By Joel Krooks, Esq.

Individuals with disabilities can now contribute $18,000 annually to their ABLE account, an increase from the $17,000 limit in 2023. Money in an ABLE account can be used toward qualified disability expenses, which include education, housing, transportation, employment training and support, health, funeral and burial, basic living expenses and legal fees.

An advantage to ABLE accounts is that individuals with disabilities can open up ABLE accounts on their own, unlike most special needs trusts. This feature gives individuals more control over the funds, rather than asking a trustee to disburse the funds according to the terms of a trust. Furthermore, individuals can save up to $100,000 in ABLE accounts without those funds counting against their eligibility for programs such as Supplemental Social Security (SSI). However, one drawback is depending on the state, an ABLE account may be subject to Medicaid payback upon the beneficiary’s death.

In order for an individual to be eligible to open an ABLE account, the individual must have a disability within the meaning of the Social Security Act and the individual had to develop the disability prior to age 26. The Social Security Act defines a disability as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. Furthermore, the eligibility requirements will change at the beginning of 2026. Starting January 1, 2026, individuals with a disability will be eligible to open an ABLE account if they develop a disability prior to age 46.

We at Littman Krooks can help you decide if an ABLE account is right for you or a loved one. Contact us today to discuss.