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Planning for your future or the future of a loved one can be overwhelming. When you include the need to consider means-tested government benefits in that planning such as Supplemental Security Income (SSI) or Medicaid, it can seem even more daunting.

Means tested government benefits are programs that assist individuals based on a person’s income and resources. If a person’s income, household income, or certain assets such as cash or items that can be sold for cash (resources) exceeds a threshold, they may no longer qualify for the benefits.

Luckily, there are a few tools available to disabled individuals and their families to help them protect benefit eligibility and plan for their financial future.

ABLE Accounts

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Established by the Achieving a Better Life Experience (ABLE) Act of 2014, ABLE accounts, if used correctly, are a tool that offers disabled individuals a tax-free savings option that does not affect means-tested government benefits.

ABLE accounts can be created and managed by the beneficiary. Also, if the beneficiary needs assistance the account can be opened and/or managed by the disabled individual’s parents, court-appointed conservator/guardian or a designated agent under a power of attorney.

To qualify for an ABLE account, a person must have a disability that causes limitations in daily activities, as defined by Social Security, and the disability must have started before the age of 26. The ABLE account gives individuals with disabilities some financial freedom without losing access to government benefits like SSI (Supplemental Security Income) or Medicaid (our MaineCare programs in Maine). As a side note, the ABLE Age Adjustment Act will increase the age of onset from 26 to 46 as of January 1, 2026.

ABLE accounts have a few contribution limits. Individuals can only have one ABLE account and there are limits on annual contributions and lifetime contributions including a maximum balance before an ABLE account will negatively affect the individual’s SSI and Medicaid eligibility.

  • Annual Contribution: The annual contribution for an ABLE account is determined by the federal annual gift tax exclusion. In 2025 this amount is $19,000.
  • Lifetime Contribution: The federal government lifetime contribution maximum is currently $100,000. However, this limit is only for federal benefits such as SSI. The State of Maine limit follows the 529 College Savings Plan contribution limits. In Maine this amount is $520,000 and affects state benefits such as Medicare.
  • Maximum Account Balance for Benefit Protection: ABLE accounts will not count against the resource limit (items such as cash or items that can be sold as cash) of $2,000 for individuals and $3,000 for couples, if the account balance is less than $100,000. If the account balance goes over $100,000 at any time, SSI payments could be suspended.  Medicaid eligibility is not affected by this threshold.

Special Needs Trusts

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Special Needs Trusts or SNTs, are another great protection tool for disabled individuals. In some ways, SNTs have fewer restrictions than ABLE accounts, making SNTs an important tool for you to discuss with a special needs estate planning attorney.

Special Needs Trusts have no requirements for the onset of disability and an individual may have more than one SNT on which they are named beneficiary.  There are also no limits to contributions or the total value of the trust.

First Party SNTs may be established by the beneficiary, their parents, grandparents, or conservator/guardian, or the court. These are funded with the beneficiary’s own assets, and they must be established and funded before the individual reaches the age of 65. 

Third Party SNTs may be established and funded with the assets by anyone other than the beneficiary. These trusts are not subject to any age restrictions, and they can be established after the individual turns 65.

Special Needs Trusts are managed by a designated trustee, usually a family member, trusted friend or a professional fiduciary. Trustees have a fiduciary responsibility to act in the beneficiary’s best interest and have sole discretion over investment decisions. The assets held in trust do not belong to the beneficiary and are held for their benefit and distributed at the discretion of the trustee. A trustee of a SNT requires understanding of and knowledge in public benefit qualifications to ensure that distributions are carefully managed, thereby preventing any impact on the beneficiary’s eligibility for their benefits.

At the trustee’s discretion, SNTs can be used for any expenses that benefit the beneficiary alone. However, spending money from a special needs trust on certain expenses such as housing, may reduce SSI benefits paid to the beneficiary. Funds should not be distributed directly to the beneficiary so as to avoid any impact on their means tested benefits. Best practice is to pay directly to the vendor for items and services on behalf of the beneficiary. There are many tools a trustee can use to accomplish this goal including an ABLE account to pay for qualified disability expenses (QDEs) which include basic living expenses.

Both Special Needs Trusts and ABLE accounts can play a crucial role in securing financial stability for individuals with disabilities. Understanding your options is the first step toward making informed decisions. If you are ready to explore the best approach for you or your loved one, Maine Fiduciary Services is here to help and can connect you with a skilled special needs estate planning attorney.