ABLE Accounts vs. Special Needs Trusts

Purpose:
To help Hub staff explain the key differences between ABLE accounts and Special Needs Trusts (SNTs), and when each may be a better fit for a person with a disability.

Q&A

Q: What’s the difference between an ABLE account and a Special Needs Trust?
Both ABLE accounts and Special Needs Trusts (SNTs) help people with disabilities save money without losing eligibility for programs like Supplemental Security Income (SSI) and Medical Assistance (MA) — but they work in different ways.

Here’s a quick overview:

Feature	ABLE Account	Special Needs Trust (SNT)
Who can open one	Person whose disability began before age 26	Anyone with a qualifying disability (no age limit)
Who owns the account	The person with the disability	The trust (managed by a trustee)
Annual contribution limit	Up to $19,000, or $34,060 if working	No annual limit (but rules depend on trust type)
How funds are used	Disability-related expenses like housing, health care, transportation, or education	Broader disability-related needs, as outlined in the trust document
Access to money	The person with the disability can manage their own account	The trustee controls spending
Tax benefits	Earnings grow tax-free if used for qualified expenses	No tax benefits
Effect on benefits	Not counted for MA or SNAP; SSI only affected if balance exceeds $100,000	Not counted for MA or SSI if set up correctly
Setup cost	Usually free or low-cost	Can be expensive (requires legal setup)

Q: Can someone have both an ABLE account and a Special Needs Trust?
Yes. In fact, many people use both.
For example:

• An ABLE account can handle day-to-day spending for the person’s own disability-related needs.
• A Special Needs Trust can hold larger sums — such as an inheritance or legal settlement — that might otherwise affect benefits.

Funds can also be transferred from a Special Needs Trust into an ABLE account to give the person more control over small purchases or recurring expenses.

Q: How can someone in Minnesota set one up?

• ABLE account: Open online through the Minnesota ABLE Plan.
• Special Needs Trust: Must be drafted and managed according to DHS Trust Policy and federal rules. It’s best to consult a disability or estate planning attorney, or contact a trust administrator approved by DHS.

Internal Notes

• Hub staff should not provide legal advice about which trust type to choose — instead, refer individuals to a qualified attorney for personalized guidance.
• ABLE accounts offer more independence for smaller savings and routine expenses; SNTs are better for managing larger sums or protecting assets long-term.
• When both are used, confirm that transfers between them don’t exceed ABLE contribution limits.