How ABLE Accounts Can Be Used in Massachusetts

An ABLE account offers individuals with disabilities a powerful way to achieve greater financial independence. These accounts allow families to save for the future without risking eligibility for government benefits. With tax-free growth and flexible use for a wide range of expenses, ABLE accounts help reduce financial stress while improving quality of life. For Massachusetts residents, understanding how to maximize the benefits of ABLE accounts can make a significant difference in long-term planning.

How ABLE Accounts Work

ABLE accounts, or Achieving a Better Life Experience accounts, are designed to help individuals with disabilities save money while maintaining eligibility for government benefits. To qualify, the individual’s disability must have been diagnosed before age 26. Contributions to the account can come from anyone—family, friends, or the individual themselves—but are capped at $18,000 annually (as of 2024).  

One of the most attractive features of ABLE accounts is their tax benefits. Funds grow tax-free, and withdrawals used for qualified disability expenses are not taxed. These accounts also protect eligibility for benefits like Supplemental Security Income (SSI) and Medicaid, provided the account balance doesn’t exceed $100,000 for SSI.  

In Massachusetts, residents can take advantage of the Attainable Savings Plan, which offers ABLE accounts tailored to local needs. These accounts provide an accessible and practical way to achieve financial stability while supporting long-term goals and daily needs. 

What Can ABLE Account Funds Be Used For?

ABLE account funds can be used for a variety of qualified disability expenses that improve an individual’s quality of life. These funds offer flexibility while protecting access to government benefits. Common uses include:  

  • Housing: Rent, utilities, and home modifications.  
  • Education: Tuition, books, and training programs.  
  • Transportation: Public transit, vehicle modifications, and ride services.  
  • Health and Wellness: Medical expenses, therapy, and assistive devices.  
  • Daily Living Needs: Basic living expenses and personal support services.  

This versatility allows individuals and families to cover essential costs while planning for future financial needs. 

ABLE Accounts vs. Special Needs Trusts: Key Differences

ABLE accounts and special needs trusts (SNTs) both help individuals with disabilities protect their eligibility for government benefits while saving for the future. However, there are key differences to consider:  

  • Eligibility: ABLE accounts require the disability to have been diagnosed before age 26, while SNTs have no age requirement.  
  • Contribution Limits: ABLE accounts have an annual contribution cap of $18,000 (2024 limit), whereas SNTs can accept unlimited contributions.  
  • Control: ABLE accounts are managed by the individual or a designated representative, offering more personal control. SNTs are managed by a trustee.  
  • Tax Benefits: Funds in ABLE accounts grow tax-free, and withdrawals for qualified expenses are not taxed. SNTs do not offer the same tax advantages.  

While ABLE accounts are ideal for everyday expenses and smaller savings, SNTs are better suited for larger inheritances or settlements. Many families benefit from using both tools together. 

The Benefits of ABLE Accounts for Massachusetts Residents

ABLE accounts provide individuals with disabilities and their families a way to achieve financial independence without jeopardizing access to government benefits. In Massachusetts, residents can open accounts through the Attainable Savings Plan, offering tailored options to meet local needs. With tax-free growth and flexible spending for qualified expenses, these accounts empower individuals to manage their funds while covering essential costs like housing, education, and healthcare.  

By reducing financial stress and encouraging savings, ABLE accounts help families plan for both daily needs and future goals. They provide a practical and accessible way to support long-term security and independence. 

How We Can Help You Plan for the Future

At Surprenant & Beneski, P.C., we work closely with individuals and families to create tailored plans that meet your unique needs. Whether you’re considering an ABLE account, a special needs trust, or a combination of both, we’ll help you understand your options and choose what’s right for your situation.  

Our goal is to ensure your loved one’s financial security and preserve access to vital benefits. We’ll guide you through each step, making the process as straightforward as possible. Contact us today to explore how we can help you secure a brighter financial future for your family.