• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Parman & Easterday

Oklahoma Estate Planning Attorneys

Call Now: (405) 843-6100 |
(918) 615-2700

Attend an Education Program-Oklahoma City Area Attend An Education Program in the Tulsa Area
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • What Our Clients Say
  • Estate Planning
    • Asset Protection
    • Business Succession Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • IRA and Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • Powers of Attorney
    • Probate
    • SECURE Act
    • Special Needs Planning
    • Trust Administration and Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law
    • Emergency Medicaid
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • Asset Protection Worksheet
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Edmond Elder Law
        • Oklahoma City Elder Law
        • Overland Park Elder Law
        • Yukon Elder Law
      • Medicaid
      • Nursing Home Resources
    • Estate Planning
      • An Overview of Estate and Gift Taxes
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Alzheimer’s FAQs
      • Asset Protection Planning
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Inheritance Planning for Minors
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Nursing Home Asset Protection
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • Probate Checklist
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Probate Resources
      • Midwest City Probate
      • Moore Probate
      • Oklahoma City Probate
      • Overland Park Probate
    • Published Books
    • Pre Consultation Form
  • Communities We Serve
    • Edmond
    • Midwest City
    • Moore
    • Norman
    • Oklahoma City
    • Yukon
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact Us
Home » Estate Planning » What is an ABLE Account?

What is an ABLE Account?

July 7, 2021 by Courtesy of Parman and Easterday

An ABLE account is a great strategy for someone who became disabled by age 26. An ABLE account may be income tax-free. It has other unique benefits for a disabled person. Read on to learn more about the ABLE account and how it can help.

by Steve Hartnett

ABLE accounts are like Section 529 plans. But, while 529 plans are for education expenses, ABLE accounts (under Section 529A) are for qualified disability expenses.

While a 529 plan may be set up for anyone, an ABLE account only may be set up for someone who was disabled by age 26. Unlike a 529 plan, the beneficiary may only have one ABLE account for their benefit. But, for a disabled beneficiary, an ABLE account can be priceless. An ABLE account may be set up by the beneficiary, their parent, guardian, or agent.

There may be a total of up to $15,000 in contributions from all contributors each year to the ABLE account for the beneficiary. This amount is tied to the gift tax annual exclusion, but again, it is an aggregate limit for all contributors.

While the assets are in the account, they incur no income tax. If distributions are used for the beneficiary’s qualified disability expenses, which is defined very broadly and includes housing, transportation, legal fees, health, etc., those distributions are income-tax free.

But, the unique benefit of the ABLE account is that the assets in the account are disregarded for Medicaid purposes. Further, if the balance is up to $100,000, the assets are disregarded for SSI purposes, as well. Normally, that much money would disqualify a beneficiary from both SSI and Medicaid, which are benefits which a disabled person might need for their daily life.

An ABLE account may be especially useful when used in conjunction with a special needs trust for the beneficiary. If the ABLE account is used to pay for basic living expenses, it won’t have an adverse impact on the beneficiary’s SSI eligibility. The funds in the SNT could be used to pay for other expenses.

If you or your client have a loved one who became disabled by age 26, an ABLE account may be the best choice.

Stephen C. Hartnett, J.D., LL.M.
Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com

  • Author
  • Recent Posts
Courtesy of Parman and Easterday
Latest posts by Courtesy of Parman and Easterday (see all)
  • Tis the Season for Giving - February 1, 2023
  • Tax Planning for 2023 - January 25, 2023
  • Now That Mid-Terms Are Over, Let’s Talk Taxes - January 18, 2023

Filed Under: Estate Planning, Legal Education Tagged With: 529, 529A, ABLE, disabled, Medicaid, SSI

Other Articles You May Find Useful

Estate Administration 101
wills and trusts
4 Things Trusts Do That Wills Can’t Do
advance estate planning property liquidation
Downsizing Can Be Part of Your Estate Plan
Now That Mid-Terms Are Over, Let’s Talk Taxes
ancillary probate
Prevent the Nightmare of Ancillary Probate
Common Mistakes in Estate Planning – Part V

Primary Sidebar

Parman & Easterday, LLP

DOWNLOAD OUR FREE ESTATE PLANNING CHECKLIST

SUBSCRIBE TO OUR BLOG

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Where We Are

OKLAHOMA CITY, OK
13913 Quail Pointe Drive, Suite B
Oklahoma City, OK 73134
Phone: (405) 843-6100
Fax: (405) 917-7018

MAP

parman_sidbr_map

Where We Are

TULSA, OK
Memorial Place 7633 E. 63rd Place
Tulsa, OK 74133
Phone: (918) 615-2700

MAP

parman_sidbr_map

Office Hours

Monday9:00 AM - 5:30 PM
Tuesday9:00 AM - 5:30 PM
Wednesday9:00 AM - 5:30 PM
Thursday9:00 AM - 5:30 PM
Friday9:00 AM - 12:00 PM

Footer

footer-logo

The information on this Oklahoma Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Oklahoma City Estate Planning Attorneys at Parman & Easterday offer estate planning services in the Oklahoma City, Oklahoma and surrounding areas. Contact us for help today.

Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys


© 2023 American Academy of Estate Planning Attorneys, Inc.
  • Facebook
  • LinkedIn
  • Twitter
  • YouTube