When Catherine Beck's daughter, Natalie, was born with Down syndrome, she knew her expenses would be exorbitant. "She would always need support, supervision, transportation, help for work and we really did need to save as much as we could," Beck said.
Catherine and her late husband, Stephen Beck Jr., shopped around for a savings plan and with limited options they started a special-needs trust for Natalie, but were taxed at a very high rate (trusts can be taxed at the highest federal rate of 39.6 percent).
The Becks became passionate about finding a more affordable alternative and were ultimately instrumental in the creation of the federal Achieving a Better Life Experience (ABLE) Act, which passed in 2014.
More commonly known as ABLE accounts, they are tax-advantaged savings accounts for individuals with disabilities and their families, which are modeled after state-sponsored 529 college savings accounts, and administered by individual states.
The money in ABLE accounts grows and can be withdrawn tax-free and the funds can be used for a variety of expenses, from housing to long-term health care, all without any limitations on the number of withdrawals.
Two years later to the day, the Beck's home state of Virginia launched its own ABLE savings program, ABLEnow, administered by the state's college savings plan, Virginia529, which has $57 billion in assets under management and 2.4 million in college accounts.
Virginia, along with Ohio, Tennessee, Michigan, Oregon, Florida, Kentucky and Nebraska, are among the first states in the country to offer ABLE accounts. At least a dozen more states are likely to follow by mid-2017, according to Christopher Rodriguez, the senior public policy advisor at the ABLE National Resource Center.