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Helping Families Maximize Financial Support for Individuals with Disabilities While Maintaining Government Benefits


Catherine E. Davey, Esq.

Family Law Committee // The Briefs // July 2020, Vol. 88 No. 6

At the child support seminar held in February of this year, it was clear that families need more information about how to help their loved ones with disabilities and how divorce and child support affect eligibility for government benefits. This article aims to describe two tools that can do just that. The first is a relatively new resource called ABLE United. The other is a Special Needs Trust, which is an estate planning tool designed for individuals with disabilities.

About ABLE Accounts and ABLE United

ABLE stands for “Achieving a Better Life Experience.” The ABLE Act, enacted in December 2014, encourages individuals with disabilities to save funds to support their health, independence, and quality of life. It amended section 529A of the Internal Revenue Service Code, and enjoys the same tax benefits that 529 college savings plans offer with some additional unique benefits specifically designed for individuals with disabilities. The Florida legislature passed the Florida ABLE Act, which was signed into law on May 21, 2015. It is managed by the Florida Prepaid College Board.

ABLE accounts are tax-free savings and investment accounts established to support disability expenses while maintaining government benefits. The three eligibility requirements for ABLE are:

ABLE accounts are tax-free savings and investment accounts established to support disability expenses while maintaining government benefits. The three eligibility requirements for ABLE are:


Benefits of ABLE United

ABLE accounts are tax-free savings and investment accounts established to support disability expenses while maintaining government benefits. The three eligibility requirements for ABLE are:


  1. The individual with a disability must be a Florida resident.1


  1. The individual must have a qualifying disability.2 A qualifying disability means an individual who is entitled to benefits based on blindness or disability under Title 2 or Title 16 of the Social Security Act. If an individual with a disability is not currently receiving one of these benefits, they must meet the ‘‘marked and severe functional limitations’’ standard of disability in the Social Security Act for children claiming benefits under the Supplemental Security Income (“SSI”) program, but without regard to the age of the individual. Additionally, this disability must be likely to last for at least 12 months or result in death. The Treasury Department and the IRS must also receive a certification under penalty of perjury that the individual (or the individual’s agent under a power of attorney or a parent or legal guardian of the individual) has a signed physician’s diagnosis, and that the signed diagnosis will be retained and provided to the ABLE program or the IRS upon request. This self-certification under penalty of perjury is adequate to satisfy the disability requirement.


  1. The individual must have become disabled before age 26.3 An eligibility wizard to assist individuals in determining their eligibility is available at


  1. The individual must have become disabled before age 26.3 An eligibility wizard to assist individuals in determining their eligibility is available at


A significant benefit of an ABLE account is that individuals can save without negatively impacting federal benefits of the person with the disability. Funds in or withdrawn from an ABLE account are disregarded when determining eligibility for Medicaid, so individuals can continue receiving Medicaid and save in the ABLE account. Like Medicaid, SSI has a resource limit of $2,000. An ABLE United account allows individuals receiving SSI to save above and beyond this limit.4  Generally, funds in (or withdrawn from) an ABLE account are disregarded when determining eligibility for SSI. Up to $100,000 saved in an ABLE account does not count as a resource. However, housing and non-qualified disability expenses withdrawn but not spent in the same month do count as a resource.5


After an account is open, an individual, their friends and family, and even an organization, can contribute to the individual’s ABLE account online via ACH or by check. Contributions of up to $15,000 from all sources each calendar year are allowable.


Funds are available at any time via ACH transfer to a checking or savings account, or a check can be requested for the individual with a disability or a third party. Additionally, when used for qualified disability expenses, the earnings portion of the withdrawal is not subject to tax. At any time, the IRS and Social Security can request copies of receipts and explanations of the necessity of qualified disability expenses.


Qualified disability expenses are those that relate to the individual’s disability and help maintain or improve health, independence, or quality of life. These expenses are not required to be medically necessary or for the sole benefit of the individual with a disability. They include expenses such as education, housing, transportation, employment training and support, assistive technology, personal support services, health, prevention, wellness, financial management, administrative services, legal fees, expenses for oversight and monitoring, funeral, and burial expenses.


ABLE United offers eight investment options, including a new FDIC-insured savings account option. Individuals can invest in one or all of these options based on their risk tolerance.


How to Enroll


Enrollment can be done online on the website and takes an average of 15 minutes. It is also possible for another individual to open an account on behalf of the person with a disability, such as a parent or legal guardian.


ABLE Accounts and Special Needs Trusts


ABLE encourages individuals with disabilities to save to support their health, independence, and quality of life. Individuals with disabilities need to consider all the options available to them, which also include Special Needs Trusts (“SNTs”).


A trust is a fiduciary arrangement that allows a trustee, as a third party, to hold assets on behalf of a beneficiary or beneficiaries. The trust specifies how and when the assets are given to the beneficiaries.


Like ABLE, the purpose of an SNT is to help individuals with disabilities by improving their quality of life while protecting their eligibility for various public assistance (needs-based) and government benefits. The trust can receive and distribute assets for the primary benefit of the disabled beneficiary. An attorney with extensive experience in the creation of SNTs is essential as numerous special rules apply, and the risk of losing government benefits is great.


Government benefit programs provide income to individuals with disabilities through SSI and Social Security Disability Insurance (“SSDI”). There are also programs that provide medical coverage such as Medicare, Medicaid, Medicaid Waiver, as well as private health insurance (i.e., ACA).


There are several types of SNTs. One of these trusts may be the right tool for some individuals with disabilities. A third-party SNT is funded with money from someone other than the beneficiary or beneficiary’s spouse (e.g., parents, grandparents). This could be done a number of ways, including through a will with testamentary SNT provisions or a revocable trust with third-party SNT provisions (that can be funded now or in the future) or even a stand-alone, third-party SNT (often funded with a life insurance policy or other lump sum). The funds in the SNT are to improve the quality of life for the person with a disability, but there are very specific rules about how the funds can be spent.6


Another type of SNT is a first-party SNT, sometimes called a self-settled SNT, in which funds belong to the individual with a disability. A first-party (d4A) SNT requires Medicaid payback, must be irrevocable, and must be the funds of the person with a disability (age 65 and younger). The d4A refers to the part of the United States Code (42 USC 1396p(d)(4)(A)) where these trusts gain their statutory authority. The money for a first-party SNT can come from an inheritance, a personal injury award, earnings, and savings. In case of a settlement or unplanned inheritance, the question of whether an individual should have an SNT or not depends on the impact of governmental and other benefits, potential penalties, and required professional fees. Clients should consider where benefits are derived and whether it makes more sense to obtain those benefits differently.


The last type of SNT is a pooled trust (d4C) SNT. These trusts are available by combining funds with other people with disabilities (pooling their assets). With this kind of trust, administrative costs are typically lower, and “minimum fees” can be avoided. Generally, a non-profit organization administers these trusts.


So, who gets the remaining money in the trust if the person with a disability passes away? The answer depends on the type of SNT. In a third-party SNT, the funds pass to heirs designated by the grantor (other children, grandchildren, charity, etc.). In a first-party SNT, after the payment of specific expenses, Medicaid is paid back for expenses paid by Medicaid during the lifetime of the disabled person. Only if funds remain after that payback, do heirs receive any funds. In a pooled trust, if assets remain in the trust after the beneficiary’s lifetime exceed the amount due to Medicaid, then Medicaid is reimbursed; however, if the amount of the funds remaining in the trust would not fully reimburse Medicaid, then the funds are held by the trust for the benefit of other disabled individuals.7


There are advantages and disadvantages to first-party and pooled SNTs. The advantages include protecting government benefits and keeping more money while providing for supplemental needs. The difficulties are that distribution of funds in a trust is restricted by rules of the trust; challenges also exist regarding selecting and working with a trustee, and as discussed earlier, the remaining trust assets are subject to Medicaid claims after the beneficiary’s lifetime.


So, can ABLE and SNTs work together? Absolutely! Funds in the SNT can be paid into the ABLE account for monthly expenses that, if paid directly by the SNT (support and health), would be treated as income to the beneficiary and reduce their benefits. If the SNT pays into ABLE and ABLE pays those expenses in the same month that the funds are received from the SNT, then there will be no effect on SSI benefits, and the full amount of the SSI check will be preserved.


Payback rules after the lifetime of the beneficiary are different as well. In a first-party SNT, paying for funeral expenses is not allowed after the lifetime of the beneficiary, yet ABLE funds are allowed for this purpose.


ABLE and SNTs are two tools that can be used separately or together as part of a financial plan for an individual with special needs or who is disabled. ABLE accounts are easy to open and maintain and are a great tool to save for the future and manage funds without losing government benefits. SNTs assist individuals who are disabled to hold assets intended to improve their lives without risk of losing government benefits. An SNT should be drafted by a qualified attorney who is experienced in establishing and successfully implementing SNTs. This attorney must understand the complexities of SNTs and help protect eligibility for government benefits while maximizing financial resources for the person with disabilities.


Catherine E. Davey, Esq., Davey Law Group, P.A., focuses her practice in the areas of probate, guardianship, guardian advocacy, estate planning, and the drafting and implementation of Special Needs Trusts for the physically and developmentally disabled. She has been a member of the OCBA since 1997.


  1. Fla. Stat. § 1009.986(4)(b), Fla. Stat. (2019).
  2. Id. at § 1009.986(1)(d) (adopting the meaning of “Eligible individual” provided in § 529A of the Internal Revenue Code).
  3. 26 U.S.C. § 529A(e)(1) (2019).
  4. About ABLE Accounts, National Resource Center, (last visited June 7, 2020).
  5. Id.
  6. Special Needs Alliance, Administering a Special Needs Trust, A Handbook for Trustees, at 10-12 (2020 Edition), (last visited June 7, 2020).
  7. See Stephen H. Hodson, When a Special Needs Trust Is Not the Only or Best Choice, Disability Resource Community,,on%20behalf%20of%20the%20individual (last visited June 7, 2020).
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