ABLE Accounts: A Powerful Tool for Trustees and Families Navigating Special Needs Planning

Written by: Connor Kavanaugh, Special Needs Planner

Updated December 4th, 2025

One of the most stressful responsibilities for trustees of special needs trusts is figuring out how to get beneficiaries what they need without jeopardizing eligibility for critical public benefits such as Supplemental Security Income (SSI) or Medicaid. Trustees spend countless hours tracking expenditures, safeguarding disbursements, collecting receipts, and navigating a rulebook that is more than twenty thousand pages long. Some beneficiaries can meaningfully participate in these tasks, while others rely completely on outside support.

In recent years, ABLE accounts have quietly become one of the most transformative tools in easing this burden.

Why ABLE Accounts Matter

ABLE accounts are tax-advantaged savings accounts designed for people with disabilities who experienced their disability before age 26 (and now age 46 as of January 1st, 2026!). Contributions grow tax free, and when funds are used for qualified disability expenses, withdrawals are also tax free. The most important feature for trustees and families is that ABLE balances do not affect SSI eligibility as long as the account stays under $100,000.

Annual contribution limits have increased significantly since ABLE’s early days. For 2025, the total annual contribution cap is $19,000 (moving to $20,000 for 2026). Beneficiaries who are employed may also contribute above that amount through the ABLE to Work rules depending on their earnings and state of residence.

While ABLE accounts were originally envisioned as long-term savings vehicles, their real-world use has taken an interesting turn.

Not Just Savings Accounts: Everyday Money That Works Smarter

Recent research, including ongoing studies by True Link Financial and state ABLE programs, shows that beneficiaries often treat their ABLE accounts as day-to-day spending tools rather than long-term investment accounts. This trend makes perfect sense for disability planning.

When a trustee pays for a beneficiary’s food, rent, or utilities from a special needs trust, Social Security may apply an “in-kind support and maintenance” reduction, which lowers the beneficiary’s monthly SSI payment. But when a beneficiary uses their own ABLE account to pay for groceries, rent, electricity, or other housing-related expenses, that penalty disappears. For SSI purposes, funds inside an ABLE account are considered the beneficiary’s own money, not a trustee-provided benefit.

This creates a powerful planning advantage: the trustee can preserve trust assets for larger, irregular, or long-term needs while everyday expenses flow through the ABLE account without 

penalty and without requiring trustee pre-approval.

True Link’s analysis of spending patterns in Oregon’s ABLE program found that beneficiaries tend to use their accounts for practical daily purchases. Frequent spending categories included restaurant meals, groceries, gas, discount stores, phone and cable bills, and ride-share services. The average account balance hovered around only five to seven thousand dollars, far below the hundred-thousand-dollar limit, reinforcing that many families use these accounts as flexible spending and budgeting tools.

The result is meaningful independence for the beneficiary and reduced administrative pressure for trustees.

Thoughtful Planning Still Required

Although the advantages are significant, ABLE accounts are not the right solution for every situation. If a beneficiary has an ABLE account with open access but lacks the skills or support to manage money safely, the account can become a target for financial exploitation. 

This is why a coordinated plan between the trustee, the family, and the beneficiary is essential. Many families choose to allow the ABLE account to grow for long-term tax-free growth while using the special needs trust to cover ongoing expenses. Others take the opposite approach, intentionally routing housing and food costs through the ABLE account to avoid SSI reductions. The best approach depends on the beneficiary’s abilities, the size of the trust, and the family’s long-term goals.

Still Underutilized, Still Full of Potential

Even ten years after their launch, ABLE accounts remain dramatically underutilized across the country. Many eligible families have never opened one simply because they are unaware of this tool or unsure how it integrates with a special needs trust.

Oregon ABLE and Washington ABLE continue to expand their features, investment options, and user experience. Families in both states can open accounts online in minutes, link debit cards for day-to-day spending, and choose investment allocations that match their goals.

If you’d like help determining how an ABLE account fits into your planning, or whether you should prioritize trust spending or ABLE spending for your loved one, Palladio Consulting LLC is here to guide you. Our team specializes in integrating trusts, ABLE accounts, Medicaid, and SSI so families can feel confident, protected, and equipped for the long run.

You can learn more about the Oregon ABLE program here! You can learn more about the Washington ABLE program here!