An ABLE account is a tax-advantaged savings accounts that qualified individuals with disabilities will have the option of opening soon with the recent passage of the ABLE Act of 2014. Earnings on ABLE accounts will not be taxed and contributions can be made either by the account beneficiary or family members and friends. One of the biggest features of ABLE accounts is that they will shelter savings from the $2,000 asset limit used for public benefits (SSI, MediCal, etc) allowing individuals with disabilities to save and pay for essential expenses while still being able to access much needed services. ABLE accounts operate similar to special needs trusts but with important differences.
This great New York Times Article looks at the pros and cons of ABLE accounts with information about when to expect them to be available.
In addition, a law was just passed that permits families to subscribe to ABLE account outside of their states of residence. A full list of where to get ABLE accounts can be accessed here.
And lastly, the chart below, developed by our partner the Los Angeles Jewish Abilities Center, gives a really clear distinction between special needs trusts and ABLE accounts and why both could be good options for your family.