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Arizona Gets Its Own ABLE Act Accounts

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You probably already know a thing or two about the ABLE Act. It offers new flexibility and autonomy for people with disabilities. Now residents of Arizona can open an ABLE Act account with the new AZ ABLE program.

What is ABLE?

The Achieving a Better Life Experience Act passed Congress in 2014. It permitted states to establish accounts for individuals with disabilities. The rules are fairly straightforward, and the benefits obvious. Still, it has taken several years for states to get their accounts set up.

AZ ABLE is Arizona’s new ABLE account. It is online at It is easy to sign up online, and you can open an account in just a few minutes.

You may be familiar with Section 529 education accounts. The ABLE Act borrowed the Section 529 structure as its base, with (of course) appropriate changes. In fact, you can now transfer an existing 529 account into an ABLE account, with some limitations. As we recently explained, though, you should get advice before doing so.

Basic rules

Arizona’s ABLE Act account follows federal rules. The maximum contribution to an account in any one year is $15,000. That limit will increase over time, but slowly. There is an exception, allowing an increased contribution for some beneficiaries who qualify.

There is one major limitation to mention right up front. Any money left in an ABLE Act account at the death of the beneficiary will be payable to the state Medicaid agency. For someone receiving benefits from the Arizona Health Care Cost Containment System, that means AHCCCS will get most or all of the balance in an ABLE Act account.

One more important limitation: the ABLE beneficiary has to have been disabled before age 26. There is no particular logic to that requirement. It just helps keep the cost (to the government) lower, since fewer people will be able to open accounts.

Still, the money accumulated in an ABLE Act account can be used by the beneficiary during life. In fact, the beneficiary is in control of the money. The beneficiary can make investment decisions, direct payments — and even carry a debit card to withdraw funds from the account.

What if the beneficiary is unable to manage money?

An ABLE Act account belongs to the beneficiary. A guardian, parent, or agent on a power of attorney can open and manage the account, however. Most people will easily figure out how to open the account and who can handle it.

The beneficiary can select among several investment options. They might want to leave the money in the account, allowing it to grow over time. In other cases, the account might help pay monthly expenses without affecting eligibility.

Should every person with a disability open an ABLE Act account?

No. While the new accounts are really interesting, and helpful in many circumstances, they are not for every person with a disability. In an earlier article we explained who we think might benefit from an ABLE account. Let us summarize:

  • ABLE Act accounts will be very beneficial for people who are able to manage — or help manage — some assets. Previous rules limited them to never having more than $2,000 in an account. That limit is now elastic.
  • People who rely on someone (a parent, or a trust) to help pay rent and living expenses suddenly have a new way of handling that problem. It might even be possible to increase their Supplemental Security Income (SSI) checks by using an ABLE account to handle the expenses.
  • Interested in saving — perhaps for a new vehicle, or a planned, and expensive, vacation? The ABLE Act account might be a good mechanism.
  • Maybe you have a part-time job and few expenses. You might have problems keeping your account below the $2,000 limit. ABLE Act accounts to the rescue!

Keep in mind, though, that ABLE Act accounts are not a substitute for a well-drafted special needs trust. You should be very cautious about putting money in your child’s ABLE Act account to save money on legal planning. You might subject your child’s inheritance to a payback requirement that you will regret.

What’s special about Arizona’s ABLE Act account?

Arizona decided to sign on with the Stable Account platform, operated by the State Treasurer of Ohio. That is the largest ABLE provider in the country, and already has related programs in several states.

For about two years Arizonans have been permitted to open ABLE accounts in other states. Most of those who have decided to do so have chosen the Stable Account anyway. Now that relationship with Arizona has been formalized and extended.

There is no government subsidy or state tax incentive for opening an AZ ABLE account. There is, though, an income tax benefit — earnings in the account grow tax-free. Distributions from the account are also untaxed, so long as they are used for qualified disability expenses. A long list of expenditures (including housing, travel, therapy and medical equipment) will satisfy the requirement as a qualified disability expense.

A fair number of Arizona residents have waited for an Arizona ABLE alternative before making the decision to open an account. The time is here — AZ ABLE gives Arizonans their own ABLE alternative.



One Response

  1. If you or a family member has a disability, an Arizona ABLE Act account might be a practical method for handling funds. But I also want to add that it is not a replacement for a parent’s estate planning. Nonetheless, parents should still consider a third-party special needs trust.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

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Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

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Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.