<![CDATA[Special Needs Planning - Chaney Counsel]]> https://www.chaneycounsel.com/blog/categories/special-needs-planning/ Wed, 26 Nov 2025 21:06:13 GMT en-us <![CDATA[Special Needs Trust vs. ABLE Account: Which One Does Your Family Need?]]> https://www.chaneycounsel.com/blog/special-needs-trust-vs-able-account-which-one-does-your-family-need/ https://www.chaneycounsel.com/blog/special-needs-trust-vs-able-account-which-one-does-your-family-need/ Wed, 26 Nov 2025 15:52:51 GMT Parents of children with disabilities often receive conflicting advice about Special Needs Trusts (SNTs) and ABLE Accounts. Both tools protect eligibility for needs-based benefits such as SSI, Medi-Cal, and IHSS, but they serve different purposes. Many families benefit from using both. What Is a Special Needs Trust? A Special Needs Trust allows a person with…

]]> Parents of children with disabilities often receive conflicting advice about Special Needs Trusts (SNTs) and ABLE Accounts. Both tools protect eligibility for needs-based benefits such as SSI, Medi-Cal, and IHSS, but they serve different purposes. Many families benefit from using both.

What Is a Special Needs Trust?

A Special Needs Trust allows a person with disabilities to receive financial support without disqualifying them from needs-based benefits.

Third-Party Special Needs Trust

  • Funded with someone else’s money (parent, grandparent, etc.)
  • Does not require court approval
  • Does not require Medi-Cal payback
  • Commonly used in family estate plans

First-Party (Self-Settled) Special Needs Trust

  • Funded with the beneficiary’s own money (settlement, inheritance, back-pay)
  • Requires court approval under California Probate Code
  • Must include Medi-Cal reimbursement provisions
  • Trustee must notify DHCS at establishment and termination

What an SNT Can Pay For

Under SSI rules, SNTs may pay for:

  • Transportation
  • Education
  • Caregiving
  • Medical or therapy services
  • Recreation
  • Personal items

SNTs must be structured carefully to avoid affecting eligibility for benefits.

What Is an ABLE Account?

An ABLE Account (CalABLE in California) is a tax-advantaged savings account.

Eligibility

  • Disability began before age 26
  • Federal law increases this age to 46 on January 1, 2026
  • Must meet SSI/SSDI disability criteria or have a qualified diagnosis

Key Features

  • Annual contribution limit: $18,000 (2025)
  • Funds grow tax-free
  • Does not affect Medi-Cal eligibility
  • SSI unaffected up to $100,000

Qualified Disability Expenses Include

  • Housing
  • Utilities
  • Food and basic living expenses
  • Transportation
  • Assistive technology
  • Employment-related support

Which One Should You Use?

Use a Special Needs Trust for long-term planning, inheritances, and structured lifetime financial protection.

Use an ABLE Account for day-to-day spending, housing costs, and financial independence.

Most families benefit from having both tools working together.

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