As a parent, you are likely concerned about the financial future of your child with a disability. It is important to plan ahead because programs like Social Security (SSI) and Medical Assistance (MA) have limits on how much money a person can have. Here are some savings options that won’t impact your child’s ability to receive these important disability benefits.

ABLE accounts

ABLE accounts are similar to 529A education savings accounts. The funds can be used for any expense that improves the quality of life for the individual.  Anyone can contribute to them, and individuals can save up to $100,000. The current annual contribution limit is $19,000. People with disabilities who work can add additional funds. 

Special needs trusts

A special needs trust is used to protect the personal funds of an individual with a disability. It must be set up by an attorney. It could include money that had been saved over time or a large one-time “windfall” such as an inheritance or settlement. Only the individual can contribute to the trust. A trustee manages the funds. The trust can pay for items not covered by Social Security or Medical Assistance like transportation, recreation, entertainment, vacations, training, clothing, and household items.

Supplemental needs trusts

A supplemental needs trust also must be set up by an attorney. It allows friends and family to contribute funds to the individual with a disability and is often used as part of a parent’s or grandparent’s estate plan. A trustee manages the funds which can be used to pay for goods and services that improve the individual’s quality of life. There is no limit on the amount that can be contributed. If funds are left when an individual dies, they go to the beneficiary listed when the trust was created.