Reed: 2026 changes ABLE accounts benefit potential beneficiaries

Sandra Reed

Guest columnist

Life Care Planning

Jess sustained serious injuries in an automobile account when he was 35 and has not been able to work since.

He qualified for Social Security Disability (SSDI) based on his payments into the system when he was working and is receiving monthly benefits. Does he qualify for establishing an Achieving a Better Life Experience (ABLE) account?

What are ABLE accounts?

ABLE accounts allow a person to establish an investment account intended to be used for Qualified Disability Expenses which allow earnings to be accumulated on a tax-deferred basis.

Also, withdrawals used for Qualified Disability Expenses are exempted from federal income tax. Even more importantly, these accounts are allowed up to certain dollar amounts without loss of governmental benefits.

What are the qualified disability expenses?

"Qualified Disability Expenses" (QDEs) that improve health, independence, and quality of life, covering broad categories like housing, education, transportation, employment, health/wellness, assistive technology, personal support, financial management, and legal/funeral costs, essentially any expense related to living with a disability, including basic living costs like food.

Who is eligible to open an ABLE account?

The individual opening an account in Texas must be a Texas resident, have a disability proved through (1) SSDI or Supplemental Income Insurance (SSI); (2) a physician's diagnosis; or (3) through Compassionate Allowance Conditions.Prior to Jan. 1, 2026, the onset of the qualifying disability had to be present prior to the age of 26. As of that date, the presentation age has been raised to 46.

Since Jess' disability onset occurred at age 35, up until the first of this January, he could not qualify to open an ABLE account. However, now he can.

According to the National Academy of Elder Law Attorneys (NAELA), this change in onset age is estimated to increase the number of individuals eligible for ABLE accounts from 8 million to 14 million.

Who can contribute to an ABLE account?

The beneficiary of the account is the disabled person. However, contributions to an ABLE account can be made by anyone, including the account owner, family, friends, employers, or trusts.

How much can be contributed to an ABLE account?

Beginning in 2026, the annual contribution limit to an ABLE account had been raised to from $19,000 to $20,000. The maximum amount that an ABLE account can hold in Texas is $500.000. However, the cutoff for retaining SSI benefits with an ABLE account is $100,000.

Lesson Learned: An individual whose disability onset was prior to attaining age 46 should consider establishing an ABLE account. Family members should consider making contributions to that account for their loved one.

*This qualification is beyond the scope of this article.

Sandra W. Reed practices Elder Law in Somervell County, which includes probating of estates, drafting of wills, trusts, powers of attorney and deeds as well as estate and Medicaid Planning. She lives on beautiful Chalk Mountain and can be reached at 817.946.2809 or at sreed1247@gmail.com.