Our friends at Ellen Williamson Law, PC discuss how for families planning around a loved one’s disability, special needs trusts tend to get most of the attention. A less well-known but increasingly useful tool sits alongside them: the ABLE account. It won’t replace a special needs trust for larger sums, but for many families it fills a gap the trust doesn’t — and it’s often overlooked simply because fewer people know it exists. A living trust lawyer can help families determine how a living trust, a special needs trust, and an ABLE account can work together to support a loved one with a disability while protecting assets and preserving eligibility for public benefits.
What an ABLE Account Is
ABLE stands for Achieving a Better Life Experience. It’s a tax-advantaged savings account created specifically for people with disabilities, allowing them to save and invest money without jeopardizing eligibility for means-tested benefits like Medicaid or Supplemental Security Income (SSI).
Normally, those benefit programs impose strict limits on how much a recipient can own before losing eligibility. An ABLE account carves out an exception: funds held in the account, up to certain limits, don’t count against those asset thresholds the way a regular bank account or investment account would.
Who Qualifies
Eligibility is generally tied to the age at which the disability began, not the current age of the account holder — meaning many adults with disabilities acquired earlier in life can qualify to open an account even later in life. The specific qualifying criteria and contribution limits are set by federal law and adjusted periodically, so it’s worth confirming current figures rather than relying on older information.
What the Money Can Be Used For
Funds in an ABLE account can be spent on a wide range of “qualified disability expenses” — a broad category that includes housing, education, transportation, employment training, assistive technology, health and wellness costs, and other expenses related to living with a disability. This flexibility is one of the account’s biggest advantages: the beneficiary (or their authorized representative) can control day-to-day spending directly, rather than routing every expense through a trustee.
How It Compares to a Special Needs Trust
ABLE accounts and special needs trusts aren’t competitors — they typically work best together, and each has limitations the other can offset:
- Contribution limits. ABLE accounts have an annual contribution cap, and total account balances above a certain threshold can begin to affect SSI eligibility. Special needs trusts have no such caps, making them better suited for larger sums, like an inheritance or settlement.
- Control and flexibility. ABLE account funds are typically more directly accessible to the beneficiary, without needing a trustee to approve each distribution. A trust generally requires trustee involvement for spending decisions.
- Setup and cost. Opening an ABLE account is usually simple and low-cost, similar to opening any other savings or investment account. Establishing and administering a trust involves more legal and administrative overhead.
For many families, the practical answer is to use both: an ABLE account for everyday flexible spending and smaller savings, and a special needs trust to hold larger assets — like an inheritance — that would otherwise exceed what an ABLE account can efficiently hold.
Why This Gets Missed
Because ABLE accounts are relatively new and less widely discussed than trusts, many families planning for a loved one’s future don’t know the option exists, or assume a special needs trust is their only choice. Understanding both tools — and how they complement each other — allows for a more complete and flexible plan, rather than relying on one tool to do a job it wasn’t fully designed for.
Anyone supporting a family member with a disability should ask an estate planning attorney whether an ABLE account fits into the broader plan, particularly alongside any trust already in place or being considered.