Clawback Drawback
But just as the estates of elderly people are subject to what is known as a "clawback" if they receive Medicaid benefits, the estates of disabled people who die with money in their ABLE accounts would also be subject to Medicaid claims.
That's a fairly significant drawback for many families, said financial planner, John W. Nadworny.
These families may prefer to save for their children in their own names and then set up a special needs trust in their wills to take care of their children after the parents' death, said Nadworny, director of special needs financial planning at Shepherd Financial Partners in Winchester, Massachusetts.
Still, ABLE accounts would be a boon for disabled people who want to save on their own without jeopardizing government benefits, Nadworny said.
And publicity about the accounts will help families focus on the need to save for children with disabilities, rather than simply hope the government will take care of them.
"The government will do the best it can" but benefits aren't guaranteed, said Nadworny, who co-authored the book, "The Special Needs Planning Guide: How to Prepare for Every Stage of Your Child’s Life."
"This educates people that they have to save."