 529 education savings accounts. Like 529 accounts, ABLE accounts have significant tax benefits compared to traditional investment plans. However, individuals must have been disabled before the age of 26 to be eligible. The disability must also meet the requirements for either the Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) programs and the individual must be receiving those benefits or certify that he or she has the documentation of a physician regarding disability.
Compare ABLE Programs Available Nationwide
We’ve already written about the upcoming Louisiana program. Here are details to compare ABLE accounts in three states that allow out-of-state residents to open accounts:
Michigan launched the MiABLE program on November 1, 2016. There are five different investment options for MiABLE beneficiaries that vary in degree of risk and in cost. This means that you have the option to grow your money in a way that suits your risk tolerance. Michigan also allows for a state income tax deduction of $5,000 for individuals and $10,000 for joint filers. Another interesting feature of the account is that MiABLE has given beneficiaries the ability to create public profiles to solicit donations from friends, family, and even strangers, similar to the format used for websites like GoFundMe.
Oregon launched its national program called ABLE for All in 2016. The program offers three investment options: Conservative, Moderate and Aggressive. There is also an FDIC-insured cash option that is appropriate for those planning on spending money from the account in the near future. ABLE for All will also soon be launching prepaid cards that beneficiaries can use to access their funds. An interactive website dashboard allows beneficiaries to set savings goals for themselves.
Virginia opened ABLE Now Virginia in 2016 and it is available nationwide to eligible individuals regardless of their state of residency. The account offers an ABLEnow Debit Card that gives individuals immediate access to their account. The plan automatically allocates the first $2,000 deposited in the account to the the debit card. Like Oregon’s ABLE for All, Virginia’s account offers three investment options — Conservative, Moderate and Aggressive — as well as a money market account that is 100 percent cash and cash equivalents.
Resources to Compare ABLE Accounts in more states
These are just three of the ABLE account options available in other states. The ABLE National Resource Center website lists available state programs with information to compare ABLE accounts. An individual cannot have more than one ABLE account, so it is important to do your research when selecting which one is best for you. If you have questions, contact us for help.
Revised and published with permission from the American Society of Special Needs Planners.