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ABLE accounts (also referred to as STABLE accounts in Ohio) are tax advantaged savings accounts will allow individuals with special needs and their families to save for “qualified disability expenses” in the same way that a 529 plan allows families to set aside money for college expenses. The funds accumulated in the ABLE account will not disqualify the beneficiary for needs-based public benefits such as SSI, Medicaid, Section 8 Housing, and food stamps.
Why would an ABLE account be needed?
Public benefits such as SSI and Medicaid are “needs-based”. To qualify, a person must have limited assets. To avoid jeopardizing their benefits, people live in a chronic state of poverty. They cannot save for big purchases.
The ABLE account can allow beneficiaries with small savings to qualify for Medicaid. It can give those on SSDI or SSI recipients with part-time jobs an easy place to accumulate excess earnings. Family members will be able to make small gifts to encourage independence.
Who qualifies for an ABLE account?
As of January 1, 2026, to qualify for an ABLE account an individual must be disabled as defined by Social Security standards and the disability must have begun prior to the age 46 (prior to 2026 the age was 26). The beneficiary must be a US citizen or legal resident. Contributions can be made by anyone (the account beneficiary, family or friends).
What expenditures are allowed?
A “qualified disability expense” can include education, living expenses, housing, transportation, employment training and support, assistive technology, health care expenses, funeral costs, legal fees, financial management costs. These expenses can enhance the beneficiary’s quality of life by providing goods and services not covered by public benefits.
Are there limits as to how much money can be put in the ABLE account?
Each beneficiary can have only one ABLE account. Total contributions to the account can be no more than the annual gift tax exclusion ($19,000 in 2026) and if employed up to $15,060 more. If the ABLE account balance exceeds $100,000, SSI income will be suspended until it is reduced, but other programs won’t be affected. Each state that adopts an ABLE program will set a maximum limit on the account.
What happens when the ABLE account beneficiary dies?
When the beneficiary dies, the money in the account must first be used to reimburse the state for expenses paid by Medicaid. If Medicaid recovery does not exhaust the funds, the remainder may go to a named beneficiary or by the terms of their last will and testament.
Who can open an ABLE account?
A beneficiary over the age of 18 can open their own ABLE account. If the beneficiary is unable to then an Authorized Legal Representative can open an account for them. This can be a Power of Attorney, a conservator or legal guardian, or a spouse, parent, sibling, grandparent; or are a representative payee (individual or organization), in that order of priority.
How is the ABLE account money managed?
Accounts can be easily managed online. Many ABLE accounts come with a form of prepaid debit card the beneficiary can use. This card can have added controls added over what the beneficiary can buy for further protection. Funds can be held in the account or invested in mutual funds or other investment opportunities the account offers. The account’s growth is tax-free, and your contributions may qualify for a state income tax deduction.
How is an ABLE account different than a Special Needs Trust or Pooled Trust?
The ABLE account will cost less to establish and maintain than a Special Needs Trust or Pooled Trust and will allow beneficiaries to control their own money. This will make the ABLE accounts much more flexible and accessible. Funds in the account may also be more susceptible to misuse and penalty as they will lack the oversight of a Trustee. Trusts will still be better suited for large personal injury awards and inheritances. For some a combination of an estate plan including both an ABLE account and a Special Needs Trust may be appropriate. When dealing with disability benefits planning you should speak to a certified Elder Law Attorney or Certified Specialist in Estate Planning, Trust and Probate Attorney.
Where can I establish an ABLE account?
You will be able to establish an ABLE account in any state that has an established program, but only one account can be established per beneficiary. Each state will determine which financial institutions will administer the ABLE accounts. For more information on Ohio ABLE accounts visit www.stableaccount.com. To compare state plans, visit www.ablenrc.org/compare-states
Prepared by:
Kyla A. Williger, CELA
Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.
330-686-7777