Does anyone have experience with setting up and using an ABLE account?
These are tax-advantaged accounts for disabled people. The person has to have been disabled prior to age 26, which is often the case with schizophrenia. They can be set up after age 26 as long as the family member’s psychiatrist can attest to the fact that the illness started prior to age 26.
I’m looking to find out what the paperwork/documentation requirements are for making withdrawals. E.g. does the person have to keep receipts for every dollar spent?
I opened one for my daughter. As her guardian, I had it put in my name. I got a letter from her psychiatrist, but they never asked for it. I have only made deposits, but it is possible to transfer to and from her ABLE account to her bank account and my bank account. They did speak with me about setting up another account that would have a debit card, but at that point, I didn’t want to do it.
Thanks @mmm61 for your reply. Do you know what you have to do to make a withdrawal? In Maryland it seems like you have to fill out a form saying what you’re going to use the money for.
@caregiver1, I’m in California. Here’s a screen shot of how CalABLE handles withdrawals. I understand that states have similar rules, but best to confirm what your state’s are. I’m looking into opening a CalABLE account for my son.
I’m bumping this topic to see if there is any current interest in it. ABLE accounts are like Roth IRA accounts in that withdrawals are not taxable. However, family members can gift more money to fund them. $6,500 is the limit for a Roth IRA, whereas ABLE accounts have a $17K annual limit. For Maryland ABLE, like California ABLE, I don’t think the withdrawal procedure is difficult so that the LO can get to the money easily when they need it. Any reasonable living expense is a valid withdrawal.
