Don’t Open a Special Needs Trust Until You Read This

If you’re trying to save money without losing your disability benefits, someone has probably mentioned a Special Needs Trust (SNT). On the surface, it sounds like the perfect solution - but there are serious tradeoffs most people don’t hear about until it’s too late.

Before you lock your money away in a trust, here’s what you need to know.

What Is a Special Needs Trust?

A Special Needs Trust is a legal structure that holds money for someone with a disability without counting against their SSI or Medicaid asset limits.

There are two main types:

• First-party trusts (funded with the beneficiary’s own money)

• Third-party trusts (funded by family or others)

In both cases, the money can only be used for the benefit of the person with the disability - and usually with strict rules.

What No One Tells You

While SNTs can protect your benefits, they come with real limitations:

• You usually can’t manage the money yourself — a trustee controls how it’s spent

• You may need court approval or legal help to create or change the trust

• If you pass away, the government may claim remaining funds to repay Medicaid

• They can be expensive to set up and maintain, especially for smaller amounts

Many families are surprised by how much oversight and red tape comes with even simple purchases — like clothes, rent, or groceries.

A Better Option for Many: The ABLE Account

If you became disabled before age 26, you may qualify for an ABLE account - a simpler, more flexible alternative to a trust.

With an ABLE account:

• You control the money yourself

• You can spend on everyday expenses - housing, food, transit, education, and more

• You can save up to $100,000 without affecting your SSI

• Funds grow tax-free and there are fewer restrictions than a trust

And with Purple, you’ll soon be able to open and manage your ABLE account directly inside the app.

How Purple Helps

Whether you’re using an ABLE account, a trust, or both, Purple was built to help you stay protected and financially independent.

With Purple, you can:

• Track your balance and stay under SSI asset limits

• Route extra money into ABLE savings automatically

• Store documents and receipts to simplify SSA reporting

• Receive Social Security disability benefits, which may arrive up to 4 days early¹

• Get other direct deposits, like paychecks, which may arrive up to 2 days early¹

Get started today at withpurple.com

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.

¹ Early access is not guaranteed, depends on payer timing, and standard processing times may apply. We generally make funds available on the day we receive the payment file, which may be up to 4 days early for government benefits like SSI or SSDI, and up to 2 days early for other deposits. Early access is available at no additional cost.