If you are caring for a loved one with a disability, your focus extends beyond the present. As their provider, one of your worries is balancing their financial security with continued access to essential benefits.
In Washington, the Achieving a Better Life Experience (ABLE) Act offers a way to bypass this concern. Understanding what this means for your family is key to helping them create a secure financial future.
The strategic benefits of an ABLE account
Your loved one relies on benefits, such as Supplemental Security Income (SSI) and Medicaid, for livelihood and health care support. However, qualifying for these requires them not have assets worth more than $2,000.
Creating an ABLE account can help your family member build their finances while meeting state limits for federal benefits. Any amount of funds up to state limits does not disqualify them for Medicaid, and the first $100,000 in an ABLE account is disregarded when calculating SSI eligibility. Additionally, they can invest the money in the account, and any earnings grow tax-free.
Through this account, your beneficiary can use the funds for qualified disability expenses (QDEs), including housing, transportation, health and basic living expenses.
The requirements for an ABLE account
You must verify whether your loved one is eligible for an ABLE account. Generally, they may have one if they live in Washington State and developed a disability before the age of 46. If they cannot open an account, an Authorized Legal Representative can do it on their behalf.
The account creation process mainly occurs online. Your loved one may need to provide their basic information regarding their qualifying disability and their account’s fund sources.
Integrating ABLE into your strategy
While ABLE accounts are versatile, they work best when paired with other tools like Special Needs Trusts. Because every family’s financial landscape is unique, it is wise to consult with an experienced estate planning attorney. A professional can help you structure these tools correctly, ensuring your plan is both legally sound and tailored to your family’s heart.
