An expansion of a program for individuals with disabilities may give financial advisors opportunities to help set up clients and their families without affecting other government benefits.
Starting in 2026, the age at which a person's disability can be determined to meet federal requirements for an ABLE account will increase from 26 to 46. This is expected to increase the number of eligible individuals by 6 million, including 1 million veterans, according to the ABLE National Resource Center. The Achieving a Better Life Experience Savings Plans allow those with qualified disabilities to save up to $100,000 tax-free.
ABLE accounts are administered through states and can be set up online. All states except for Idaho, North Dakota, South Dakota and Wisconsin offer the program, though some programs do not require account holders to live in the state where they set up an account. The National Association of State Treasurers announced on June 13 an
"ABLE accounts are a powerful savings tool, and we want as many people as possible to know about them and take advantage of their great benefits," said Stacy Garrity, Pennsylvania's state treasurer chair of the ABLE Savings Plans Network, a group formed by NAST.
The search-and-compare tool consolidates information about program fees, account balance restrictions, state tax benefits and residency restrictions, which vary by state.
"I think it just really opens up the door to this community and says, 'It's not just about up until your 20s,'" said Kelly Piacenti, assistant vice president with MassMutual, based in Somerset, New Jersey. "This will go into people in their late 40s, which is fantastic because we work with many families that have a traumatic brain injury or a car accident, and therefore they can't have an ABLE account because they're out of the age limit. So I think it offers more opportunities for the disabled community."
The Achieving Better Life Experience Act, the legislation that created the accounts in 2014, was the first bill passed in Congress concerning Americans with disabilities since the landmark Americans with Disabilities Act of 1990. The ABLE Age Adjustment Act was adopted in November 2022 as part of the Omnibus Spending Bill.
"Telling people about the ABLE Age Adjustment Act is one of our top priorities — and one that I'm personally invested in," said Garrity. "I know too many of my brothers and sisters in the military who became disabled while fighting for our country, often after age 26. I want every one of them to know that the age limit for onset of a disability is increasing to 46 on January 1, 2026."
Anyone, including family members and employers, can contribute to an ABLE account. Some states offer tax deductions or income tax credits to contributors.
"The ABLE account is usually my first thing that I recommend to people just because of the simplicity of getting it up and going," said Matthew Ricks of Long Island, New York-based Haystack Financial Planning, an RIA that focuses on the disabled community.
ABLE accounts allow individuals with disabilities to withdraw funds to use for qualified expenses such as health care, housing and living expenses, transportation, education, assistive technology, personal support services, employment training and support and legal fees.
Some states allow individuals with disabilities to use funds through debit or purchasing cards.
Piacenti pointed out that for clients who work with fee-based estate planners, ABLE accounts can be used to pay for their services.
Use of an ABLE account does not affect eligibility for other benefits like Medicaid, federal housing benefits or Social Security as long as the account balance is under $100,000.
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ABLE can complement other estate planning tools for individuals with disabilities such as special needs trusts or life insurance policies.
"If the person is relatively young, it's tough for the family to think in terms of someone passing away at a young age," Piacenti said. "A lot of people with disabilities 20 to 30 years ago didn't outlive their parents. Now they will outlive their parents. So it is challenging for a family to think of them leading a life without the person that takes care of them being there."
Piacenti said ABLE accounts, unlike special needs trusts, can duplicate government benefits like food and shelter.
Funds in 529 education savings accounts can be put into ABLE accounts and vice versa.
"ABLE really helped us in the sense that there are plenty of people with disabilities that go on to further education, and some of the things that the 529 can be used for in an ABLE is very similar, but it doesn't disqualify the person," Piacenti said.
Funds in ABLE accounts can also be transferred to other family members with disabilities.
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Expanding knowledge about how clients can use ABLE accounts is a potential growth area for advisors.
"I've had numerous conversations with other planners and advisors," said Ricks. "And kind of a similar conversation we're having, it's like, 'I didn't know these existed. I've got a family.' There's a little bit of lack of awareness there where most advisors know 529 plans; it's the same legislation just for different kinds of community, different individuals."
Working with an advisor can give families guidance in how to best utilize an ABLE account.
"My experience with the ABLE account is, a lot of times if you have parents saving for their child, how do you incorporate that ABLE account into the broader plan? Because that's not as clear cut," said Ricks.
However, there are some limitations to ABLE accounts.
Annual contributions to the account cannot exceed the annual gift tax exclusion of $18,000.
Piacenti said that excluding 13 states, ABLE has a payback provision that allows the government to cover outstanding payments toward benefits like Medicaid after the account beneficiary passes away.
"So what I say is be aware of some of the loopholes, that you may potentially have to pay back the government when the person passes," Piacenti said.
Individuals can only have one ABLE account, whereas they can have multiple special needs trusts in the form of first- and third-party trusts, depending on where the property funding the trust originated.
"They're not perfect, same as 529, same as 401(k)s. They're not a magic bullet," Ricks said.
Piacenti said that families considering special needs planning services should look for a chartered special needs consultant, a credential offered by the American College of Financial Services, to ensure that their advisor is well-informed.
Ricks agreed that advisors should seek the advice of external financial advisors who specialize in planning for clients with disabilities.
"I'm a big believer in, 'When you don't know, go find an expert,'" Ricks said. "There are a number of planners like myself who are solely focused on serving this community. I'm certainly not the only one."
