ABLE, Special Needs Trust, and 529. These are three separate tools, not one choice. Start with the 90-second side-by-side, then take each deep-dive lesson below.
ABLE is designed to be simple. You open it yourself online. You use it like a checking or investment account.
You control it. You decide what to spend it on. You pick the investments.
Trade-off. You can only put in $20,000 per year. Total lifetime cap is set by your state, usually $300,000 to $600,000.
Best for. Everyday saving and spending. Emergency fund. Short-term goals. Anyone who wants direct control of their money.
A Special Needs Trust (SNT) is a legal container. Money in an SNT does not count against SSI or Medicaid, at any amount.
The trustee. Someone else controls the money and decides what to spend on. That could be a parent, sibling, spouse, or professional trustee.
Trade-offs. You need a lawyer to set one up ($1,500 to $5,000 typical). You give up direct control. Some SNTs have Medicaid payback at death.
Best for. Larger inheritances. Money from a lawsuit settlement. Situations where the person cannot manage money themselves. Long-term protection.
529 college savings plans were the model for ABLE. They work similarly — tax-free growth, contributions from anyone, state programs run each one.
The difference. A 529 must be spent on college. An ABLE can be spent on any Qualified Disability Expense (housing, transportation, health, employment support, and more).
The rollover option. Federal law allows you to move money from a 529 into an ABLE for the same person. Tax-free. The move counts against your $20,000 ABLE annual limit.
Best for. Families who saved for college but the child's path changed. Also families who saved for one child, and it should now go to a sibling with a disability.
Take what you learned into the next step. Or ask ReachABLE anything else.