How is this different from a Special Needs Trust or Pooled Trust?

An ABLE account won’t replace a Special Needs Trust or Pooled Trust. There are some key differences that are meant to give people with disabilities and their families more options.

With an ABLE account:

  • There are less expenses than setting up a trust

  • The beneficiary owns the funds and can access them for eligible expenses

  • Earnings are tax-free advantaged

  • There’s a yearly limit of $15,000 and a lifetime maximum of $400,000

  • Funds can be used for housing without affecting benefits

With a Special Needs Trust or Pooled Trust:

  • You have to set up a trust

  • The beneficiary has to get approval of the trustee to receive a disbursement

  • The earnings are taxed at trust rates

  • There are no limits on contributions or balances

  • Amounts in a Third-Party Special Needs Trust are generally not subject to a Medicaid recovery upon the death of the individual with disabilities

  • Funds can be used for housing, but benefits will be affected