At Cookman Law, we love ABLE accounts. They give a person with a disability room to save and spend without putting SSI or Medi-Cal at risk, and they make life easier for the family members who help manage the money. In 2026, they also became available to far more people.
This post covers what changed this year, how an ABLE account fits alongside a special needs trust, and where its limits are. For a broader overview, see our ABLE accounts page.
What Is an ABLE Account?
An ABLE account is a tax-advantaged savings and investment account for a person with a disability. Contributions are generally made with after-tax dollars, but money in the account can grow tax-free, and withdrawals are tax-free when they pay for qualified disability expenses. That category is broad. It includes housing, food, transportation, education, health care, assistive technology, job training, and basic living expenses.
The ABLE Act of 2014 created these accounts at the federal level, and each state runs its own program. California’s program is called CalABLE, administered through the State Treasurer’s office. A person can have only one ABLE account.
What Changed in 2026
Several changes took effect this year, and together they make ABLE accounts more useful than at any point since they launched:
- Eligibility now reaches age 46. Since January 1, 2026, a person qualifies if their disability began before age 46. The previous cutoff was 26. A person can be any age when they open the account, as long as the disability started before 46.
- The annual contribution limit is $20,000. Family, friends, and the account owner can contribute up to that combined total each year.
- ABLE to Work is now permanent. An account owner who works, and who isn’t contributing to a workplace retirement plan, can add up to $15,650 more of their own earnings in 2026, for a possible total of $35,650.
- 529 rollovers are permanent. Families can roll money from a 529 college savings plan into an ABLE account, within the annual limit.
- The Saver’s Credit applies to ABLE contributions. An account owner who contributes may qualify for this federal tax credit, depending on income.
If your family member was told years ago that they didn’t qualify because their disability began after 26, it’s time to check again.
How an ABLE Account Protects SSI and Medi-Cal
A person who receives SSI can have no more than $2,000 in countable resources. A regular savings account can put that limit at risk quickly.
An ABLE account works differently. The first $100,000 doesn’t count toward the SSI resource limit. If the balance goes above $100,000, SSI payments are suspended rather than terminated, and they resume once the balance drops back down. Medi-Cal eligibility continues either way. CalABLE accounts can hold up to $529,000 in total.
That protection matters more in 2026 and beyond. California reinstated a Medi-Cal asset limit on January 1, 2026 ($130,000 for an individual), and the 2026-27 state budget lowers it to $21,000 beginning July 1, 2027. ABLE balances don’t count toward that limit, which makes the account a practical place for an adult on Medi-Cal to hold savings.
Why Many Families With a Special Needs Trust Still Want an ABLE Account
We hear this question often: “My loved one already has a special needs trust. Do they need an ABLE account too?”
We answer with an emphatic yes! The two tools do different jobs, and they work best together.
Housing is the big reason. When a third party pays an SSI recipient’srent, mortgage, property taxes, or utilities such as gas, electricity, water, sewer, and garbage, SSA treats that help as in-kind support and maintenance (ISM) and reduces the SSI check. That includes a special needs trust paying those bills directly. In 2026, the federal SSI payment is $994 a month, and the ISM reduction can reach about $351 a month.
When the account owner pays the same housing costs from their ABLE account, SSI doesn’t count it as ISM. A common approach is for the trustee to transfer funds into the ABLE account and for the account owner (or their representative) to pay the rent from there.
Food is no longer part of the calculation. Since September 30, 2024, SSA has stopped counting food as in-kind support. Groceries paid for by family or a trust no longer reduce SSI. Earlier versions of this post (and plenty of other sources online) said otherwise, so families should know the rule has changed.
Independence is the other reason. An ABLE account lets a person with a disability manage their own money, with their own card, for everyday expenses. For many of our clients’ adult children, that’s a meaningful step. The trust stays in the background as the long-term reserve.
What an ABLE Account Can’t Do
ABLE accounts are a strong tool, but they don’t replace a special needs trust:
- The annual cap limits how much can go in. At $20,000 a year, an ABLE account can’t absorb a large inheritance, life insurance proceeds, or the family’s estate. Those belong in a third-party special needs trust.
- Leftover funds may be subject to a Medi-Cal claim, but California provides important protections. California law provides significant protection for funds remaining in a CalABLE account after the beneficiary’s death, although Medi-Cal recovery can apply in limited circumstances. By contrast, if a California resident has an ABLE account through another state’s program, Medi-Cal may seek reimbursement from the funds remaining in the account..
- CalABLE funds pass through the beneficiary’s estate. CalABLE accounts cannot name a beneficiary to receive the remaining funds when the account owner dies. Instead, the remaining balance passes through the beneficiary’s estate under their will or trust, or under California’s intestate succession laws if they do not have an estate plan. This is an important consideration when deciding how much to keep in an ABLE account versus another type of special needs planning vehicle.
- Someone has to be able to manage it. If the account owner can’t manage the account, an authorized representative will need to. That person should be named and ready.
This is why we plan with both tools. The trust holds the long-term money and passes what’s left to family. The ABLE account handles day-to-day living and protects public benefits with items such as housing costs.
Relatives sometimes ask whether they should leave money to a person with a disability by naming their ABLE account. In most cases, the better choice is to leave it to the person’s third-party special needs trust, which can then fund the ABLE account as needed. Our post on special needs trusts and inheritance explains what to do if an inheritance has already arrived.
Opening and Managing a CalABLE Account
The account owner can open a CalABLE account online. If they can’t manage it themselves, an authorized representative can open and run it on their behalf. That can be a parent, legal guardian, agent under a power of attorney, conservator, sibling, grandparent, or representative payee.
To qualify, the person must meet the age-of-onset rule (i.e., they must have become disabled before age 46) and either receive SSI or SSDI based on disability or have a qualifying disability certified by a physician. Accounts can be opened with a small initial deposit, and CalABLE offers several investment options and a debit card for qualified expenses. For current fees and investment choices, visit CalABLE.
As your plan comes together, make sure your plan accounts for this. A trust that allows the trustee to fund an ABLE account, and a power of attorney that gives an agent authority to manage one, save a lot of trouble later.
We Are Here to Help
An ABLE account works best as part of a special needs plan that’s been built around your family. Our attorney team works with families across California to coordinate special needs trusts, ABLE accounts, and the rest of the plan so each piece does its job.
If you’d like to talk about how an ABLE account fits into your family’s plan, talk with our intake team.
(Originally published December 31, 2021; last updated September 29, 2026.)
