The ABLE Account Act of 2009 H.R. 1205 and S. 493. A chieving a B etter L ife E xperience. I. What Is an ABLE Account?. Overview of ABLE Accounts.
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Amy and Jack are brother and sister. They live outside of Boston with their parents.
When Amy was born, her parents opened a §529 account to save for her college education.
Three years later, when Jack was born they opened a §529 account for him as well.
Jack is eventually diagnosed with autism spectrum disorder. His disability requires intensive support at home and in the community.
How would Amy and Jack’s family utilize an ABLE Account?
Money that Jack’s parents have been saving in his §529 plan can be transferred to his ABLE account.
Because of the severity of his disability, Jack will need support for the remainder of his life. Funds set aside in the ABLE account will provide financial support to Jack for housing, transportation, general living expenses and medical care. Just like his sister Amy’s §529 plan, the growth on his ABLE account funds will not be taxed.
Jack’s sister Amy can go to college, live her life, enjoy her brother and not worry about being his sole source of private financial support after their parents are gone.