ABLE Account Decision Guide Series

Selecting and Opening an ABLE Account


Step 2: Learn Who Can Open an ABLE Account

The Decision Guide, “Am I ABLE-eligible,” will be helpful in understanding if you are eligible to open an ABLE account. To learn about other decision guides, watch the introductory video, Using the ABLE NRC Decision Guides.

If you are age 18 or older, you may open one ABLE account.

Additionally, a potential ABLE account owner may select someone to assist them in opening their account. This may be one-time assistance provided by a trusted family member or friend. The ABLE account owner may also decide to ask for ongoing formal or informal assistance. Follow this decision guide for more information on assistance or tools to become financially empowered. The ABLE plan can provide more details on specific situations and strategies around who can open and manage the account. For ongoing formal assistance, the ABLE account owner may want to sign one or more powers of attorney which will allow the individual(s) assisting them to have various options with the ABLE account.

An individual with capacity, who has not selected someone to help them open/manage an account, or chooses not to select someone, may want to review the Internal Revenue Service priority list called a “hierarchy” for opening the account, for direction:

  • Individual (with capacity *) with the disability
  • Individual selected by the individual with a disability or the eligible individual’s agent under a power of attorney, legal guardian or conservator
  • Spouse, parent, sibling, grandparent
  • Representative payee (RP) (individual or organization)**

* Capacity refers to capability in the eyes of the courts. With ABLE accounts, it refers to having the legal authority to open an account. An adult with a disability, who does not have a legal guardian or conservator appointed during legal proceedings, is assumed to be capable of opening and managing an ABLE account unless a court has determined otherwise.

Note that there is a difference between having capacity and wisely managing finances!

** In order for a representative payee to open an ABLE account, the account must meet all Social Security Administration representative payee titling and other policy rules to be acceptable to hold saved benefit payments called conserved funds. The ABLE account must also show the person with a disability owning the account, but with the RP holding funds in the account in a management capacity. This is called a fiduciary relationship. The person with a disability cannot have access to the conserved funds. Examples are included in the SSA webpage: Payee and ABLE accounts.

A parent or an authorized legal representative may open an ABLE account for a child under age 18. When the account is opened by someone other than the person with the disability, the person opening the account must self-certify that there is no other individual higher on the priority list who is willing and able to open and manage the account. Although it is not necessary to have an attorney, accountant, financial planner or tax advisor to help open the account, a person may choose to consult with one or more professionals prior to opening an ABLE account.

From time to time, the individual with a disability with legal capacity may remove and replace an individual who can establish and control the ABLE account. The person who can establish and control the account is called someone with “signature authority.” A person with signature authority may name one or more successor signatory, consistent with the same ordering rule, if the beneficiary lacks the legal capacity to do so. Consult the ABLE plan disclosure document for specific information.

As a representative payee (RP), if the ABLE plan meets all of Social Security Administration’s RP rules, including proper titling of the account, you can save money from SSA benefits in the account. This includes transferring existing conserved benefits from a non-ABLE account into the ABLE account. In general, if there is a change of payee, any funds saved on the beneficiary’s behalf, and any interest/gains earned, should be returned to SSA to reissue to the new payee or directly to the account owner if he or she no longer needs a payee. Contact SSA for case-by-case instructions.

If the account does not meet all of the Social Security Administration’s RP rules, you can, however, still help the person with a disability save personal money, a personal needs allowance or other funds in the account. These may include earnings, economic stimulus payments, unemployment compensation, alimony or funds transferred from a special needs or pooled trust into the ABLE account.*

And even though a person has a RP, the person with a disability is encouraged to take steps to learn financial skills, which may qualify them to be capable of managing their own money and benefits at a future date. When a person has developed the skills necessary to manage their own money and benefits, there is a process that allows a person to request that the Social Security Administration remove a representative payee. A person can ask for a doctor's statement showing that there has been a change or improvement in a condition, and that the doctor believes the person can manage or direct the management of their own money and benefits; or an official copy of a court order saying that the court believes that the person can care for their needs and manage their funds.

Free online financial wellness training or virtual financial counseling and coaching can help in building money management skills.

* Please note, income counting rules still apply to earned and unearned income that is “due to the beneficiary,” such as child support, spousal support, annuity or settlement payments, etc., even when it is directly deposited into an ABLE account.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.