Financial Tools
Learn about ABLE Accounts, Special Needs Trusts, Pooled Trusts, and other financial planning tools.
This section will cover the following:
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Every section includes:
✓ Overview ✓ Eligibility ✓ How to Apply ✓ Helpful Resources
Planning for the future often means balancing financial security with eligibility for important public benefits. Fortunately, several financial tools allow individuals with disabilities and their families to save money, receive gifts or inheritances, and pay for disability-related expenses without unnecessarily affecting programs like SSI or Medicaid. This section explains Kansas ABLE Accounts, Special Needs Trusts, and Pooled Trusts, helping families understand how each tool works, who qualifies, and when each may be appropriate.
ABLE Accounts
About
The Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014 (P.L. 113-295), passed by the 113th Congress, created ABLE saving accounts in Kansas. ABLE Accounts offer individuals with disabilities tax-free savings accounts available to cover qualified disability expenses without affecting their eligibility for SSI and Medicaid.
Qualified disability expenses (QDE) are items that help a person with a disability stay healthy, live independently, or improve their quality of life. This may include, but is not limited to:
Education
Housing
Transportation
Employment training and support
Assistive technology and related services
Health
Prevention and wellness
Financial management and administrative services
Legal fees
Expenses for ABLE account oversight and monitoring
Funeral and burial
Basic living expenses
ABLE Accounts are federally overseen by the Internal Revenue Service (IRS) and the U.S. Department of the Treasury for tax rules and compliance. At the state level in Kansas, ABLE accounts are administered by the Kansas State Treasurer's Office in compliance with federal law.
Eligibility
In order to be eligible for an ABLE Account, qualifying individuals must one of the following:
Have a disability that is terminal or long-term (more than 12 months) and must cause "marked and severe functional limitations";
Be eligible for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) because of a disability before the age of 26; or
A doctor has diagnosed the individual with a disability (physical or mental) before the age of 46
How To
To open an ABLE account, individuals must fill out an online application through KS ABLE. Required documents to open the Account usually include:
Personal info: Name, address, birthdate, SSN/TIN/EIN, ID, and email
Investment options: Review and understand the Plan's Investment Options.
Bank Information: Bank and routing numbers for funding the ABLE Account.
Documentation (if required): Documents proving the relationship to the account owner and their authority to open and manage the Account.
The Plan Disclosure Booklet: The objectives, risks, fees, and restrictions associated with opening an Account and investing in the Kansas ABLE Savings Plan.
Resources
Special Needs Trusts Options for Kansans with IDD
About
The Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66) and The Special Needs Trust Fairness Act of 2016 (P.L. 114-255), passed by the 103rd and 114th Congress, created Special Needs Trusts in Kansas. A special needs trust is a legal way to hold money or property for an individual with a disability. The money in the Trust does not count against limits for programs like Medicaid or SSI, so the person can continue receiving public benefits while also using the Trust for extra support.
Special needs trusts are used to pay for costs that public benefits do not cover, helping improve the person's quality of life. This may include, but is not limited to:
Education-related services
Assistive technology and medical equipment
Dental, vision, or medical expenses not covered by Medicare or Medicaid.
Transportation and travel
Personal care attendants
Hobbies, recreational activities, and entertainment
Home modifications for accessibility that is not already covered by a waiver
Eligibility
Be under the age of 65 at the time the Trust is created (if a first-party SNT)
Meet the Social Security Administration's definition of disability.
Eligibility for Special Needs Trusts (SNT) is dependent on the type of Trust:
First-party SNT: Funded with the person's own money, often from a legal settlement or inheritance.
The individual must be under the age of 65 at the time the Trust is created and must also meet the Social Security Administration's definition of disability.
Third-party (or supplemental) SNT: Funded by someone other than the person with a disability, usually parents or family members, and is often used for estate planning.
The Trust is funded by someone other than the beneficiary, and the Trust's assets are used to supplement, not replace government benefits.
Pooled SNT: A pooled special needs trust is run by an outside organization, usually a 501(c)(3) nonprofit, and combines money from many people while keeping each person's account separate.
The Trust requires the beneficiary to be disabled under Social Security rules, with no age limit, and a nonprofit manages the Trust.
All trusts are federally overseen by the Social Security Administration and Medicaid programs, and are subject to tax regulation by the IRS.
How To
To apply for a Special Needs Trust, it is recommended that individuals find a knowledgeable attorney. Experts in elder law, estate planning, and SNTs can help write and update the Trust to protect benefits and ensure funds are used as intended.
A trustee will also need to be named in the document. This is someone who manages the Trust and decides how funds are spent. This could be a family member, a professional, or a pooled special needs trust. This can also consist of a Trust Advisory Committee to ensure accountability on the chosen Trustee.
Selecting the right attorney, trustee and any other accountable parties helps ensure the Trust is set up correctly and truly supports the beneficiary’s needs while protecting their eligibility for public benefits.
Pooled Trust
About
A pooled trust is a special type of trust established and run by a nonprofit organization that combines funds from many beneficiaries for investment and administrative purposes while keeping separate sub-accounts for each person.
Pooled trusts are recognized under federal law and Kansas statute as a special-needs trust that is generally not counted as a resource for Medicaid or SSI eligibility when properly structured and used, meaning assets in the trust typically won’t disqualify a person from public benefits.
Eligibility
The beneficiary must have a disability as defined under federal law (often the Social Security Administration’s definition) — typically onset before age 65 at the time the trust is funded.
Trust must be established by an appropriate party (individual, guardian, or court) to benefit the person with a disability.
Pooled trust membership may be limited by the nonprofit’s rules (some serve people in specific regions).
How To
Contact a nonprofit pooled trust provider serving Kansas.
Complete a Joinder Agreement or application for a sub-account, providing information about the beneficiary and the funds to be placed into the trust.
Transfer funds into the pooled trust sub-account; these assets then become part of the pooled trust for investment/management and are generally excluded for Medicaid/SSI resource counting.
Work with the trust manager to request distributions for approved supplemental needs (tuition, therapies, equipment, transportation, etc.) that don’t affect benefit eligibility.