Special Needs Trusts (SNT’s) vs. ABLE Accounts: Part 2

We understand that it can sometimes become extremely overwhelming when it comes to deciding whether a Special Needs Trust or an ABLE account is more appropriate for your specific situation.

Since we are firm believers in trying to make things less complicated, since Life is Complicated Enough, we wanted to break down the differences between the two and how they can sometimes work together.

Special Needs Trusts: a brief overview

A Special Needs Trust allows those with resources in excess of the limitations to maintain their needs-based public benefits, such as Medicaid. There are two types of Special Needs Trusts: first-party and third-party. First-party Special Needs Trusts – which can be managed by a Trustee of the beneficiary’s choosing or can be managed collectively by a Pooled Special Needs Trusts – contain the disabled individual’s money, gained by either a direct inheritance or a personal injury award, perhaps. A Third-Party Special Needs Trust, on the other hand, contains assets gained via other individuals. For instance, if a parent chooses to leave funds to their child with disabilities, as opposed to the money being left for them outright.

In a Third-Party Special Needs Trust, there is no Medicaid payback obligation when the Medicaid beneficiary passes away, as opposed to there being a payback obligation with a First-Party Special Needs Trust.

ABLE Accounts: a brief overview

ABLE, which stands for Achieving a Better Life Experience, was brought into existence by the ABLE Act of 2014.

As Part 1 of this series discussed, ABLE accounts may be established by any Florida resident developed a qualifying disability prior to the age of 26. These accounts can receive yearly contributions, of up to $15,000, of gift-tax exemptions. Contributions to ABLE accounts can be applied to a number of medical expenses, such as education, living expenses, therapies, transportation, legal fees, funeral costs, etc.

Up to $100,000 can be retained in an ABLE account while maintaining SSI eligibility.

Up to $418,000 can be retained in an ABLE account if SSI is not necessary, but Medicaid is.

ABLE Accounts protect Section 8 and food-stamp eligibility, in addition to both SSI and Medicaid.

Differences between SNT’s and ABLE Accounts

Just by the brief overviews above, it is no surprise that there are certainly differences between Special Needs Trusts and ABLE Accounts. Here is a breakdown:

-Control of funds

One of the largest differences between SNT’s and ABLE Accounts is simply who is in control of the funds.

In an SNT (first or third-party), funds are used for the benefit of an individual with disabilities, but the disabled individual has zero control over those funds.

For ABLE Accounts, the individual receiving benefits has direct control and access to the funds within the account.

-Amount of money contributed

Special Needs Trusts do not have a yearly contribution limit, whereas an ABLE Account has a $15,000 yearly contribution limit (based on the rules as of 2021).

-Medicaid Estate Recovery/Payback Obligation

In a Special Needs Trust situation, upon the beneficiary’s death, the trustee must freeze assets and reach out to Medicaid, to find out how much they have paid for the deceased beneficiary’s care over the course of their lifetime. Once the state has been paid back, and only after this has occurred, can the beneficiary’s heirs receive any money.

In ABLE Accounts, funds are still able to be paid out, for funeral expenses, for example, even after the beneficiary has passed away.


Anyone over the age of 65 may NOT open their own first-party Special Needs Trust. For their own money, these individuals may be limited only to a Pooled Special Needs Trust, which has its own set of pros and cons.

ABLE Accounts can be opened by anyone of any age, as long as they can prove they became disabled at age 25 or earlier.

If you have questions about ABLE Accounts in Florida, attorney Mark F. Moss can help you understand what options you have available. To arrange a confidential consultation over the phone or in person in Jacksonville, please call 904-329-7242 or inquire online today.

*Disclaimer: Reading this blog post does not create an attorney-client relationship and is not legal advice. This is for informational purposes only. It is best to speak with an attorney about your specific situation, questions, assets, concerns, and needs.