ABLE Account Decision Guide Series
Understanding ABLE Accounts, Special Needs Trusts and Pooled Trusts
January 2023
The ABLE National Resource Center and the Special Needs Alliance collaborated on this Decision Guide which will educate individuals with disabilities, their families and other stakeholders on how ABLE accounts and pooled trusts (PT) and special needs trusts (SNT) can work together to contribute to improve a person’s quality of life. Each option makes it possible for a person with a disability to have savings greater than $2,000 and still maintain eligibility for federally-funded means-tested benefits like Supplemental Security Income (SSI) and Medicaid which often form the foundation for special needs planning.
There are advantages and disadvantages to each type of account and determining which option, or whether several options, are most appropriate depends upon a person’s situation. For many families, an ABLE account is inexpensive and easy to open and use with a SNT or PT. To open any of these accounts, a person must meet the eligibility requirements. A person is not required, however, to be receiving disability or means-tested benefits. To learn more about ABLE account eligibility, review the decision guides, “Am I ABLE-eligible?” and “Selecting and Opening an ABLE Account.” Most ABLE accounts can easily be opened online in less than 10 minutes. Some ABLE plans are for in-state residents only, but most are open to anyone who is ABLE-eligible.
This Decision Guide compares an ABLE account to trusts that are often opened to reduce countable resources so a person can save and invest money and maintain their eligibility for federally-funded, means-tested benefits. There are many types of trusts with different eligibility rules and many individuals receive a variety of benefits which could be affected by income or savings. This Decision Guide will not address all types of trusts or those designed to reduce countable income. For advice and guidance involving all types of trusts, begin at the Special Needs Alliance website to find an attorney.
In making your decision, it is important to consider your individual situation along with more than one factor.
Click on each of the following questions to learn more:
- Which type of account are you thinking about opening?
- How much money do you expect to save each year?
- Do you receive SSI or other means tested benefits?
- What do you plan to pay for or purchase?
- How frequently do you plan to use the account?
- Do taxes matter to you?
- Is the account revocable?
- Are you concerned with Medicaid payback?
- What are key advantages and disadvantages of each type of account?
Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.