People who already meet the SSI and/or SSDI disability standards will automatically qualify, given that the onset of their disability occurred before the age of 26. The accounts will work much like a 529 or 401k account and will allow for contributions not to exceed the annual gift-tax exemption which is currently $14,000. Assets in the accounts can also be rolled over, penalty free, into another ABLE account or to a beneficiary’s qualifying family member. Assets left over at death will be used to reimburse the state for Medi-Cal payments made on behalf of the beneficiary.

The accounts will be available at a minimal cost and may be used to pay for qualified expenses related to the health, education and maintenance of the beneficiary as a result of living with a disability. Each state will be responsible for establishing their own ABLE program guided by the Secretary of the Department of Treasury. California should begin accepting the applications to establish the accounts during 2016. This is a HUGE step in a much needed direction for those living with a disability.