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 $310,000. 
  • 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.