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Compare ABLE Accounts with Special Needs Trusts
The Achieving a Better Life Experience Act (the ABLE Act) became effective in New York State on April 1,2016. The purpose of the ABLE program is to assist individuals with disabilities with saving funds in accounts to better enhance their independence and quality of life. The program is intended to supplement, not supplant, government entitlements, such as Medicaid and SSI. Distributions from the account can be used to pay for qualified disability expenses, including education, housing, transportation, and health.
To learn more about ABLE accounts in New York State, go to https:www.mynyable.org/home.html.
The chart below provides a comparison between ABLE accounts and Special Needs Trusts.
Learn more about special needs trusts.
26 USC §529A (tax code)
42 USC §1396p(d)(4)
Yes. State entitled to receive all ABLE balance at death of beneficiary up to amount of Medicaid provided
Yes. State named as remainder beneficiary to extent of Medicaid
Any person (but beneficiary owns account)
Person with disability, parent,
Anyone other than person with disability
Sometimes income taxable to person contributing money to the trust;
Only distributions for food and shelter raise issues re: eligibility;
State program provider; account holder may choose state
Someone other than beneficiary; court often supervises
Yes for SSI if balance exceeds $100,000
Gift tax exemption amount
1 per beneficiary
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