Coordinating an ABLE Account and Special Needs Trust

Overview

An effective strategy for individuals with disabilities often combines a Special Needs Trust

(SNT) and an ABLE account. The trust is used to hold larger assets and protect long-term

eligibility for benefits, while the ABLE account is used for flexible, day-to-day spending.

How the Structure Works

• Special Needs Trust (SNT): Holds larger assets such as inheritances or settlements.

• ABLE Account: Used for ongoing expenses and daily needs.

• Funds can be distributed from the trust to the ABLE account to simplify spending.

• This structure helps preserve SSI and Medicaid eligibility while allowing flexibility.

Best Practice Strategy

• Keep the majority of assets in the Special Needs Trust.

• Fund the ABLE account annually (up to allowable limits).

• Use the ABLE account for housing and daily expenses.

• Use the trust for larger or supplemental purchases.

• Coordinate distributions to avoid reducing benefits.

Why Use Both?

• The trust protects large assets and long-term planning.

• The ABLE account provides flexibility and ease of use.

• Together, they create a balanced and efficient financial structure.

What Each Can Pay For

ABLE Account – Typical Uses

• Housing and rent

• Utilities and groceries

• Transportation

• Medical and healthcare expenses

• Education and training

• Everyday living expenses

Note: ABLE accounts allow for housing expenses without significantly impacting SSI (with

proper timing).

Special Needs Trust – Typical Uses

• Medical care not covered by insurance

• Therapy and rehabilitation services

• Travel and transportation

• Education and training programs

• Personal care attendants

• Technology and equipment

• Entertainment and quality-of-life enhancements

Note: Direct payments for food and housing may reduce SSI benefits, so coordination is

important.

Key Coordination Tip

Use the Special Needs Trust for long-term planning and larger expenses, and transfer funds

to the ABLE account for routine spending. This approach maximizes flexibility while

protecting benefits.

Sources & References

 Internal Revenue Service — Achieving a Better Life Experience (ABLE) Accounts (Section 529A)

https://www.irs.gov/taxtopics/tc311

 Social Security Administration — SSI Spotlight on ABLE Accounts

https://www.ssa.gov/ssi/spotlights/spot-able.html

 Social Security Administration — Program Operations Manual System (POMS): ABLE Accounts

https://secure.ssa.gov/poms.nsf/lnx/0501130740

 ABLE National Resource Center — ABLE Accounts Overview & Best Practices

https://www.ablenrc.org

 Texas Comptroller of Public Accounts — Texas ABLE® Program

https://www.texasable.org

 Special Needs Alliance — Special Needs Trust Planning Resources

https://www.specialneedsalliance.org

 National Academy of Elder Law Attorneys — Special Needs Planning Resources

https://www.naela.org

This summary is being provided as a service to you by Patron Partners. In preparing this report, Patron Partners has

relied upon information provided by the account custodian. You should be receiving statements at least quarterly from

your custodian. If you are not receiving these statements, or you need another copy, please call us and we will provide

one to you. We encourage you to compare the information on the reports prepared by us against the information in the

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