AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- OFFICE OF HEALTH AND HUMAN SERVICES

2026 Regular Session Introduced by John Burke and 4 co-sponsors

SB 2987 shields ABLE funds from most creditors during life and, after death, limits state recovery to federal-law requirements, preserving assets.

06/05/2026 Referred to House Finance

Bill Summary: SB 2987 (Rhode Island, 2026)

Purpose and intent

This act modifies provisions related to the state Office of Health and Human Services and specifically addresses how ABLE (Achieving a Better Life Experience) program funds are treated after the death of a designated beneficiary.

The main intent is to prevent the state from seeking reimbursement from an ABLE account for expenditures made on behalf of a disabled Rhode Islander after the designated beneficiary dies, aligning state actions with a more caregiver- and beneficiary-friendly approach to ABLE assets.

Key provisions and changes

Section 42-7.2-20.8 (Creditors) is amended to state:

Money in the ABLE program remains exempt from creditor process and is not subject to attachment, garnishment, seizure, or other legal or equitable process to pay debts or liabilities of any contributor or beneficiary.
However, upon the death of the designated beneficiary, the state residency of the designated beneficiary becomes a creditor of the ABLE account for purposes of debts or liabilities to the state arising from the recipient’s death.
Importantly, upon the death of the designated beneficiary, state agencies or instrumentalities shall not seek payment from the ABLE savings trust account or its proceeds for benefits provided to the beneficiary, except as required by federal law (i.e., 26 U.S.C. § 529A).

Effective date: The act takes effect upon passage.

Affected parties and entities

ABLE account holders and designated beneficiaries residing in Rhode Island.

Rhode Island state agencies and instrumentalities administering or interacting with ABLE accounts.

Creditors seeking reimbursement for expenditures related to a beneficiary’s care after the beneficiary’s death (the bill restricts state-level recovery and clarifies federal-law boundaries).

Procedural and timeline aspects

Introduced: March 4, 2026 by Senators LaMountain, Burke, Dimitri, Felag, and Quezada.

Referred to Senate Judiciary (General Treasurer noted in document).

Scheduled for hearing/consideration: May 21, 2026 (action history shows recent scheduling).

Effective date: Immediate upon passage.

Practical impact and considerations

The bill reinforces the protected status of ABLE account funds from most creditor actions during a beneficiary’s life.

After death, the state’s right to recover expenditures from ABLE accounts is limited to what federal law requires (26 U.S.C. § 529A) and excludes broad state reimbursement claims, except where federal law mandates recovery.

This change could reduce potential state recoveries and protect the remaining ABLE assets for the beneficiary’s estate or designated heirs, within federal constraints.

Federal law remains a constraining factor; any required recovery under 529A would still apply.

Summary

SB 2987 seeks to shield ABLE account funds from most creditor claims in Rhode Island, with a narrow exception tied to federal law upon the death of the beneficiary. It clarifies that the state will generally not pursue reimbursement from ABLE accounts for benefits provided, thereby preserving more of the beneficiary’s assets beyond death, subject to federal requirements. The bill is in the legislative process with a scheduled hearing in May 2026.