Does an ABLE account take the place of a special needs trust?
No. ABLE accounts are new tax-advantaged savings accounts for individuals with disabilities. They allow individuals to save money without their funds being considered for purposes of qualifying for government benefits. The individual’s disability must have onset before the individual was age 26. The max amount you can currently keep in an ABLE account without it being counted toward government benefit income requirements is $100,000. There is also a payback provision, meaning if the individual passes away while money is still in the account, it must go to payback government benefits. For these reasons, ABLE accounts may be an attractive option for individuals with disabilities who want to save and spend money from a job, or save and spend money gifted to them by family and friends, but is not the appropriate vehicle to receive an inheritance.