After more than a decade of lobbying by families and advocates, Congress passed the "Stephen Beck Jr., Achieving a Better Life Experience Act" in December 2014. More commonly known as ABLE accounts, the program is modeled after the popular 529 college savings accounts, and it is administered by individual states.
To qualify, an individual must have been diagnosed with a qualifying disability by age 26. For this year, families can contribute up to $14,000 in post-tax dollars into the account. The principal and any gains can be withdrawn tax-free for qualifying expenses.
Walther says the tax-free component gives ABLE accounts a huge advantage over a special-needs trust, where accumulated income is subject to tax rates as high as 39 percent.
"Having a simpler account that is easily funded and easy to open such as an ABLE account will benefit Maddy in the future and provide for her future needs," said Gillespie.