Introduction
When a personal injury client is disabled and relies on needs-based government benefits such as Medicaid or Supplemental Security Income (SSI), receiving a settlement can create serious complications. A sudden increase in assets—even if it comes from a well-deserved settlement—can unintentionally jeopardize eligibility for these essential programs. For this reason, settlement planners and attorneys frequently turn to specialized planning tools designed to preserve access to benefits while still allowing clients to receive and use their settlement funds.
Two of the most commonly used tools in this area are ABLE Accounts and special needs trusts. While both options serve the broader purpose of protecting eligibility for Medicaid and SSI, they operate very differently, have distinct eligibility rules, and offer unique advantages. Understanding how each works—and when it makes sense to use one or both—can significantly improve outcomes for disabled clients who depend on public benefits.
What Are ABLE Accounts?
ABLE Accounts were made possible by the Achieving a Better Life Experience Act of 2014. This relatively new option is another option for clients who receive Medicaid or Supplemental Security Income (SSI) and wish to maintain eligibility for those benefits after receiving a settlement.
ABLE Accounts are an option for clients who were disabled before the age of 26 (as of January 1, 2026, the eligibility increased to those who were disabled before the age of 46). This age restriction is one of the main restrictions on ABLE Accounts — and it’s a restriction that reduces their use in some personal injury settlements. The increase to age 46, effective January 1, 2026, makes ABLE Accounts available to many more clients.
Up to $19,000 per year (as of 2025) can be placed into an ABLE Accounts. An ABLE Account acts in a similar way as a special needs trust, but without some of the administrative burden and complexities of a special needs trust.
ABLE Accounts are more flexible than special needs trusts. Funds within an ABLE Account can be used on shelter expenses, which is a distinct advantage unique to ABLE Accounts. (Funds within a special needs trust generally cannot be used on shelter expenses).
What is a Special Needs Trust?
A special needs trust is an irrevocable trust specifically created for clients who are receiving Medicaid and SSI. A special needs trust ensures that a client will continue to receive those benefits after receiving a settlement.
The funds placed in a special needs trust are not counted by Medicaid and SSI and will not affect their eligibility. Note that it's essential to understand what can a special needs trust NOT pay for—these funds can be used for almost any expense except for items that are already being paid for by Medicaid and SSI.
To understand how this differs from an ABLE account, check out our comparison guide on special needs trust vs ABLE account.
Strategies with ABLE Accounts and Special Needs Trusts
If a client is eligible for an ABLE Account and is receiving a larger settlement, using both an ABLE Account and a special needs trust is often a great approach.
Once both the ABLE Account and special needs trust are established, we find that funding the ABLE Account from the special needs trust with $19,000 each year (as of 2025) allows the client to have additional flexibility (i.e., the client can pay for food and shelter expenses) while still maintaining eligibility for Medicaid and SSI and having the protection and advantages of a special needs trust (e.g., the benefit of a trustee, dissipation protection, investment management).
Final Thoughts
If you have a client who is disabled and receives Medicaid or SSI, we’d be happy to explore whether an ABLE Account, a special needs trust, or a combination of both make the most sense for your client.
Learn more about our Trusts and Asset Management services, or take the first step by scheduling a free 15-minute call with us today.
