Both ABLEnow accounts and Special Needs Trusts (SNTs) allow an individual with a disability to accumulate resources without jeopardizing eligibility for certain benefits such as Medicaid and Supplemental Security Income (SSI).
These valuable financial tools can be essential components of a comprehensive special needs financial plan. ABLEnow and SNTs can work hand-in-hand to meet the needs of many eligible individuals and their families.
For example, ABLEnow account owner Christine turned to Commonwealth Community Trust (CCT) when she received an inheritance. CCT is a nonprofit organization that administers Pooled Special Needs Trusts (PSNTs) throughout the United States. PSNTs are funded with the beneficiary’s own money or the funds of a third party such as a parent, grandparent, or family member.
Christine’s multiple sclerosis (MS) prevents her from working, so she depends on SSI and Medicaid to meet her living and medical expenses. Sometimes, however, those benefits are not enough. “Thank God I have my trust and ABLEnow account. I’d be in trouble if I didn’t have them,” says Christine.
ABLE accounts have an annual contribution limit of $15,000, so if a person with a disability receives a large inheritance or settlement, establishing a SNT can be an appropriate option to protect eligibility for public benefits.
Unlike certain SNTs, funds in an ABLE account can be used to pay food, housing, and housing-related expenses. A SNT can disburse as much as $15,000 each year directly into a beneficiary’s ABLE account for these qualified disability expenses that exceed the monthly SSI benefit. SNT beneficiaries can use their trust and ABLE account together to minimize fees and grow funds tax-free through ABLE investment options.
Beneficiaries can enjoy the increased quality of life that comes with increased financial resources, while still maintaining their access to critical government services and benefits. Christine was able to use the money more effectively to support herself now and in the long-term. “It’s a blessing,” she says.
Read more about how Christine uses her ABLEnow account alongside her trust in this ABLE National Resource Center article written by Joanne Marcus, MSW, President/CEO of Commonwealth Community Trust.
ABLEnow cannot and does not provide legal, financial or tax advice, and the foregoing information should not be construed as such with respect to the consequences for any particular individual as a result of contributions or withdrawals from an ABLEnow account. Since each individual’s legal, financial, and tax situation is unique, a qualified professional should be consulted on any of the issues discussed in this article.