Planning for a loved one with special needs requires careful thought and a well-structured estate plan. In New York, one tool that can provide significant benefits is an Achieving a Better Life Experience (ABLE) account. This type of savings account allows individuals with disabilities to set aside funds for necessary expenses without compromising eligibility for vital government assistance programs. By understanding how an ABLE account works and how to integrate it into your special needs plan, you can help secure a more stable financial future for your loved one. With that in mind, the Long Island attorneys at Eghrari Wealth Training Firm discuss incorporating an ABLE account into your New York special needs plan.
Understanding ABLE Accounts
Created under the Achieving a Better Life Experience Act of 2014, ABLE accounts offer a tax-advantaged way for individuals with disabilities to save money while remaining eligible for programs such as Supplemental Security Income (SSI) and Medicaid. Without this type of account, many people with disabilities risk losing benefits if their assets exceed the $2,000 limit imposed by means-tested programs. ABLE accounts provide several advantages, including:
- Tax Benefits: Earnings on funds in the account grow tax-free, and withdrawals for approved disability-related costs are not subject to federal taxes.
- Preserving Government Benefits: ABLE accounts allow individuals to maintain eligibility for essential programs while saving for expenses beyond what public benefits cover. SSI recipients should be aware that only the first $100,000 in an ABLE account is exempt from asset limits.
- Broad Use of Funds: Withdrawals can be used for a variety of qualified expenses, including education, housing, medical needs, employment support, and transportation.
- Financial Control: The individual with a disability, or an authorized person acting on their behalf, can manage the account, offering flexibility and independence.
Setting Up an ABLE Account in New York
To open an ABLE account in New York, the individual must have a qualifying disability that began before the age of 26. They do not have to open the account by that age but the onset of the disability must meet this requirement. New York residents can choose from different ABLE programs nationwide, including the New York ABLE Program, which offers specific benefits tailored to those living in the state. Enrolling typically involves selecting a plan, completing an application online, and funding the account. Once established, the account can be used for ongoing expenses to improve the individual’s quality of life.
Integrating an ABLE Account into a Special Needs Plan
When incorporating an ABLE account into a special needs plan, it is essential to coordinate with other estate planning tools. Proper structuring ensures the account is used effectively while protecting eligibility for critical services. Common steps when incorporating an ABLE account into a special needs plan include:
- Coordinating with a Special Needs Trust. Many families use both a special needs trust (SNT) and an ABLE account to provide financial security. A special needs trust is useful for managing larger sums of money, while an ABLE account is better suited for daily expenses. Funds from a trust can be distributed directly into an ABLE account, allowing for greater flexibility in covering immediate needs.
- Making Strategic Contributions. Annual contributions to an ABLE account are capped at $19,000 (as of 2025); however, if the beneficiary has a job, they may be eligible to contribute additional earnings beyond this amount. Family members and friends can also contribute, making it a collaborative way to ensure financial support.
- Using Funds for Approved Expenses. To retain tax advantages and protect benefits eligibility, money from an ABLE account must be used for qualified disability expenses. These include housing, healthcare, education, assistive technology, transportation, and other needs that enhance the individual’s well-being.
- Routinely Review and Update the Plan. A special needs plan should be reviewed periodically to ensure it aligns with the individual’s changing circumstances and legal updates. Laws governing ABLE accounts and government benefits can change, so staying informed is crucial. Consulting with an estate planning attorney can help ensure that all elements of the plan remain effective.
Why an ABLE Account Is a Valuable Addition to a Special Needs Plan
Including an ABLE account in a special needs plan offers unique advantages that other financial tools may not provide. Unlike a special needs trust, an ABLE account allows the beneficiary direct access to funds for daily expenses. It also serves as a valuable supplement to public benefits, covering costs that government programs do not address. Additionally, ABLE accounts provide flexibility, tax savings, and long-term security while maintaining access to Medicaid and SSI. When combined with a well-structured estate plan, they can significantly enhance the financial stability of an individual with disabilities.
Can We Help You Incorporate an ABLE Account into Your New York Estate Plan?
For more information, please join us for an upcoming FREE seminar. If you would like help incorporating an ABLE account into your New York estate plan, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.
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