By Margaret Henn
Planning for the future of a loved one with a disability can feel overwhelming – especially when it comes to finances. But the good news is, Maryland families have two powerful tools that can offer peace of mind and long-term security –Special Needs Trusts (SNTs) and Achieving a Better Life Experience (ABLE) Accounts.
These options are designed to help you set aside money for a loved one with a disability without putting their public benefits— like Supplemental Security Income (SSI) or Medicaid — at risk. Simply giving someone money or leaving them an inheritance can unintentionally disqualify them from programs that cover critical needs like housing, health care and daily support. That’s where these financial tools step in.
What is a Special Needs Trust?
A Special Needs Trust is a legal arrangement that allows someone (called a trustee) to manage money or property on behalf of a person with a disability (the beneficiary). When set up correctly, the money in the trust doesn’t count against public benefits limits. So, your loved one can still qualify for the help they need while using the trust to cover extras that improve their quality of life.
Types of Special Needs Trusts:
- Third-Party SNTs: Set up and funded by someone other than the person with the disability.
- First-Party SNTs: Funded using the beneficiary’s own money (like a legal settlement or inheritance).
- Pooled Trusts: Managed by nonprofits, combining resources from multiple beneficiaries’ assets for greater efficiency.
What is an ABLE Account?
An ABLE Account is another helpful tool. Think of this tax-advantaged savings account like a 529 college savings plan, but for people with disabilities. It’s a tax-free way to save money for disability-related expenses, and the money doesn’t count toward SSI or Medicaid limits, provided the funds are used for Qualified Disability Expenses.
Key Features of ABLE Accounts in Maryland
- Who’s Eligible: Anyone who became disabled before age 26 (will increase to age 46 starting January 1, 2026).
- Control: Managed by the person with a disability or a legal representative.
- Annual Contribution Limits: $19,000 for 2025; up to $500,000 total in Maryland, with the first $100,000 exempt from SSI limits.
Which One is Right for Your Family?
It’s not always an either-or decision. In many cases, using both a Special Needs Trust and an ABLE account can offer the best combination of flexibility and security.
- Use an SNT for managing large sums – like gifts, inheritances or settlements – especially if a trustee must manage the funds.
- Use an ABLE account for everyday spending, especially if your loved one wants more direct control over their money.
Either way, getting legal advice is key – especially when setting up a trust. Drafting a trust incorrectly could have negative consequences for the individual with a disability and could impact your loved one’s eligibility for benefits. If you’re interested in pooled trusts, one great resource is First Maryland Disability Trust. For more information on ABLE accounts, check out Maryland ABLE at marylandable.org.
Planning ahead for a loved one with a disability can be complex, but also empowering. With tools like Special Needs Trusts and ABLE Accounts, Maryland families can protect their loved one’s access to essential benefits – and still ensure they live a rich and fulfilling life.
Margaret Henn is the Deputy Director of Maryland Volunteer Lawyers Service.