How is this different from a Special Needs Trust or Pooled Trust?
A STABLE account does not replace a Special Needs Trust or Pooled Trust. There are some key differences that are meant to give people living with disabilities and their families more options.
With a STABLE account:
There are fewer expenses than setting up a trust.
The beneficiary owns the funds and can access them.
Earnings are tax-free.
There’s a yearly limit of $18,000 and a lifetime maximum of $541,000.
Amounts in a STABLE account are subject to a Medicaid recovery upon the death of the individual with disabilities.
Funds can be used for food without affecting benefits, and for housing without affecting benefits if spent in the same month as withdrawn from the account.
With a Special Needs Trust or Pooled Trust:
You have to set up a trust.
The beneficiary has to get approval of the trustee to receive disbursement.
The earnings are taxed at trust rates.
There are no limits on contributions or balances.
Amounts in a Third-Party Special Needs Trust are generally not subject to a Medicaid recovery upon the death of the individual with disabilities.
Funds can be used for housing, but benefits may be affected.