Can You Have Both an ABLE Account and a Special Needs Trust?
- Purple
- Aug 25
- 2 min read
If you’re managing money for someone with a disability—or for yourself—you’ve probably come across both ABLE accounts and Special Needs Trusts (SNTs).
But here’s a question we hear all the time:
Can you have both at the same time?
Yes—you can. And in many cases, using both together can be the smartest move.
In this post, we’ll walk through:
How ABLE accounts and SNTs work together
When it makes sense to have both
How to use each for maximum flexibility
What to watch out for
How Purple can support you
1. How They Work Together
An ABLE account is a simple, tax-advantaged savings account for people with disabilities. It’s great for everyday expenses like rent, food, transportation, or assistive devices—and balances up to $100,000 don’t affect your SSI.
A Special Needs Trust is a legal tool that can hold larger sums—like an inheritance or a lawsuit settlement—without impacting SSI or Medicaid eligibility.
When used together:
The trust can transfer funds into the ABLE account, letting you use that money for daily needs
You get the flexibility of an ABLE account with the long-term protection of a trust
2. When It Makes Sense to Have Both
You might benefit from having both if:
You received a large amount of money (like a settlement or backpay)
A family member wants to leave you an inheritance
You want more control over some funds while still keeping others protected
You’re worried about Medicaid payback rules and want to minimize exposure
Example: You keep $3,000 in your ABLE account for rent and groceries, while your Special Needs Trust holds $50,000 for long-term care needs. Together, you’re covered.
3. How to Use Each One
Think of the ABLE account as your day-to-day wallet and the SNT as your safe for future needs.
Use the ABLE account for things like:
Housing
Food
Transit
Personal tech
Health-related costs
Use the Special Needs Trust for:
Legal fees
Large medical equipment
Educational programs
Future home or care planning
Distributions to the ABLE account
Some families even set up automatic transfers from the trust to the ABLE account each month to streamline spending and stay compliant.
4. What to Watch Out For
Medicaid payback: ABLE accounts may be subject to Medicaid payback after the beneficiary’s death. Trusts (especially third-party SNTs) can sometimes avoid this.
Recordkeeping: If you’re a rep payee or caregiver, you’ll need to keep clear records of what came from where—especially for SSA reviews.
Qualified expenses: ABLE withdrawals must be used for Qualified Disability Expenses (QDEs). Trusts have broader potential uses but are more regulated.
Having both tools gives you more flexibility, but it’s important to stay organized.
5. How Purple Can Help
Purple is building disability-first banking tools that support:
SSA-compliant checking
Rep payee accounts
Backpay-dedicated accounts
Upcoming ABLE savings integration
Document storage for SSA notices and trust records
We’re here to help you spend smarter, stay compliant, and keep your benefits safe.