ABLE Accounts: I Was Wrong
Or at Least, Incomplete
The plan that felt finished
Most families I talk to have heard of ABLE accounts, and a surprising number have already opened one. Almost without exception, they feel good about it - like they’ve checked a box. It was the responsible thing to do, and they’re ready to move on.
For years, my response to that feeling was to pump the brakes. ABLE accounts are real and useful, I’d tell them, but they’re not a plan. They’re one tool in a toolbox that most families haven’t finished building. The Special Needs Trust (SNT), the Supplemental Security Income (SSI) application, and the Medicaid waiver - those are the foundation. The ABLE account comes after.
I still believe that. But I’ve been thinking about it differently lately, and I want to explain why.
What I’ve been watching
The federal funding picture for Medicaid waivers has shifted in ways that deserve serious attention. I’ve written about this before - it’s not a new concern. But it’s a more urgent one than it was even a year ago.
Waivers - the programs that pay for in-home care, day programs, supported living, and dozens of other services families depend on - are funded through a federal-state partnership. When federal dollars tighten, states face a choice: make up the difference, cut services, or both. Most states aren’t going to make up the difference, not fully, anyway. It’s not out of maliciousness or ill intent. The money just isn’t there.
Unlike the Federal government, states have to balance their budgets every year. So when they lose a source of revenue, like the matching Federal dollars for Medicaid, there have to be some difficult conversations. The states that I feel are going to be hit the hardest are the ones that have always gone above and beyond. Families have grown accustomed to a certain level of support, and losses will hit much harder.
I’m not going to tell you exactly what happens next because I don’t know. Nobody does. What I do know is that “I don’t know” isn’t a reason not to plan. The question families need to be asking right now isn’t whether their child’s waiver will be affected. It’s what they have in place if it is.
That’s the question that changed how I think about ABLE.
What a conference session clarified
Last month, I was at the Academy of Special Needs Planners (ASNP) national conference. Jerry Hulick and Eric Ochmanek presented a session on ABLE accounts in advanced planning - current data, legislative updates, and real integration strategies with SNTs. It was a good session - it made me question some of the assumptions I’d been carrying for a while.
Here’s the assumption worth examining: I’d been framing ABLE primarily as an asset protection tool - a place to move money so it doesn’t count against SSI’s $2,000 resource limit. That’s not wrong, but it’s incomplete. The more useful frame, especially right now, is that an ABLE account is a flexible spending mechanism. Money in an ABLE account can be used for housing, transportation, health and wellness, basic living expenses - anything that relates to the disability and supports independence or quality of life. And it can be accessed without going through a trustee approval process.
That last part matters more than it used to.
The approval layer problem
A well-funded SNT is a remarkable thing, and using it can sometimes have friction. Distributions require trustee review. If you’re working with a corporate trustee, there’s a formal process. Even a family trustee - if they’re doing the job responsibly - is supposed to document distributions and make sure they align with the trust terms and the beneficiary’s benefit status.
For large, planned expenses, that friction is appropriate. For day-to-day spending - a copay, a bus pass, groceries, a new pair of shoes - it can get cumbersome fast. If waiver services shrink and families end up covering more of those daily costs privately, running every transaction through the SNT isn’t a realistic long-term solution. Ask anyone who’s tried.
An ABLE account, funded and managed carefully, can serve as the spending layer - the practical, day-to-day mechanism - while the SNT handles the larger financial picture. These tools work better together than either does alone.
The part I’m still cautious about
My original concern hasn’t disappeared. It’s just more targeted now. ABLE accounts are owned by the person with the disability. They’re supposed to call the shots. For individuals who can manage their own finances - or who have a family member willing to serve as an Authorized Legal Representative (ALR) - that’s a genuine strength because it promotes autonomy.
For individuals who can’t manage money independently and don’t have a reliable ALR, it’s a real problem. The good news is that provider agencies have more recently been allowed to serve as ALRs in many states. I don’t see this as a perfect solution - any arrangement where a provider controls a beneficiary’s money warrants scrutiny, and the potential for abuse exists. But at least provider agencies typically come with some compliance structure and oversight. The potential for abuse exists with families and friends, too.
If you’re in this situation, be aware that the option exists and go in with your eyes open.
What this means for your plan
The sequence I’ve always recommended hasn’t changed.
Get on the Medicaid waiver waitlist.
Apply for SSI when your child turns 18.
Get the SNT drafted and understand how it will be funded.
I still see these steps as the foundation, and the ABLE account should generally be the last thing you think about. It’s not because it’s less valuable. It’s because I’ve watched too many families open an ABLE account and think they’re done.
What’s changed is how I’d describe the ABLE account’s role once the foundation is in place. It’s not just asset protection. In the current environment, it may be one of the most practical tools a family has for maintaining flexibility when the programs they’ve counted on don’t fully deliver.
I don’t know exactly what’s coming. I know the environment has changed. And I know a plan built only on the assumption that waivers will always be fully funded isn’t as solid as it looks on paper.
Plan for what you know. Build flexibility for what you don’t.
You are very adept at taking complicated subjects and discussing them in a direct, accessible, and empowering way. This is such a gift to families. Thank you.
Excellent, Eric. Thank you for the education.