ABLE Accounts in Florida: A Savings Plan for Disability Costs

Florida's ABLE program, ABLE United, helps those with special needs save money while remaining eligible for disability benefits.

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Florida established one of the first ABLE programs in the nation. It’s called ABLE United, and it’s for Florida residents only. See below for details about Florida’s ABLE United.

ABLE accounts are bank accounts that allow people with special needs to save money without jeopardizing their disability benefits. ABLE accounts come from the federal ABLE (Achieving a Better Life Experience) Act, but they are established and managed on a state level.

Not all states have ABLE accounts (yet), and each state will have slightly different rules and procedures for opening and using an ABLE account.

Save Money Without Penalty

When people with special needs apply for disability benefits, they must show that they do not have enough money to support themselves independently. Any money a person has in a traditional bank account count against that person’s ability to qualify for disability benefits.

As a result, people with special needs are not able to build savings with the money they earn or that they receive through inheritance or gifts. On a day-to-day basis, this means that people with special needs must live with very little money if they want to receive government aid.

One workaround for this issue is to use a special needs trust which provides a place to save money that can be used for the benefit of the person with special needs (without affecting his or her eligibility for benefits). But special needs trusts must be controlled by a trustee – not by the person with special needs who benefits from the trust. Not only does this leave a person with special needs with little control over his or her finances, it also limits the person’s independence.

ABLE accounts fill this gap by giving people with special needs the opportunity to manage a modest bank account without penalty against their eligibility for SSI, Medicaid, or other government benefits.

Federal Rules for ABLE Accounts

The basic rules for all ABLE accounts come from the federal ABLE Act. (Read the federal act here: https://www.congress.gov/bill/113th-congress/house-bill/647/). When states adopt and implement the ABLE Act, they must follow the federal rules and can also add their own rules and regulations. Here are some of the federal rules:

  • Disability qualifications. To qualify to use an ABLE account, an individual must have a disabling condition that began before age 26.To qualify to use an ABLE account, an individual must have a disabling condition that began before age 26.
  • Only one account. Each person can only have one ABLE account.
  • Anyone can put money in the account. Anyone can contribute money to an ABLE account, including the owner with a disability.
  • Contributions are capped annually. The limit for 2019 & 2020 is $15,000.
  • For many, the account cannot exceed $100,000. For those who qualify for SSI, the balance of an ABLE account cannot exceed $100,000.
  • For those who do not qualify for SSI, see the state rule, below.
  • Use of funds is limited. Funds in an ABLE account must be used for Qualified Disability Expenses (QDE) -- expenses that are “related to the blindness or disability” of the account holder.
  • Account funds are not taxed if used properly. The income earned from the funds in ABLE accounts is not taxed. Contributions are made with post-tax dollars, and distributions made for QDE are tax-free.
  • Unused funds pay Medicaid. When a person with a disability dies, any funds remaining in an ABLE account will be used to reimburse Medicaid for services the person received from that program. However, Florida does not apply this rule. See below.
  • Read more about the federal rules for ABLE Bank Accounts.

ABLE Accounts in Florida

Here are some details about Florida’s ABLE account.

  • Common name: Florida ABLE, Inc. doing business as “ABLE United
  • Website: http://www.ableunited.com/
  • Statute: Florida Statutes §109.986
  • Program manager: Florida ABLE, Inc. (d/b/a “ABLE United”) a registered not-for-profit and direct support organization of the Florida Prepaid College Board to administer the ABLE United Program.
  • Investment manager: BlackRock, Inc, Florida PRIME, the Vanguard Group, Inc, BNY Mellon
  • Account limit: $418,000 ($100,000 to maintain eligibility for SSI)
  • Open to out-of-state residents: No
  • Minimum amount to open an account: $25
  • Investment options: Eight investment options with varying risk
  • Debit card available: No
  • Account fees: No monthly account fee if you receive statements electronically (Additional $10.00 annual fee for paper account statements.); $1.25 monthly fee if you sign up for a prepaid card, once available.
  • Annual account balance fees: 0.290% of account balance (0.035% for the money market option)

In addition to the $15,000 annual contribution, if you're working, you can contribute the lessor of 1) your annual salary before tax or 2) up to $12,140 unless you or your employer contribute to your defined contribution plan, deferred compensation plan, or an annuity. Read more about these rules here.

A change in Florida law in 2019 abolished Medicaid recovery from ABLE accounts. Any remaining funds in an ABLE account must first be used for qualified disability expenses (including burial and funeral costs) and then transferred to the account holder's estate.

You can learn about and compare ABLE accounts across the country at the website for the ABLE National Resource Center.

An ABLE account is just one planning tool for people with special needs. You might also be interested in learning more about Special Needs Trusts or Estate Planning in Florida on Nolo.com.

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