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Those who have cared for a loved one with disabilities know how difficult that road can be.

Some people care for aging parents, and others care for children who may have lifelong special needs. Caring for the disabled can be hard work and caregivers are often required to sacrifice financially.

There are government needs-based options like Social Security Disability, but these options often require abject poverty before benefits can be paid.

Attorneys have discovered clever ways and loopholes to help people qualify for benefits while retaining a few precious assets that can significantly enhance the quality of life for those in need. Unfortunately, this type of legal work can be complicated and expensive.

In 2014, a bill was signed into law called the Achieving a Better Life Act. This bill aimed to provide some relief for people who provide care for those who have disabilities and need help.

This bill created a new type of account called an ABLE 529. California established its version called CalABLE.

A CalABLE is an account that can be created to hold assets that will not count against a special-needs individual as they try to qualify for government aid. The investment growth inside CalABLE accounts will also not be taxable as long as the funds are used for qualified expenses.

A key benefit of the CalABLE account is that it may help people qualify for government benefits even if they can’t afford to hire an attorney. I would still strongly recommend that people consult an attorney.

The list of qualified expenses is long. The criteria require funds to be used to help maintain or improve health, independence or quality of life which can apply to general health, transportation, employment support, and many other areas.

You might be surprised how the state interprets the above criteria so check before you spend.

There are rules on the amount you can contribute to a CalABLE. There is a $15,000 annual limit.

There are also lifetime limits, but to qualify for SSI the account cannot have more than $100,000. Those hoping to be eligible for Medi-Cal can have up to $529,000 in a CalABLE.

California controls CalABLE accounts. You can choose to use your CalABLE account like a savings and checking account or use longer-term investing options. California has chosen TIAA-CREF as a custodian for these accounts.

Not just anyone can use or open a CalABLE account. You must apply at the CalABLE website to see If you are eligible.

Generally, anyone who is eligible to receive Social Security Disability is eligible to open one of these accounts, but other scenarios can qualify so be sure to check.

CalABLE legislation is vast, well beyond the scope of this column. You must do research and consult with an attorney to discover if a CalABLE is a good fit for you and your needs.

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Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155. MillsWealth.com. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.

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