Special Needs Trust Or ABLE Account

A Special Needs Trust (SNT) and an Achieving a Better Life Experience (ABLE) account offer tax-free ways for individuals with disabilities to save money while maintaining eligibility for essential public benefits. Both financial tools help secure resources without risking access to crucial programs like Supplemental Security Income (SSI) and Medicaid. By utilizing these savings options, individuals with disabilities can alleviate financial stress and improve their quality of life.

Choosing the Right Option

ABLE accounts and special needs trusts have distinct rules regarding savings limits, contributions, and how funds can be used. Additionally, the type of trust—whether a first-party or third-party SNT—can impact eligibility and management considerations.

Selecting the most suitable option depends on individual needs and financial goals. Consulting with a special needs planning attorney can provide valuable insights into whether an ABLE account, a special needs trust, or a combination of both best suits the situation.

ABLE accounts are generally easier to establish and manage; however, they come with annual contribution limits that may restrict long-term savings potential.

On the other hand, special needs trusts do not have contribution limits, making them a beneficial option for larger financial planning. However, they can be more complex and costly to set up and administer.

Using both options together can be advantageous—ABLE accounts can cover everyday expenses, while special needs trusts can fund larger, non-covered expenses that go beyond public benefit programs.

Read more about these options. If you have questions or would like to meet with an attorney, give our office a call at 605-275-5665.