Families planning for a loved one with a disability often hear two terms: Special Needs Trust and ABLE account which stands for Achieving a Better Life Experience. In Florida, it is known as ABLE United. Both protect assets. Both help preserve government benefits. But they work very differently and there are benefits to using each independently and sometimes both together.
Here is a plain-language breakdown of both options so you can have a more informed conversation with your attorney.
What Is a Special Needs Trust?
A Special Needs Trust (SNT) is a legal document that holds assets for the benefit of a person with a disability without disqualifying them from government benefits like Medicaid or Supplemental Security Income (SSI).
Without this protection, a person on SSI or Medicaid cannot have more than $2,000 in their name of countable assets. Receiving an inheritance, a personal injury settlement, or a gift above that amount can result in losing those benefits immediately.
A Special Needs Trust solves that problem. Assets held in the trust do not count toward the $2,000 limit. A trustee manages the funds and uses them to pay for things that government benefits do not cover, such as transportation, education, recreation, and other quality-of-life expenses.
What Is an ABLE Account?
An ABLE account (Achieving a Better Life Experience) is a tax-advantaged savings account available to people with disabilities whose condition began before age 46. Florida's program is called ABLE United.
Like a Special Needs Trust, money in an ABLE account does not count against SSI and Medicaid eligibility, up to certain limits. The account owner controls the funds and can spend them on a wide range of qualified disability expenses.
ABLE accounts are simpler and less expensive to set up than a trust. There is no attorney required, no court involvement, and the account can be opened online.
What Are the Key Differences?
This is where the details matter.
Contribution limits: ABLE accounts have an annual contribution limit (currently $20,000 per year, indexed to inflation). Special Needs Trusts have no contribution limits.
Account balance limits: Most states cap ABLE account balances. The amount varies by state. In Florida, the maximum balance is currently $500,000. Trusts have no balance cap.
Medicaid payback: First-party Special Needs Trusts (funded with the disabled person's own money) require that remaining funds reimburse Medicaid upon the account holder's death. ABLE accounts have the same requirement. Third-party Special Needs Trusts (funded by family members) do not have this requirement, which is a significant advantage for families planning ahead.
Who can contribute: Anyone can contribute to a Special Needs Trust. ABLE accounts can receive contributions from anyone as well, but the annual limit applies in total across all contributors.
Control: ABLE accounts give the individual direct control over their own funds, which promotes independence. Trusts require a trustee to manage and approve distributions.
When Is a Special Needs Trust the Better Choice?
A Special Needs Trust is typically the right choice when:
The person is expected to receive a large inheritance or settlement. The family wants to leave money at death without triggering a Medicaid payback requirement. The person needs a structured plan with professional oversight.
When Is an ABLE Account the Better Choice?
An ABLE account works well when:
The amounts involved are modest. The person can manage their own finances with some independence. The family wants a simple, low-cost option for ongoing contributions.
Can You Have Both?
Yes. Many families use both tools together. An ABLE account handles day-to-day expenses and promotes autonomy. A Special Needs Trust holds larger assets and handles long-term planning.
Used together, they give families flexibility at every stage.
Talk to an Attorney Before Deciding
Every family's situation is different. The right answer depends on your loved one's age, the source of the funds, the amount involved, and your long-term goals.
At Chaya Posner Law, we help families in Davie and Broward County build plans that protect both assets and benefits. Contact us to schedule a consultation.
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