Episode 55 – ABLE savings plans for people with disabilities
Episode transcript:
[music intro]
Jenny
Welcome back to Fund Your Future with DRS. Today we’re talking about kind of a new-ish type of savings plan for individuals with disabilities and their families called an ABLE savings plan. And it allows folks with disabilities to put away money without worrying about losing some of those disability benefits.
So, we’re happy to have Katie on the program today. She’s the program manager for the Washington State Department of Commerce to help us learn more about these accounts. Welcome, Katie.
Katie
And thank you. Thanks for having me. Yeah, I’m excited to be here to share about ABLE, the ABLE Savings Plan. It’s one of two financial tools that I oversee that is administered by the state of Washington. The other one is the Developmental Disabilities Endowment Trust Fund, or DDETF for short. But they’re both great tools. And yes, I’m happy to share more about them.
Seth
Wonderful. Katie, I was at a conference about retirement plans a couple of months ago. Which sounds really exciting. I know, I’m sure people wish they were there. But somebody I was sitting with started telling me about ABLE plans. We were talking about 529 plans, I think he said he had a son with autism. He had just learned about these plans and he works in the financial industry. And so, we’re hoping you could just tell us a little bit about what an ABLE account is and what are the primary benefits.
Katie
Yeah. So, an ABLE account, it’s a tax advantage. It’s both a savings and an investment account. Because we have several options that people can choose from. But essentially it allows people who are living with disabilities to save money, you know, for either current or future expenses and not be concerned with the asset limits that are set on many state or federal benefit programs.
That eliminates the need for people to spend down their money each year or each month when they have they have too much money in assets. They have to kind of spend it down. But if it’s an ABLE account, they don’t have to worry about spending that down and ABLE was kind of made possible through a federal act that was passed in December of 2014.
So, we’re coming up on our ten-year anniversary here. Washington ABLE started, we kind of launched our program in 2018, and since then we’ve got about 5200 account owners in Washington that have saved more than $55 million in their ABLE accounts. So, it is an amazing tool that is working for a lot of people.
Jenny
That’s so cool. You kind of talked about how it doesn’t affect people have state or federal benefits. What are some of those common programs where maybe an ABLE account could help those folks?
Katie
Yeah. So, I would say the most common type of account or benefit that people are receiving is Supplemental Security Income or, SSI as it’s commonly referred to. And again, that’s the one benefit that has that $2,000 asset limit that really makes it difficult for people to save money, you know, from month to month. So that’s the most common one.
And some other common ones are Supplemental Nutrition Assistance Program, otherwise known as SNAP. Also, temporary Assistance for Needy Families or TANF is the acronym for that one. Or section eight housing, people who are receiving vouchers. There’s kind of an asset limits set on their eligibility to receive those as well. People who receive SSDI, those don’t have assets, but a lot of people who have ABLE accounts also have SSDI.
So, it’s another benefit that people may receive. Most of the ones I’ve listed so far have asset limits, but not income limits. So those are two different eligibility requirements. But another common type of benefit that people receive is Medicaid. It has income limits but not asset limits. So, it’s another thing that people are concerned about when they’re looking at their whether or not they want to have an ABLE account, but those are kind of a handful of them.
There’s a lot more out there, but those are kind of the big ones.
Jenny
Yeah, that’s good to know.
Seth
So, Katie, could you tell us who would be or might be eligible for these ABLE accounts?
Katie
Yeah. So, the eligibility criteria is primarily based on age and disability. So, the age criteria is that like the onset of the disability had to have started before the age of 26. And that could be for disability or blindness. So that’s the first criteria before the age of 26.
The second criteria is that they either have to be eligible for SSI or SSDI. And, you know, key note that I said eligible for because they don’t have to be currently receiving those benefits. Just be eligible for that. They meet the eligibility criteria for those benefits.
Or they could have a disability diagnosis from a physician or psychiatrist. I say physician or psychiatrist because ABLE is really open to a broad range of disability categories. So, it could be developmental, mental, like mental health disabilities.
So as long as they have one of those two, eligibility or disability diagnosis – I will note that the age of onset is increasing to age 46 starting in January of 2026. So that’s really going to open the door to a lot more people who have disabilities that that started between age 26 and 45.
And another note I’ll add here is that you do not have to be under age 26 to open an account. So, you could be we have people who are in their 90s who have ABLE accounts. As long as you have documented that your diagnosis began before age 26, you can open it at any age.
Jenny
That’s great. You kind of touched on this a little bit, but can you talk a little bit more about who can open and ABLE account like between dependents and, parents and things like that?
Katie
Yeah. So, if the person who has the disability — we call that person the beneficiary or the account owner — if they’re able to manage the account on their own, then they can open the account on their own behalf. Of course, we have a lot of parents who open accounts for their minor children. And, you know, of course, the children can open the account on their own.
And we have some people who either aren’t able to manage their finances on their own, or they just prefer that somebody else, manage them for them. So, in those cases, they can have a third party open the account and kind of be the authorized representative on the account. So, for the most part, we have parents or spouses, other family members or friends that are managing accounts for the beneficiary.
But we have other people might have a more formal or legal relationship with the beneficiary. So, power of attorney, a conservator, a guardian, or even a representative payee is assigned by the Social Security Administration. Those people can also open an account on behalf of the beneficiary. And we even have organization accounts that, you know, if an organization is managing, accounts from multiple beneficiaries, they can open one at an organization level.
Jenny
Oh, wow. That’s awesome.
Seth
So, I think we know with, all sorts of different types of retirement accounts, there’s oftentimes, contribution limits, annual limits, or other types of restrictions on these accounts. So, for ABLE accounts, is there an annual contribution limit and what does that look like?
Katie
Yeah. So ABLE accounts have contribution limits that are kind of set based on federal levels. And they, so they change from year to year. So, for 2025 the annual contribution limit is $19,000. For people who are just learning about this, you might have heard about in 2024, it was $18,000. So that’s going to go up for 2025.
And then we also have an additional contribution for people who are employed, beneficiaries who are employed and earning their own income. We have a separate contribution limit that is applicable to those employment earnings. And that’s called ABLE to work is the kind of designation that we put towards those contributions. And that limit is an additional $15,000 or up to an additional $15,060 for 2025.
So, what that means is when you combine those two limits, so an employee beneficiary who has her own account, they could contribute up to $34,060 in 2025, which is significantly higher than $2,000 asset limit. Right. So those are contribution limits. There’s also kind of like a lifetime balance limit, which is 500,000. So anytime the balance gets to that point, beneficiaries, account owners, they can’t contribute to the account anymore.
But if they withdraw money or you know, some money comes out, any other ways in the balance drops down below 500,000, then they can continue making contributions. But those are the primary limits on the account.
Seth
And just to clarify, so if the account reaches $500,000 and goes over because of investment gains, we have a crazy year in the market and it goes up to $600,000. The account holder doesn’t have to spend that money down within the year. They just can’t continue to contribute to it until it falls below that. Correct?
Katie
Yeah. Correct. And thanks for making that distinction. The account can continue to earn, interest and other earnings for their investments. They just can’t make those contributions until it drops back down. That makes sense. Great question.
Jenny
And before we get into talking about how people use the money, can you tell us a little bit about how people can contribute and put money into the account?
Katie
Yeah, a lot of people kind of have questions about the inner workings of like, well, how does it work? We are all online. There’s no bank. You know, there’s no physical bank that you walk into to manage your account. It’s all done online. You know, there’s several ways you can make contributions. Keep in mind. And these what I’m about to highlight.
The same annual contribution limit applies to all of these. So, it’s still the $19,000 through 2025. But I’d say there’s kind of four common ways for people to contribute to their account. The most common way is to connect to an external bank account. So, wherever you currently have a checking or savings account, you can just connect that to your ABLE account and transfer money, you know, make contributions to your account.
That way you can also connect multiple bank accounts. So again, in the case of a parent who might be managing it for a child, whether that child’s an adult or not, you can attach, you know, multiple accounts.
A second common way to make contributions is to do rollovers. And I’ll specify rollovers from other 529 accounts. This will get a little bit deeper into the tax code here. So, an ABLE account is considered A 529(a) account. You’ve probably heard of 529 in the world of like college savings, but they both fall into the same tax code, which allows for rollovers from any 529 account to roll into an ABLE account.
So, what that means is if they have another ABLE account from maybe they lived in another state and they moved to Washington, they can roll that account from that other state into, that other account into a Washington ABLE account. Or if they have a 529 college savings account, they can rollover money from that 529 college savings account into their ABLE account. So that’s a second way to make a contribution is through a rollover.
A third common way is through gift contributions. So once an account is set up, the account owner goes on to their online platform. They set up a gifting page. They can share that link with friends and family, and contributions can be made that way. And then a fourth way is through a direct deposit. And this can be done directly from the Social Security Administration. They allow direct deposits into ABLE account or from income like employment earnings. And that could be the beneficiary’s own employment earnings.
Or it could be like a parent’s employment earnings. They want to direct deposit into their child’s account or something for example.
Jenny
Gotcha. And just to clarify, yeah, which one is probably the most common?
Katie
I would say the most common currently is through an external bank account. So, a lot of people managing their own accounts. And you know, of course it depends on the relationship that the authorized representative has with the beneficiary. So, for example, if that relationship is a representative payee, they’re working directly with, you know, Social Security Administration, it may be a direct deposit from SSA.
But yeah, right now we’ve got a lot of people, either managing their own accounts or like parents managing for their children. And so external bank accounts, kind of that common way of making contributions.
Jenny
Gotcha.
Seth
So can you tell us how a person then eventually the money’s gone into the account. How are they able to make withdrawals from the ABLE account?
Jenny
Yeah, I love this because it’s more than just a retirement savings account. You can use the money right away.
Katie
Exactly. Yeah. So, the withdrawals are somewhat similar to contributions. So again, the most common way for people to make withdrawals is to do then just transfer the money back over to their regular bank account and then they can, you know, make purchases that way. A second way — and this is kind of my preferred method — I have an ABLE account for one of my kiddos and the debit cards, we have a prepaid debit card.
It is an add on to the ABLE account. It doesn’t come standard, but it makes it really easy for you to basically take money out of your account and use it. So that’s another withdrawal that people can make is kind of transferring money from their ABLE account onto the prepaid card. And then there’s some other ways like EFT payments, a ACH payments or, you know, even good old paper checks.
Some people want to actually send a paper check, to a payee or something. And that’s another way that they can make withdrawals.
Jenny
And on your website, it talks about being able to use this money for a qualified disability expense. But it’s really a broad term, right? They can also use it for housing or rent. And can you talk a little bit more about what constitutes as a qualified disability expense?
Katie
Yes. And that is one of those technical terms that was developed. It’s got an acronym, a QDE. So that was basically a broad range of categories created by the IRS for people to, you know, kind of make the determination of whether or not they’re using their funds appropriately. And, you know, the easy way to say it is, as long as the funds are being used to improve health, independence and quality of life, then it’s considered a qualified disability expense.
And we have some people who still have questions about that. So, there’s ten categories. I’ll list those off, but they are listed on the website as well. So, it makes it easier to see it that way. But those categories are basic living, housing, transportation, education, assistive technology, employment and training, personal support services, legal and funeral costs, health and wellness and financial management.
So, if in your head you’re wondering, does this qualify? If you can put it into one of those categories and if that contributes to the quality of life, then yes. So again, they’re meant to be broad categories. They’re really meant for either the beneficiary or the representative of the account to make the determination of kind of where it fits in. And our recommendation is just keep receipts for anything that you might have a question about or doubts about.
You know, one of the most common questions we get is, “can I go on a vacation?” And if you think about it, you’re maybe getting airfare, which is transportation. You might need to get a hotel room or some sort of accommodations falls under the, you know, housing. Getting food or paying for experiences throughout the day might be some of those basic you know, living costs. So, for the most part, you can use an ABLE account for pretty much anything that you would use a regular checking account for.
Jenny
That’s super great.
Katie
Another thing I wanted to add here, because I know a lot of people have concerns about whether or not they, you know, these accounts are closely monitored if they’re going to get in trouble for using them incorrectly. These accounts were set up for people with disabilities to have a little bit more freedom and quality of life. So, at the moment, as far as we’re aware, neither the IRS or the Social Security Administration are closely monitoring these accounts. They really are meant to work in the benefit of the beneficiary. So peace of mind there.
Seth
Yeah. That’s great. And you mentioned one of the ways that the accounts can be made a little bit easier with these prepaid debit cards. As an add-on to the plan, I think I saw on your website that there’s maybe a fee associated with that. If you could talk a little bit about what that fee is and other benefits of the prepaid card.
Katie
Yeah. So, the prepaid card has a monthly fee of $5. But currently the Washington ABLE plan is covering a majority of that for account holders. And the other benefit of the prepaid card is there’s no transaction fees. There’s kind of similar cards out there that do have transaction fees. We have no transaction fees, and the funds on the card are FDIC insured.
So, people can have peace of mind there. You can load anywhere from $10 all the way up to $20,000 on to a prepaid card, and one account can have multiple cards. So where that comes in handy is when you have, again, like a parent or a guardian who, wants to provide a card to their child or to the, you know, the adult beneficiary to go out and have, you know, some spending money to spend or go hang out with friends, do things like that, but then they might have another card where they’re doing things like paying bills or making larger purchases on behalf of the beneficiary.
So, the card is nice in that way. Another great bonus for the card is that it will track all those transactions online. So, for a family, for instance, that might have, a child with a disability, but they also have other regular household expenses that they’re paying for out of their regular bank account. Having that prepaid card allows you to kind of keep all the disability expenses separate from other household expenses so that they’re easier to report on or, you know, just track or purposes of reporting.
Jenny
So, you did mention that there is a small nominal fee for the prepaid debit card, but are there any other fees that are associated with the ABLE account that people should be aware of?
Katie
Yeah, I think for the most part we try to keep fees as minimal as possible, but there are a couple of fees that apply to everyone who has an ABLE account, one of which is the annual maintenance fee that is currently $35 and it’s assessed quarterly. So, people will see it kind of come off of their quarterly statement.
And then the other, kind of primary account fee, if people are using any of the investment options, is there are investment fees and those range between 0.3% to 0.38%, depending on the type of investment that the person might choose. Otherwise, we try to keep them low. There’s some other fees on the account, like for instance, if people want to receive their documents via paper instead of electronic delivery, I think that’s $20 a year again assessed quarterly.
So, you’ll see like a $5 fee on your statement. We have a very small amount of people who utilize that option, maybe like 5 to 7% of our account holders do that. But and there’s some other fees that are on, you know, for again, ordering a paper check or things like that. Those are all detailed in our plan disclosure booklet. But most of the fees we try to keep low.
Seth
And Katie, you just mentioned that there is an investment option with this plan. And you’d mentioned earlier that this is an interesting account in that it works as a savings spending and or investment vehicle. So, could you just talk about how the investment portion works?
Katie
Yeah. So, there’s four options. When a first person first opens an account, they can kind of say upfront, this is how I want any money that I contribute to the account, how I want it to be allocated. And they’ve got four options. So, one of those is kind of like a straight cash option. So, think of it like a regular savings account that you might have that it earns interest. It’s FDIC insured.
But then the other three are those investment options and they’re called conservative moderate and aggressive. So those utilize the same set of seven mutual funds. But there’s different ratios of stocks and bonds. Again they’re kind of like traditional investment accounts. But they’re designed to allow account holders to invest based on their own personal comfort level.
And again think of conservative, moderate aggressive people who, you know, maybe want to earn more money and aren’t planning on looking at their account or taking any money out of their account for a long time, might choose aggressive because it’s got a higher rate of return, but it also has that higher level of risk. So yeah. And then there’s a link down in the footer of our website that says historical performance.
And so, people really are interested in this piece. They can kind of look at that and see how those four options have performed since our inception.
Jenny
And I read on your website that having more than $100,000 in an ABLE account could impact your Social Security income. Can you explain that a little bit more?
Katie
Yeah. So, this is, I guess, another limit that I didn’t mentioned earlier once an account balance reaches $100,000, anything over that is considered an asset for SSI. So imagine, you know, you’re receiving SSI and your balance reaches $103,000. So that $3,000 would then count as an asset and Social Security Administration would start to look at your assets in that way.
One thing to keep in mind, though, is that benefits aren’t necessarily terminated. They’re just suspended until that balance drops back down below $100,000. And this really only applies to people who are getting SSI. So, you know, if you’re getting other kind of benefits where that asset limit doesn’t apply, then it’s not something to be concerned about.
Seth
And so, do people who are receiving SSI or SSDI need to report their ABLE accounts, then to the Social Security Administration?
Katie
No. And this is actually something because, you know, the people who are, at that national level of ABLE, they have direct relationships with SSI. It’s one of the requirements that we had to have that we actually report to the Social Security Administration on a monthly basis. Certain information about each ABLE account, you know, certain sort of things like that.
There’s one account per beneficiary and that contribution limits aren’t being exceeded. And so, we report kind of basic information to Social Security Administration every month for that purpose. So technically if you are speaking to somebody from the Social Security Administration, they aren’t allowed to ask you questions about what’s in your account. It is a really good idea to let them know: “Yes, I have an ABLE account, or my child has an ABLE account,” but they’re not allowed to ask questions about what’s in it. They can ask questions about withdrawals that are taken from it, and maybe put into your regular bank account, and they can ask some basic questions around that, but not about what’s in the account.
Jenny
So, we’ve touched a lot of high level stuff so far. But can you give us an example of how someone might use an ABLE account, or maybe some common.
Katie
Yeah, I mean, we’ve got a wide range. The awesome thing about ABLE accounts is that they’ve really open the door for people who, you know, had that door locked shut for them for so many years, right. If you think about it, if you could never save more than $2,000 in an account, I mean, you can’t take vacations, you can’t really buy a car, you can’t buy a house, you can’t buy really expensive, maybe assistive devices.
So, these accounts really open the doors for people in a lot of ways. You know, everything that I just say. And I think if you ever speak to a parent, maybe ten, 20 years ago, even ten years ago, if you would talk to a parent who had a child that was born with a disability, they were told from the very beginning, to never save money for your child under their name because they will not be eligible for benefits when the time comes, right?
So now parents can save on behalf of their children. And you know, just like parents who put money into a college savings account, if you know that your child has a disability and that they’re going to need money when they reach their transition years, right? Transitioning from childhood to adulthood, they’re going to need money to put money down on a as a down payment on a home, or even to help support with assisted living, if that’s the case. So, these accounts really open up a lot of possibilities for people who are living with disabilities that they just weren’t able to achieve before.
Jenny
I love that, and especially because, like you said, the person with the disability can be of any age when they open the account too.
Katie
Yeah, it allows them to dream. Dream ahead and think about what they want to do in the future.
Jenny
Yeah, and like you said, have more independence.
Katie
Yeah.
Seth
That might tie-in to this next question that some people might think about is: what happens to account when the person passes away? The beneficiary of the account passes away, assuming there’s still a balance left in that account.
Katie
Yeah. So, if there are funds left in the account after the beneficiary passes away, one of the first things that, of course, the people who are supporting them might think about is how to pay for funeral or burial costs. So those are all considered qualified disability expenses. And even though the beneficiary passed away, it’s, you know, on behalf of the beneficiary.
So those can be paid for and any other expenses that might have been paid for prior to that. As long as those all go through and they’re qualified, those would clear. If the beneficiary has a qualifying sibling, you know, qualifying, meaning that they also have a disability, then the money could pass to an account for that sibling, whether an account already opened or, you know, they open an account at that point for a sibling.
If there isn’t a successor beneficiary, then the money would go back to the beneficiaries estate, and at that point it could be open to being recovered by Medicaid. So, if Medicaid paid for any services on behalf of the beneficiary in their lifetime, then Medicaid might recover the funds from the person’s estate. We’ve only really heard of one situation, or I’ve only ever heard of one situation where that happened, where Medicaid did recover money from the person’s estate so it could happen.
Although it’s not very common. And I’ll add that we have a national network called the ABLE Savings Plan Network. So ASPN is the acronym there. They’re working on creating some legislation that will make ABLE accounts and any funds that transfer to an estate from an ABLE account exempt from Medicaid recovery. So, I know that is a concern for some people who are looking into this, but we’re working on making that not possible in the future.
Jenny
And if someone’s thinking about opening this account, is there a good time of year to do this, or does it really not matter, like if it’s around tax time?
Katie
I mean, really what we say is if you meet the eligibility criteria and you’re thinking about opening an ABLE account, just go ahead and do it. It really doesn’t matter what time of year it is. As long as you meet that eligibility criteria, you can open it at any time. And the reason for that is, especially if you’re a parent and you have a child with a disability and you’re kind of uncertain if they’re, you know, maybe like in my situation, my nephew has autism.
He’s highly functional. He can work on his own, may not need a severe supports as some people do. But I don’t know what his future holds, right? And there’s a lot of parents who are in that kind of situation where they don’t know what’s going to be possible until that time comes. Open and ABLE account, you know, just add a little bit of money every month or whenever you can.
And that way you have it there. And the reason I say that is because, you know, you have money set aside for them for the future, and they reach the age of 18 and they become eligible for SSI. For instance, if there’s $10,000 sitting or $5,000 sitting in a savings account out there, they won’t be eligible to start receiving benefits. So put it in the ABLE account now and kind of cross that bridge when you come to it.
Seth
Yeah, that makes a lot of sense. Is there anything else a person should consider when they’re opening an ABLE account.
Katie
Yeah. So if I think, as I mentioned before, only one account is allowed per beneficiary. There’s a short window of time that the IRS will allow in the case of a rollover. As I mentioned before, if they’re moving from one state to another or one plan to another, and there’s a 60-day rollover period there. Another thing is if you withdraw money, this is specifically pertaining to rent or housing payments.
Again, SSI looks at the calendar month, right. So, they’re looking at the first of the month through the very last day of the month. If you withdraw funds from one month and you hold them into the next month, although it counts as a withdrawal in the first month, it could count as an asset in the second month. So, for people who are withdrawing money for, you know, rent payments or payments or mortgage payments, we kind of recommend talk to your landlord or your mortgage company and just see if you can make that payment, you know, by the fifth of the 10th of the month.
And that allows enough time for deposits to be received, transfers to be made and those payments to be made. And then the only other thing which I don’t think I’ve mentioned yet is that if funds are used for non-qualified disability expenses, there may be a 10% penalty on that purchase and then any taxes could be owed on the expenditure amount. Again, we haven’t really come across that issue, but just be aware of that.
Jenny
Okay. And then Katie, what would you recommend for people who might already have another financial tool like a special needs trust?
Katie
Yeah, this is a really good question. I have a lot of people who say, oh, I already have a special needs trust. Or as I mentioned, that I oversee that Developmental Disabilities Endowment Trust Fund. And we actually have a lot of people who have both a DDETF and an ABLE account because they complement each other really, really well. And they have similar purposes but different kind of benefits as far as how they’re structured.
So again, ABLE has contribution limits, right? Those annual contribution limits and maximum balance limits where special needs trusts typically don’t have those contribution limits or maximum balance limits. So, we recommend people use like an ABLE account to make smaller deposits. But if you have a larger deposit like inheritance or settlement, put that into a special needs trust. So, another thing is that some people, depending on the way the special needs trust, is set up that you might not be ABLE to make regular like basic living expenses or housing payments out of the special needs trust.
So, an ABLE account is really helpful in that way. It’s more easily accessible. You know, it’s like make a transfer to your bank account or you know, swipe your prepaid card and you can have that be immediate. The special needs trust typically again allow for more than that, $500,000 balance and an ABLE account. You can usually put more than that into a special needs trust.
And the special needs trusts usually don’t have that $100,000 limit where if it reaches that balance, if you have SSI, if it reaches $100,000 and an ABLE account, anything over accounts is an asset. But in a special needs trust, it doesn’t count as an asset. So great accounts to use in a complimentary way.
Jenny
I love it. That’s awesome.
Seth
So, Katie, could you tell us a little bit more about these Developmental Disability Endowment Trust Funds? The DDETF, I’m going to struggle with that acronym. You just share a little bit more about what those mean for people, since it’s probably not a term people are familiar with.
Katie
Yeah. You’re not the only one to struggle with the DDETF, it is a mouthful. So that is a special needs trust. And I believe that Washington state is one of the few, if not the only, state that has a state-run special needs trust like this one. There’s other states that have it, but they’re not run by the state or administered by the state.
And again, many similarities to ABLE, as I mentioned, the funds must be used on behalf of the beneficiary. It allows any funds that are in that account to be exempt from the $2,000 asset limit. They have to qualify, or use the account for qualified disability expenses, much like an ABLE account. So, there’s kind of a set of criteria for how they can use the account in DDETF as well.
But there’s some differences as well. So DDETF is solely for people who have either a developmental or an intellectual disability. So, in that case their eligibility criteria is they had to have been born with it or developed it very early, right? So, the age of onset had to happen before the age of 18 with the DDETF, versus 26 with an ABLE account.
The enrollments for the DDETF are done through the trust manager who’s the arc of Washington. They manage the trust on behalf of the state of Washington. So, all enrollments are done through them and it’s done by paper. So, there’s legal documents required, joinder and agreements and things like that to be signed. So, all of that is done through the arc of Washington as a trust manager.
Whereas with ABLE it’s all done online and with the DDETF there are two types of trust that are available. So, with ABLE you can only have one account per for beneficiary. The DDETF has two different types of trusts. One of them is a first party trust. So, it’s a trust in the name of the beneficiary and can only take the beneficiary’s own money.
So that could be employment income, it could be settlement income. But anything that is the beneficiary’s own money. The second type of trust we have is a third-party trust. And one beneficiary can have multiple third-party trusts. And it’s really, you know, anyone who wants to set up money on behalf of the beneficiary to contribute to them, could be a parent, a grandparent or friend, community.
They could all set up a trust on behalf of the beneficiary. And that is all third-party money, right? Anything that’s not the beneficiary’s own money. Let me see if there’s any other notes I have about that. So, I will say one benefit of opening up a DDETF for anybody who might have been thinking about, like a special needs trust.
If you are, you’re the person that you’re looking for this for qualifies for DDETF, there’s significant cost savings to opening a DDETF over opening a regular special needs trust. Special needs trusts are legal financial vehicles. They can be quite cost prohibitive for people who simply can’t afford it. And so, the DDETF has much more reasonable. costs. And then on top of that, at the moment, the state is currently matching most of the fees that a person might pay for that DDETF.
So that makes it even more accessible for people.
Jenny
Great. Yeah, you’ve obviously shared a lot of information today, but could you give us a quick summary, maybe kind of your elevator pitch that you give about the ABLE program?
Katie
Yeah, I think, you know, the ABLE program is for everyone and, you know, open an account if you even thinking about it, just take the plunge. It’s super easy to open. It’s all done online. It’s super easy to access your funds and navigate. It only provides benefits to people. If anybody is ever out there having, you know, they’ve been told by somebody from DDA or Social Security Administration, information that they’re not hearing, you know, that may conflict with what I’m saying.
We even have information on our website where you can pull up actual legal statutes and, and WACs that say, yes, you know, this is how it’s supposed to function and operate. So, yeah, bottom line is open and ABLE account if you meet the eligibility criteria. Just do it.
Seth
And Katie, where can a person go to learn more about these accounts or actually sign up for one.
Katie
Yeah, everything is done online. So, our website is www.WashingtonStateABLE.com and tons of information on our website. Lots of resources. There’s some presentations. You’re a community partner and you want to share this information with, the people that you work with, lots of, presentations and materials and FAQs on there.
So, at the top of our website, there’s a button that says “open an account” and that will kind of launch you into the process. There’s some details to provide about the beneficiary, but you can have an account open in ten minutes or less. You start an account with as little as $25 and you’re good to go.
Jenny
Great. Well, this is obviously a fantastic program, and since it is pretty new, is there any way that we can help get the word out about this ABLE program?
Katie
Yeah, I think you first of all, again, thank you for having me on the podcast. We’re always excited to share about this. And we know it’s just like anything, right? It might take people a few times of hearing about it and learning about it before they actually do it. So, this is another opportunity to do that and I appreciate that. Another great way, obviously word of mouth.
So, if you have an ABLE account, share it with people who you know who might be interested, or eligible. But one key thing that we’re trying to work on these days is getting employers to offer ABLE accounts as just information in their kind of benefits, onboarding or even at open enrollment. We heard one employer referred to it as the best free benefit they could offer.
Right? Because it really is. It doesn’t have any cost to the employer. You just add a link, maybe into the Benefits 24/7 portal and just have it available there for people to go and learn more about. So yeah, if you’re an employer, either a state employer or otherwise, or if you, you know, if you are an employee and want to learn and have your agency offer this in their benefits portal, please share this podcast. Get the word out.
Seth
That’s great. I know we have a lot of employers who listen to the podcast, school districts and local governments as well. So hopefully, hopefully they can share with their colleagues and share with other organizations.
Jenny
Or anyone who is, a general business owner. This applies to anyone in Washington state. You don’t have to be a state worker.
Seth
That’s exactly. That’s a really good point.
Katie
Yep.
Seth
All right, Katie, thanks for joining us. Yeah.
Jenny
This is fantastic information. I love this program and happy to get the word out.
Katie
Yeah. Thank you so much for having me. This has been great to share. And please reach out if you have any questions.
Jenny
Yeah will do. Thanks.
Katie
Thank you.
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Disclaimer
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References to any specific product or entity do not constitute an endorsement or recommendation. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by DRS employees are those of the employees and do not necessarily reflect the view of DRS or any of its officials.
