Several estate and financial planning tools can provide valuable tax and government benefits for disabled individuals in Westchester County. Two of the most common include ABLE accounts and special needs trusts. Each tool offers different benefits depending on your situation. Understanding the differences can help you make the right choices during disability planning.
What Is an ABLE Account in Westchester County?
An ABLE (Achieving a Better Life Experience) account is a specialized financial account that allows disabled individuals whose disability began before age 26 to save money tax-free while maintaining their eligibility for means-tested government benefits. Disabled individuals can use their ABLE accounts to pay for qualified disability expenses (QDEs) not covered by government benefits, such as healthcare, housing, transportation, or education.
Note: Congress recently passed the ABLE Age Adjustment Act, which changes the age eligibility to 46 starting in 2026.
What Is a Special Needs Trust?
A special needs trust (SNT) protects a disabled individual’s assets and allows them to qualify for means-tested government benefits like Medicaid and Social Security. There are several types of special needs trusts:
- First-party trust – This type of SNT sets aside funds using the beneficiary’s own money, such as an inheritance or personal injury settlement. Congress allows a disabled person under 65 to set up a first-party trust if they have mental capacity. Other parties, such as a relative or a court, can also establish a first-party SNT.
- Third-party trust – A third-party special needs trust consists of funds coming from someone other than the beneficiary, such as a family member.
- Pooled trusts – These trusts are managed by nonprofit organizations and pool the resources of many beneficiaries into a single trust. Beneficiaries can access the account to use their funds during their lifetimes, but any remainder stays in the pool after their death.
At Amoruso & Amoruso LLP, we are fortunate to have a nationally recognized leader in SNT advocacy on our team. Firm founder Michael J. Amoruso spent over two decades pushing for the passage of the Special Needs Trust Fairness Act, which allows eligible individuals to create a first-party SNT.
ABLE Accounts vs. Special Needs Trusts in Westchester County
Here are some key differences between ABLE accounts and special needs trusts in New York:
- ABLE account – Annual contribution limit changes yearly; tax-free earnings if used on qualified expenses; easy to establish
- Special needs trusts – No annual contribution; trust income may be taxable for Qualified Disability Trust exemptions; government benefits may be reduced in some instances; require long-term management
An attorney with experience in special needs planning in Westchester County can advise on the type of special needs trust that best suits your needs.
How Do I Determine the Best Option for My Family?
Knowing the right strategies to fit your circumstances can be challenging without legal advice. An experienced special needs planning attorney from Amoruso & Amoruso LLP can discuss how a special needs trust or ABLE account (or both) can round out your plans so that you or your loved one has the resources they need for the future.
Contact an Experienced Attorney for Disability Planning in Westchester County
ABLE accounts and special needs trusts can serve as powerful financial and estate planning tools for individuals with disabilities who may need long-term care. To learn how you might take advantage of these options, contact Amoruso & Amoruso LLP today for an initial consultation with our experienced attorneys.
