When I started researching financial planning for my son, the first question I kept running into was: “Should I get an ABLE account or a special needs trust?”
The answer is both. That’s not a cop-out — it’s the reality. They do different things, protect against different risks, and cover different time horizons. Using one without the other is like locking your front door but leaving the back door wide open.
I have both set up for my son. Here’s how they work together, where each one falls short on its own, and what I wish I’d understood before I started.
The Quick Comparison
If you want the overview before the details:
| ABLE Account | Special Needs Trust | |
|---|---|---|
| What it is | Tax-advantaged savings account | Legal trust managed by a trustee |
| Cost to set up | Free or minimal | $2,000–$5,000+ (attorney fees) |
| Annual contribution limit | ~$18,000/year | No limit |
| SSI impact | No impact up to $100,000 | No impact (if properly structured) |
| Who controls the money | Account owner or authorized signer | Trustee (not your child) |
| Access to funds | Easy — debit card, withdrawals | Trustee makes disbursements |
| Protection from exploitation | Limited — account holder can be manipulated | Strong — your child doesn’t control it |
| After death | State can reclaim for Medicaid costs | Can pass to other family (depending on type) |
| Best for | Day-to-day expenses, accessible savings | Long-term wealth, inheritance, large assets |
If that table answered your question, great. If you want to understand the why behind each row, keep reading.
What the ABLE Account Does Well
I put $1,000/month into my son’s ABLE account through Florida’s ABLE United program. It’s the workhorse of his financial plan — the account I interact with regularly and the one that handles his day-to-day needs.
Strengths:
- Accessible. Some programs (including Florida’s) offer a debit card. I can pay for his disability-related expenses — housing, transportation, groceries, healthcare — directly from the account without paperwork for each purchase.
- Easy to set up. No attorney needed. You can open one online in an afternoon (though the paperwork takes a couple weeks to process).
- Doesn’t count against SSI. Up to $100,000 in the account without affecting his Supplemental Security Income. This is the whole reason it exists — letting people with disabilities save without being punished by the $2,000 asset limit.
- Tax-advantaged. Earnings grow tax-free as long as withdrawals are for qualified disability expenses.
- Flexible spending. “Qualified disability expenses” covers a wide range — housing, food, transportation, education, assistive technology, even legal fees. It’s much broader than most people expect.
Where the ABLE Account Falls Short
Here’s what the ABLE account can’t do — and why the trust matters.
It doesn’t protect against exploitation.
This is my biggest concern as a parent. My son has profound autism. He trusts people. He can be manipulated. An ABLE account with a debit card is accessible — that’s a feature when I’m managing it, and a vulnerability when I’m not.
If someone gained access to the account — or convinced my son to make withdrawals — the money could be gone. The ABLE account has no built-in gatekeeper beyond whoever is the authorized signer. Once I’m gone, whoever takes over that role controls access to the funds.
A special needs trust has a trustee — a legal fiduciary who controls disbursements. My son can’t be talked into giving away money he doesn’t control. That’s protection the ABLE account doesn’t provide.
The contribution limit caps how much you can save.
At ~$18,000/year, the ABLE account is great for ongoing savings. But it can’t absorb a large inheritance, a life insurance payout, or a legal settlement. If I leave my son $200,000 in life insurance, it can’t go into the ABLE account all at once. The trust has no contribution limit — it can hold whatever needs holding.
The Medicaid payback provision.
When the ABLE account beneficiary dies, the state can file a claim against the remaining balance to recover Medicaid costs paid during the person’s lifetime. The state gets paid first. Whatever’s left goes to the estate.
This means the ABLE account is effectively a spend-down vehicle. Money goes in, gets used during your child’s life, and what’s left gets claimed by the state. If you want remaining assets to pass to other family members, the ABLE account isn’t the tool for that.
A third-party special needs trust (the most common type parents set up) does not have a Medicaid payback requirement. When the beneficiary dies, remaining assets go where the trust document says — to siblings, other family, a charity, wherever you designate.
The $100,000 SSI threshold.
If the ABLE account balance exceeds $100,000, SSI cash payments are suspended. Not terminated — suspended — and they resume when the balance drops back down. But if your child depends on that monthly SSI check for living expenses, even a temporary suspension creates problems.
The trust has no such threshold. It can hold millions without affecting SSI, as long as it’s structured properly.
What the Special Needs Trust Does Well
Strengths:
- No contribution limit. Inheritance, life insurance, legal settlements, gifts of any size — the trust holds it all.
- Trustee control. A trustee — not your child — manages disbursements. This protects against exploitation, impulsive spending, and financial manipulation. For my son, this is everything.
- No SSI balance threshold. The trust can hold any amount without triggering a suspension of benefits (when properly structured as a third-party trust).
- Estate planning flexibility. A third-party special needs trust can name remainder beneficiaries — where the money goes after your child passes. The trust can provide for your child for life and then pass remaining assets to siblings or other family.
- Legal standing. The trust is a legal entity with enforceable terms. If a future caregiver mismanages funds, there are legal remedies. An ABLE account doesn’t have the same level of legal protection.
Where the Special Needs Trust Falls Short
It’s not accessible for daily spending.
You can’t swipe a debit card linked to a trust at the grocery store. Every disbursement goes through the trustee. That’s the point — the protection comes from the lack of direct access. But it also means the trust isn’t practical for daily or weekly expenses. Getting money out requires the trustee to approve and process each request.
This is exactly where the ABLE account fills the gap. Day-to-day spending comes from the ABLE account. The trust handles the big picture.
It costs money to set up.
You need an attorney — specifically one who specializes in special needs or disability law. Expect $2,000 to $5,000 or more for the trust document, depending on complexity and your location. This isn’t a place to use a generic online template. A poorly drafted trust can fail to protect benefits, and fixing a broken trust costs more than setting one up correctly.
The trustee question is hard.
Choosing a trustee is one of the most important and most difficult decisions in this entire process. This person will control your child’s financial life — potentially for decades after you’re gone. They need to be trustworthy, financially competent, and available for the long term.
Family members can serve as trustees, but they bring their own complications — what if they have a financial crisis and the temptation to “borrow” from the trust becomes real? Professional trustees (banks, trust companies) are objective but charge annual fees and don’t have a personal relationship with your child.
I still think about this. It’s not a decision with a clean answer.
Trust disbursements can affect SSI if handled wrong.
The trust itself doesn’t count as a resource for SSI purposes. But how money comes out matters. If the trustee gives your child cash directly, that cash counts as income and can reduce the SSI payment. The proper approach is for the trustee to pay for things on your child’s behalf — paying the landlord directly, paying the utility company directly — rather than handing your child money.
This is another reason you need an attorney who knows disability law. The rules around trust disbursements are specific and not intuitive.
How They Work Together
Here’s how I use both:
| Situation | Which Tool | Why |
|---|---|---|
| Monthly savings ($1,000/mo) | ABLE Account | Easy contributions, accessible funds, no attorney needed per deposit |
| Groceries, gas, daily expenses | ABLE Account | Debit card access for qualified disability expenses |
| Life insurance payout | Special Needs Trust | Large lump sum, no contribution limit, protected from exploitation |
| Inheritance from family | Special Needs Trust | Family wills should direct bequests to the trust, not to my son directly |
| Assisted living community costs | Both | ABLE for regular monthly costs, trust for large deposits or buy-ins |
| Long-term wealth preservation | Special Needs Trust | No balance cap, no Medicaid payback (third-party trust), trustee protection |
| After my son passes | Special Needs Trust | Remaining trust assets go to designated beneficiaries. ABLE balance goes to state first. |
Think of it this way: the ABLE account is the checking account — accessible, flexible, for regular use. The trust is the vault — protected, controlled, for the long term. You wouldn’t keep your life savings in a checking account, and you wouldn’t try to buy groceries from a vault. Each tool has its job.
The Order to Set Them Up
If you have neither and you’re just starting:
- Open the ABLE account first. It’s free, you can do it online, and you can start contributing immediately. Even $50/month is a start. Compare state programs at the ABLE National Resource Center.
- Set up the special needs trust as soon as you can afford the attorney fees. Don’t wait for a “perfect” time. If something happens to you before the trust exists, any inheritance goes to your child directly — which can destroy their benefits. The trust is how you prevent that.
- Update your will and beneficiary designations. Your will should direct anything intended for your child to the trust. Life insurance beneficiary designations, retirement account beneficiaries, bank account payable-on-death designations — all of these bypass your will and need to be updated separately to point to the trust.
- Tell your family. Everyone who might ever leave money to your child needs to know: it goes to the trust or the ABLE account. Not to your child. Not to a regular savings account. One wrong deposit can destroy benefits.
What This Costs
Total cost to set up both:
- ABLE account: Free to open. Some programs have small annual fees ($0-50 depending on state and investment options).
- Special needs trust: $2,000-$5,000+ in attorney fees. Worth every dollar.
- Ongoing: ABLE account has no maintenance cost beyond investment fees. Trust may have annual trustee fees if you use a professional trustee.
If the trust attorney fees feel out of reach right now, open the ABLE account and start saving. Make the trust a goal — something you work toward. But don’t put it off indefinitely. The trust is what protects your child when you can’t.
The Bottom Line
When I first started this, I thought I was choosing between two options. I spent weeks reading about ABLE accounts vs. special needs trusts like I was picking one or the other. That was the wrong question.
The right question is: how do these two tools work together to protect my son?
The ABLE account gives him accessible savings for his daily life. The trust protects his long-term future from the world and from the people who might try to take advantage of him. Together, they create something neither one can do alone — a financial plan that’s both usable today and secure for decades.
My son is 21. He might live to 55 or 60. That’s 30 to 40 years I need to plan for. The ABLE account and the trust aren’t just financial tools. They’re how I take care of him from the future.
If you need to understand either tool in more depth: what I wish I knew about ABLE accounts and my full special needs financial planning guide.
— Thomas