ABLE Accounts vs Special Needs Trusts: What’s the Difference?

If you or a loved one receives SSI or other disability benefits, you’ve probably heard of ABLE accounts and Special Needs Trusts (SNTs). Both are tools to save money without losing eligibility—but they work in very different ways.

Understanding the difference can help you make the right decision for your financial future—or even use both tools together.

In this post, we’ll compare:

1. What each account is

2. Who controls the money

3. How funds can be used

4. Impact on SSI and Medicaid

5. Which one is right for you

1. What Each Account Is

An ABLE account is a tax-advantaged savings account for people with disabilities. It allows you to save up to $100,000without it counting against the SSI resource limit.

A Special Needs Trust (SNT) is a legal trust designed to hold and protect assets for a person with a disability. It can be funded by parents, family members, or even settlements or backpay.

If you need something simple and flexible, the ABLE account is usually easier. If you’re dealing with a larger amount of money (like an inheritance), a trust may be required.

2. Who Controls the Money

ABLE accounts are owned by the person with a disability—but they can be managed by a parent, guardian, or representative payee if needed.

Special Needs Trusts are managed by a trustee, who decides how and when funds are spent. The beneficiary (the person with the disability) usually doesn’t have direct access.

So, if the goal is personal control and independence, ABLE is usually the better option.

3. How Funds Can Be Used

ABLE accounts can be used for a wide range of Qualified Disability Expenses (QDEs)—including food, rent, transportation, assistive technology, medical bills, education, and more.

Special Needs Trusts also allow spending on many disability-related needs. But if the trust pays for food or housing directly, that may reduce your SSI benefits unless handled carefully.

ABLE accounts tend to be more flexible for everyday living expenses, while trusts are better for bigger or longer-term needs.

4. SSI and Medicaid Impact

ABLE accounts let you save up to $100,000 without losing your SSI. Anything over that may pause SSI benefits, but Medicaid usually continues.

Special Needs Trusts don’t count toward the SSI asset limit at all—no matter how much is in them. However, they come with stricter oversight, and legal or trustee fees may apply.

One key difference: some ABLE accounts are subject to Medicaid payback after the beneficiary’s death, while certain types of trusts (especially third-party trusts) can avoid this.

5. Which One Is Right for You?

Choose an ABLE account if:

• You want simple, low-cost saving

• You need to pay for rent, food, or other everyday expenses

• You want direct control or to involve a family member in managing funds

• You’re saving under $100,000

Choose a Special Needs Trust if:

• You’re receiving an inheritance or lawsuit settlement

• You need to protect more than $100,000 in assets

• You’re working with a fiduciary, lawyer, or care team

• You want to avoid Medicaid payback after death

Many families use both together—a Special Needs Trust for long-term protection, and an ABLE account for everyday flexibility.

How Purple Can Help

Purple is building tools to help you manage ABLE savings, SSI-friendly checking, and rep payee accounts—all in one place.

Whether you’re saving backpay, budgeting monthly SSI benefits, or planning for the future, Purple helps you stay compliant and in control.

👉 Get started with Purple today

Purple is a financial technology company, not a bank. Banking services are provided by OMB Bank, Member FDIC. The Purple Mastercard® Debit Card is issued by OMB Bank, Member FDIC, pursuant to license from Mastercard.