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How do ABLE accounts differ from special needs trusts?

Special needs trusts are one way to provide a disabled person with the income they need to survive, while still retaining their government benefits. However, not everyone in New Jersey has enough money to open a special needs trust. An option that may be available to these people, however, is an ABLE account.

An ABLE account can provide for individuals who are significantly disabled and will need financial support for the rest of their lives. An ABLE account can provide the beneficiary to the account with as much as $100,000 in assets while still allowing that beneficiary to retain or obtain Supplemental Security Income benefits. The funds in an ABLE account can be used for many purposes one may encounter in their day-to-day life, such as school expenses, transportation expenses, attorney fees and other expenses that will enhance the beneficiary's quality of life.

Any person is permitted to add funds to an ABLE account, up to $15,000 annually. Up to $15,000 of a structured settlement from a lawsuit can also serve as a means for funding an ABLE account. ABLE accounts allow people to contribute small amounts of money over time, rather than a large one-time payment. This means ABLE accounts may be more practical for people of limited means than a special needs trust would be.

In the end, both special needs trusts and ABLE accounts can provide a means for disabled individuals to obtain an income that is not counted when it comes to eligibility for government benefits. Many disabled individuals depend both on the income from these accounts and government benefits to meet their daily living expenses and medical care. People should not need to impoverish themselves simply to receive the benefits they need.

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