Individuals with disabilities who receive means-tested government benefits are disqualified from such benefits if they exceed asset or income limits. Living within these meager limits can be quite burdensome, especially for those without family support. Estate planners often draft special needs trusts (SNTs) to supplement, but not supplant, public benefits without affecting eligibility. While SNTs can be excellent planning tools, they are not the only option. Most states offer ABLE accounts—savings accounts that provide tax-free growth for individuals with disabilities without affecting eligibility for Medicaid, Supplemental Security Income (SSI) or other means-tested benefits.

Section 529A of the Internal Revenue Code allows states to create programs under the Achieving a Better Life Experience (ABLE) Act, enacted in 2014. The proximity to Section 529 was intentional: ABLE accounts are akin to the more commonly known 529 accounts and serve a similar purpose. Both 529 and ABLE accounts grow tax-free if the funds are used for qualified educational expenses or qualified disability expenses, respectively. Distributions from an ABLE account for coverage of qualified disability expenses are not included in the gross income of the account beneficiary and are not considered countable assets for public benefits eligibility.