Written by: Anne Harris
Two recent changes are important to special needs planning. The first took effect in 2026 and widens who can benefit from a powerful savings tool. The second affects how inherited retirement accounts interact with certain trusts built to protect benefits eligibility.
Key takeaways
Starting January 1, 2026, the age-of-onset requirement for opening an ABLE account rises from before age 26 to before age 46, opening this savings tool to far more people.
ABLE accounts let a beneficiary hold up to $100,000 without it counting against SSI's strict resource limit, and a special needs trust can fund one directly.
Certain special needs trusts for disabled or chronically ill beneficiaries can name a qualifying charity as a remainder beneficiary without losing favorable life-expectancy treatment on an inherited retirement account t.
Trusts drafted before these changes should be reviewed, not necessarily rewritten, to see whether they take advantage of the new options.
Coordinating a special needs trust with these tools requires more than a form. Getting distribution language wrong can jeopardize the benefits the trust was built to protect.
The ABLE account age change: a real expansion
ABLE accounts let a person with a qualifying disability save and invest funds while receiving favorable treatment under SSI and certain Medicaid eligibility rules. For SSI specifically, up to $100,000 in an ABLE account is generally disregarded when determining whether the beneficiary exceeds SSI’s resource limit. and qualified withdrawals for disability-related expenses generally aren't counted as income either.
Until now, ABLE accounts were only available to people whose disability began before age 26, which excluded a significant number of people, including many who acquired a disability later, through an illness, an injury, or military service. Starting January 1, 2026, that threshold rises to age 46, opening ABLE accounts to a much broader group of people, including many whose special needs trusts were built without ever considering this tool because it wasn't previously an option for them.
Why this matters alongside a special needs trust
A special needs trust and an ABLE account aren't competing tools. A trust can fund an ABLE account directly, giving the beneficiary more everyday flexibility and direct access to funds for disability-related expenses, without jeopardizing the protections the trust itself provides for larger, longer-term needs. If your trust was drafted before this expansion and doesn't explicitly address ABLE account funding, that's worth a look, since a trustee without clear authority to fund an ABLE account may be hesitant to do so even when it would genuinely help the beneficiary.
The retirement account and charity change
Under prior rules, naming a charity as remainder beneficiary of certain special needs trusts could interfere with favorable life-expectancy treatment for an inherited retirement account. SECURE 2.0 changed that result for certain trusts structured for disabled or chronically ill beneficiaries. If the trust meets the applicable requirements, a qualifying charitable organization may be named as remainder beneficiary without preventing the trust from receiving life-expectancy treatment based on the disabled or chronically ill beneficiary
This can matter for qualifying special needs trusts, including some trusts administered by nonprofit organizations, that name a charitable organization as an eventual remainder beneficiary. Older trust language may not reflect the updated retirement-account rules.
Should you review an existing trust?
If your special needs trust was drafted before these changes were enacted and took effect,, it's likely still valid, but "valid" and "optimized for the current rules" aren't the same thing. A review is worth doing specifically to check whether the trust explicitly allows the trustee to fund an ABLE account, whether the retirement account beneficiary language still makes sense given the correction described above, and whether any distribution restrictions in the trust are more limiting than they need to be under current rules.
Frequently asked questions
What changed with ABLE accounts in 2026? The age-of-onset requirement for eligibility rose from before age 26 to before age 46, opening ABLE accounts to a much broader group of people with disabilities.
Can a special needs trust fund an ABLE account? Yes, and this can give a beneficiary more flexible, direct access to funds for everyday disability-related expenses without affecting eligibility for SSI or Medicaid.
Does naming a charity as remainder beneficiary hurt an inherited IRA held in a special needs trust? Not necessarily. Certain trusts for disabled or chronically ill beneficiaries can name a qualifying charity as remainder beneficiary and still receive life-expectancy treatment, provided the trust satisfies the applicable retirement-account rules.
Do I need to rewrite an older special needs trust? Not necessarily. A review is usually enough to determine whether specific updates, like ABLE account authorization, would benefit the beneficiary under current rules.
If you have a special needs trust in place, or you're setting one up for a family member for the first time, call Polaris Estate Planning & Elder Law for a conversation. We'll make sure it reflects the current rules, not the ones that applied when it was last reviewed.
Ready to secure your family’s future or have a question about getting started? Call Polaris Estate Planning and Elder Law today.
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