As a person with disabilities or a family member, you already know how difficult it can be to navigate the laws surrounding people with different needs. Earning and saving money can be complex, and many people with disabilities struggle to ensure they are taking the right steps to save money.
An ABLE account may be exactly what you and your family needs, but what do you need to know about these accounts? If you have questions, the team at The Germany Law Firm can explain why an ABLE account or other options are best for you and how to start saving today.
What is an ABLE Account in Colorado?
An ABLE account is a savings account that allows people with disabilities to save money without losing their Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). Individuals who receive these benefits have certain limits to their accounts, including how much money may be in that account. ABLE accounts make it possible to save more and improve your family’s quality of life.
These accounts also have different rules regarding their taxable status. ABLE accounts may not be taxed, but funds can be added by a number of parties, including:
- The account beneficiary
- Family of the beneficiary
- Friends
- Special needs trusts
- Pooled trusts
These accounts can give people with disabilities more financial freedom, allowing them to make more choices about their lives.
What is the Difference Between an ABLE Account and a Special Needs Trust?
The families of people with special needs may have already chosen to create a special needs trust. These trusts offer some of the same advantages, specifically being able to shelter financial assets without losing SSDI or SSI benefits. However, a person may have both types of accounts, and they may receive different benefits from each.
For example, ABLE accounts are cheaper and easier to set up, and they have fewer restrictions on use. For example, a special needs trust cannot be used for basic living expenses or housing. Your ABLE account can be used for these purposes. However, these accounts may not be best for large, long-term savings accounts because they do have a cap, which is where a special needs trust can help.
Unsure what account is best for your needs? Talk to an attorney about your options. They can refer to your specific circumstances and get answers for your particular case.
Who Can Use an ABLE Account?
Before you open an ABLE account, you need to know who can access and use this money, not just who can provide funds for it. These accounts are used by people with disabilities who receive or are entitled to SSDI or SSI, and whose disability was present before they were 26 years old. These accounts can help the families of those with disabilities manage and save for their family members.
If you have any questions about who is allowed to use this account, be sure to discuss your concerns with your attorney. Your lawyer can guide you through properly using this account and making the most of this opportunity for saving and managing money.
For those who are eligible, you can use your account to save up to $17,000 per year. Those funds can add up, allowing you or your family to create a safety net that can be used more broadly than other savings options, like trusts. Talk to your family if you believe you can use this account for your needs.
How is an ABLE Account Set Up?
Ready to set up an ABLE account? You can have yours in only a few steps.
You simply need to complete Colorado’s ABLE account application process to apply. If you need help, assistance can be reached through their phone or email to complete your application. You may also ask your lawyer questions if you are unsure about any part of your case.
Keep in mind that this form must be used by legal guardians, conservators, or agents designated through power of attorney. You may also need to provide evidence that you are legally responsible for the person you are completing this information for.
Call The Germany Law Firm About Your Colorado ABLE Account Today
If you believe your family is eligible for an ABLE account, you may have an opportunity to open an account for yourself or a loved one that allows them to save more money than they would otherwise. This give you and your family more freedom and opportunities than you would otherwise.
At The Germany Law Firm, we understand that the application process can be complex. That’s why we are here to help you understand whether you are eligible, how to get in contact with the right parties, and ensure you are taking the right steps to get the right account for your family. When you are ready, reach out for help by calling (303) 454-3711 or filling out our online contact form to get personalized information about your case.
