Two tools that protect benefits in different ways — and why many families use both.
For most families, the answer isn't either/or — it's both. An ABLE account and a special needs trust both let a person with a disability hold money without losing SSI or Medicaid, but they solve different problems. An ABLE account is simple, low-cost, and controlled by the person themselves, shielding up to $100,000 from SSI. A special needs trust holds unlimited assets, is managed by a trustee, and is the right home for larger sums like life insurance proceeds and inheritances.
An ABLE account (Achieving a Better Life Experience) is a tax-advantaged savings account for individuals with disabilities. It works much like a 529 college-savings plan: contributions grow tax-free, and withdrawals are tax-free when used for qualified disability expenses such as housing, education, transportation, healthcare, and assistive technology. The first $100,000 in the account is excluded from SSI's resource limit. As of January 2026, a person can open one if their disability began before age 46 — up from the previous cutoff of 26, a change that opened eligibility to millions more people.
A special needs trust is a legal arrangement that holds assets for a person with a disability without those assets counting toward SSI and Medicaid limits. A trustee manages the money and spends it on the beneficiary's behalf. Unlike an ABLE account, a trust can hold an unlimited amount, which makes it the right vehicle for substantial funding such as a life insurance death benefit or a family inheritance.
An ABLE account shines for smaller savings goals and everyday expenses, and for giving the individual a measure of financial independence and control over their own money. If your loved one wants to save earnings from a job, manage day-to-day disability costs, or build a modest cushion, ABLE is simple and effective.
A trust is the right choice for larger sums and long-term protection — especially life insurance proceeds, inheritances, and any amount that would exceed ABLE's $100,000 SSI threshold. Because a trustee oversees the money, a trust also provides protection when the beneficiary cannot manage funds themselves, and it lets you direct where any remaining assets go.
The two tools complement each other. A common approach is to hold the bulk of a family's funding — the life insurance, the estate — in a third-party special needs trust, while keeping an ABLE account for the beneficiary's everyday spending and independence. The trustee can even move money from the trust into the ABLE account as needed.
One cautionKeep an eye on the ABLE balance. Amounts above $100,000 suspend SSI until the balance drops back down, and using ABLE funds for housing has specific timing rules. For larger amounts, the trust is the safer home. When in doubt, get advice before moving money.
Our free Care Cost Calculator estimates your loved one's lifetime care costs and shows the funding gap — a clear, no-pressure place to begin.
Estimate Care CostsThis article is for educational purposes only and is not legal, tax, or financial advice. Eligibility rules and dollar figures change and vary by state. Please consult a qualified special needs attorney and your advisory team about your family's specific situation.