ABLE Disabilities Savings Act Goes Online in Connecticut

 ABLE National Resource Center (ABLE NRC) announced today the launch of its 2020 #ABLEtoSave campaign

The ABLE National Resource Center’s logo for the 2020 ABLE to Save public awareness campaign.

The federal Achieving a Better Life Experience (ABLE) Act, which helps those with disabilities create savings or investment accounts to pay for qualifying expenses tax free, is finally up and running in Connecticut.

The ABLE Act was signed into law in 2014, and Connecticut Public Act 15-80 was passed in 2015 to implement the law by requiring the Office of the State Treasurer to establish a federally qualified ABLE program to administer individual accounts.

That system is now in place and qualified individuals can begin signing up for the tax advantage program that represents another beneficial Estate Planning tool for Connecticut families.

“There’s no limit to what people with disabilities can do. Now, that includes saving, too,” the ABLE CT website says. “With ABLE CT, you can save for qualified disability expenses without losing your eligibility for certain assistance programs, like SSI and Medicaid.”

Who Is Eligible for ABLE Accounts?

  • Those with disabilities that developed before the age of 26.
  • Also, one of the following must be true:
    You are eligible for SSI or SSDI because of a disability.
    You experience blindness as determined by the Social Security Act, or
    you have a similarly severe disability with a written diagnosis from a licensed physician.

Those determined to be eligible must re-certify annually.

What Are the Program Benefits?

  • Earnings on investments are federally tax-deferred, and tax-free if used for qualified disability expenses. (When a person’s savings is used for non-qualified expenses, the earnings portion of the withdrawal will be treated as income, and will be subject to a 10% federal tax penalty and applicable state taxes.)
  • Participants maintain their current benefits, and balances of $100,000 or less are excluded from the SSI resource limit. If an account causes a participant to exceed the SSI resource limit, SSI benefits are suspended until the account balance no longer exceeds the resource limit, but only the amount over $100,000 is counted against the limit, as are assets in non-ABLE accounts.
  • Participates continue to be eligible for Medicaid regardless of account balance.
  • Up to $15,000 per year may be contributed to an ABLE account, and account holders who earn income are allowed to exceed that amount with additional annual contributions up to the federal poverty level for a one-person household. There is a lifetime account balance limit of $300,000.
  • ABLE accounts have a Ugift® feature allowing friends and family members to contribute to the savings account. Those contributions may be deductible for state income tax.
  • Debit cards and prepaid cards may be obtained and used with ABLE accounts.

Which Disability Expenses Qualify?

Essentially, any expenses resulting from living with a disability, or meant to improve quality of life, are considered qualified expenses.

According to the ABLE CT website, examples include:

  • Education
  • Health and wellness
  • Housing
  • Transportation
  • Legal fees
  • Financial management
  • Employment training and support
  • Assistive technology
  • Personal support services
  • Oversight and monitoring
  • Funeral and burial expenses

What are Estate Planning Advantages?

ABLE Act accounts represent another advantageous Estate Planning tool for those family members with qualifying disabilities.

  • A relative with a modest inheritance or settlement funds from a legal action can avoid the process of creating a trust and instead place the funds in an ABLE Act account.

The program is not without certain complexities. The ABLE National Resource Center delineates the benefits and rules of the ABLE Act in great detail.

For example, when the account owner dies, the state Medicaid agency is a creditor for the medical assistance paid under that state’s Medicaid program on behalf of the account owner from the time the account was established.

Cramer & Anderson’s Estate Planning, Probate, and Trust Administration attorneys are positioned to fully explain details of the ABLE Act and how participation may fit into an overall estate plan for families with disabled members.

Our Estate Planning team focuses on each client’s individual goals with a priority on preserving wealth and assets before and after death, including protecting assets from Medicaid.

We also handle administration of trusts and estates after the implementation of an estate plan, as well as assisting families in all aspects of the probate process, including disputes.

Reach out to a member of the Estate Planning team in any of our regional offices:

New Milford: Arthur C. Weinshank

Kent: Dolores R. Schiesel

Washington Depot: Robert Fisher, Jr.

Litchfield: Perley Grimes and Neal D. White, Jr.

Danbury and Ridgefield: Joshua Weinshank


Working With Cramer & Anderson

Our attorneys and staff are working in our offices, where proper sanitation and social distancing measures remain strictly observed amid the COVID-19 coronavirus, as well as remotely.

Attorneys are available as usual by phone or email, and are also connecting with clients using technology such as Zoom. For more information, see the firm’s website or call the flagship office in New Milford at (860) 355-2631. Other regional offices are located in Danbury, Ridgefield, Kent, Washington Depot, and Litchfield.