People who have disabilities often find it hard to do what’s necessary to earn a living. If you’re living with or caring for a disabled person in Maryland, it’s important to know you have options regarding how they can save money. Two ways that people can provide an income for a disabled person is through either an ABLE account or a special needs trust.
If you want the easiest potential way to help a disabled person manage their assets, an ABLE account is a good option. This type of account is available to any person who experienced major disabilities before they reached 26 years old.
As is the case with a special needs trust, friends, family members and beneficiaries may all contribute to this account. While the limits are fairly high, there is a limited amount of money someone can contribute to this type of account each year. Fortunately, most states have fairly high contribution and amount limits.
Special needs trust
Another option for special needs planning involves a certain kind of trust. Like an ABLE account, a special needs trust protects a disabled person’s money while ensuring they don’t lose their benefits.
A special needs trust or supplemental needs trust is best when a disabled individual qualifies for public assistance and doesn’t want to lose that funding. It’s also important to note that this type of trust must go into effect before the disabled person reaches 65 years old.
As you can see, both special needs trusts and ABLE accounts work well to protect disabled people from not losing access to their public benefits. It can cost a decent amount of time and money to set up these accounts. But it’s worth the time and effort to know someone you care for remains financially protected.