ABLE Accounts and Special-Needs Trusts: Saving Without Losing Benefits

Here's a cruel catch families run into: save too much in a regular account, and a person with disabilities can lose the very benefits they depend on. Two tools exist to solve exactly this. Here's the plain-language version.

The problem

Needs-based benefits like SSI and Medicaid have strict resource limits. A well-meaning gift, inheritance, or savings account can push someone over the limit and cut off their benefits. Families need a way to hold money for the person without it counting against them.

ABLE accounts

An ABLE account is a tax-advantaged savings account for people whose disability began before a set age. Money in it, within limits, generally doesn't count against benefits when used for qualified disability expenses — housing, education, care, and more.

Special-needs trusts

A special-needs (or supplemental) trust holds larger assets for the person's benefit, managed by a trustee, without the funds counting as the person's own resources. It's the common tool for inheritances or lawsuit settlements.

Which tool fits — and how to set it up correctly — depends on the amounts and the family's situation. This is an area where families almost always work with an attorney who focuses on this field.

Verify every step at the official source

Don't take anyone's word for the rules — including ours. Confirm current details here:

ABLEnrc.org — the national ABLE resource center
SSA.gov — how trusts affect SSI
Medicaid.gov — resource rules

Save for their future safely

TROVELL's Special Needs Family Edition explains ABLE accounts and trusts in plain language, with the rules pointed to their source.

Browse the Reference Library

This article is general information for educational purposes only. It is not legal, medical, tax, or financial advice, and it does not tell any reader what to do. Rules and benefits change and vary by state — confirm your situation with a licensed professional and at the official sources above.