MBR Financial, Inc.
2000 West Loop South
Ste. 1510
Houston, TX 77027

What is an ABLE account?

ABLE (Achieving a Better Life Experience) accounts are tax-advantaged savings accounts for individuals with disabilities that are generally used to cover qualified disability expenses. States can create qualified ABLE programs for persons who become disabled prior to age 26. A disabled person (or the disabled individual's parent or guardian, or an agent with a power of attorney) can create an ABLE account under any state's ABLE program. Generally, only one ABLE account is permitted per disabled person at a time. ABLE accounts are relatively new, so you will need to check which states currently have ABLE programs.

Contributions to the ABLE account are subject to an annual and a cumulative limit. The annual limit for total contributions by all contributors combined is equal to the federal annual gift tax exclusion amount ($14,000 in 2016). The cumulative limit applies to the extent that a contribution would cause the account balance to exceed the state's maximum aggregate limit for all Section 529 qualified tuition program accounts for the beneficiary. (Fees and expenses may be associated with investment options offered. All investing involves risk, including the possible loss of principal, and results are not guaranteed.)

Distributions from an ABLE account can be made only to the designated beneficiary. The ABLE account and distributions for qualified disability expenses of the designated beneficiary are generally not subject to federal income tax.

Generally, the ABLE account is disregarded for purposes of determining eligibility for, and the amount of, any assistance or benefit provided under certain means-tested federal programs. However, for purposes of the Supplemental Security Income program, any distributions from the ABLE account for certain housing expenses are not disregarded, and the account balance is considered a resource of the designated beneficiary to the extent the balance exceeds $100,000.

Upon the death of the beneficiary, any state can file a claim for the total medical assistance paid for the beneficiary under that state's Medicaid plan (as reduced by any premiums paid under a Medicaid buy-in program) after the establishment of the ABLE account.

IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.