There are some BIG differences between an SNT and an ABLE account. While not an exhaustive list, here are a few of the differences:
- If an SNT pays for shelter costs, government benefits will be reduced.
- The ABLE Account grows tax-deferred, and money can be used tax-free so long it is used for “qualified disability expenses;” whereas Trust assets are taxable and have no restrictions on use.
- ABLE Accounts can only hold cash and investment securities—not real property (house, car, etc.). This Account is considered your child’s money and is specifically sheltered from the asset/income tests for Medicaid and SSI eligibility rules.
- Only individuals whose disability onset age occurs before the age of 26 are eligible to set up an ABLE Account (although this age limit is set to increase to 46 years old in 2026).
- The annual contribution limit to an ABLE Account is $19,000 per year. There is no contribution limit to an SNT.
- If the ABLE Account has more than $100,000, SSI funding ceases until the balance is spent down below this threshold.
- An ABLE Account can have a maximum of $500,000; there is no maximum amount allowed in an SNT.
- Should the ABLE Account holder (your child) pass away with funds still in the ABLE account, the primary beneficiary is Medicaid; meaning that, if your child receives any Medicaid dollars during his/her life, Medicaid has the right to “claw back” money from the ABLE Account to be reimbursed before other beneficiaries receive the balance. (Illinois allows another qualified beneficiary to inherit ahead of Medicaid to continue the ABLE spend down.)
