For years, ABLE accounts (known as STABLE accounts at AZ ABLE) have served as a unique estate and special needs planning tool for individuals and families. We’ve written and talked about ABLE Accounts in different contexts. Now we’re here to share some major updates that may present a planning opportunity for you or a family member. If you’re a podcast fan, you can listen to Robert B. Fleming and Elizabeth N.R. Friman discuss the 2026 updates here.
First, a quick refresher on ABLE
Congress passed The Achieving a Better Life Experience Act (The ABLE Act) in 2014. This allowed states to set up financial accounts (a/k/a ABLE accounts) for people with disabilities to own and manage. Beneficiaries and others can contribute to an ABLE account without harming eligibility for means-tested benefits, like Supplemental Security Income (SSI) or Medicaid (AHCCCS in Arizona). Ultimately, ABLE Act accounts allow people with disabilities to safely save money and enjoy greater autonomy. Arizona introduced its own version of ABLE in 2018 – adopting the Ohio model (hence the STABLE name, which Ohio initiated).
Money in an ABLE Act account can be used to pay for Qualified Disability Expenses (QDE) – including food, housing, travel, entertainment, education, and more. QDEs are not considered income for means-tested benefits, and investment growth in ABLE accounts is tax-free.
To qualify, you must meet the Social Security Administration’s definition of disability. In addition, you must have become disabled by a certain age. For years, that cutoff age was 26. As we’ve discussed, that cutoff was arbitrary – it was not tied to other eligibility rules or procedures. Unfortunately, it limited ABLE accounts to mostly people with early-onset (or even birth related) disabilities. For years, people who became disabled later in life (by a workplace accident, mental illness, or something else) were locked out of ABLE accounts. But with the new year comes new beginnings. Our ABLE update sketches out a handful of changes that have come with the new year.
The big change: the cutoff age will rise to 46
The ABLE Age Adjustment Act amended a section of The ABLE Act to raise the cutoff age to 46. So, people who became disabled before 46 now qualify for ABLE Act accounts starting January 1. This change presents new opportunities and possibilities for countless individuals and families across the country.
To be clear, this ABLE update is not really a new development. The increase in onset age has been scheduled for several years. And there’s a common misconception that we want to clarify: Age 46 (and before that, 26) does not limit when the accounts can be opened or money added. The cutoff age refers to the onset of a disability. The ABLE Age Adjustment Act is made more significant by other updates.
Other ABLE updates for 2026
The standard annual contribution has risen from $19,000 to $20,000. Since the inception of ABLE, the maximum annual contribution has been identical to the gift tax exemption amount (again, for no good reason). Now it has been decoupled, though both will rise at about the same rate in the future. Tax and savings benefits were extended or made permanent with the passage of The One Big Beautiful Bill Act (OBBBA) in July 2025.
The bill also made the ABLE-to-Work provision permanent. Starting January 1, beneficiaries can now deposit a portion (perhaps even all) of their income into their ABLE account beyond the new $20,000 annual limit, in some circumstances.
And the last ABLE update: the new law extends the allowance of tax-free rollovers from 529 Plans into ABLE accounts. That said, those rollovers are limited to the same annual $20,000 maximum. They also count against any other ABLE contributions in the rollover year.
An opportunity to do some planning
ABLE accounts can be a useful planning tool and a great way to maximize autonomy for people with disabilities. They also pair well with special needs trusts. For instance, a special needs trust could authorize the trustee to make contributions to an ABLE account for the beneficiary. You may want to consider a special needs trust to hold any inheritance for a loved one with a disability.
You should discuss the possibilities and opportunities with your attorney.
The rules are complex and ABLE Act accounts do have limitations. They can also present considerable issues and shortcomings. A special needs planning attorney – like any member of the Special Needs Alliance – would be happy to discuss your needs, spot the issues, and devise a plan for the best approach.
