What’s the difference between an ABLE account and a Special Needs Trust?

  • Although both can be established to enable a person with a disability to acquire assets without jeopardizing benefits, it’s important to know that an ABLE account allows the person with the disability to open and manage the account on his/her own. The ABLE account must be used for any qualifying disability-related expense, and upon the death of the beneficiary, the remaining funds may be paid to Medicaid if the person received Medicaid in his/her lifetime.

  • A Special Needs Trust is set up so that someone designated as a trustee maintains complete discretion over the Trust property and is in charge of spending money on behalf of the person with a disability. The trustee does not provide money directly to the person but rather spends the money on that person’s behalf. A Special Needs Trust can be used for any expense the beneficiary may have. The Trust can also maintain ownership of property, houses, cars, retirement accounts and more, and can be left to someone else if/when the beneficiary dies.

Please note that people can maintain both an ABLE account and a Special Needs Trust.