In May 2025, several important updates reshaped how families and trustees can manage Special Needs Trusts (SNTs). These changes not only improve flexibility for beneficiaries but also open new opportunities for strategic estate and retirement planning. For those working with a special needs planning lawyer, staying informed about these developments is important to confirm that existing plans reflect the latest legal benefits and protections.
SSI Food Update Offers Greater Flexibility
One of the most notable changes is the confirmation of the Supplemental Security Income (SSI) food rule adjustment. Trustees can now use SNT funds to pay for food without it counting as “in-kind support and maintenance” (ISM), which previously reduced monthly SSI benefits. This change allows trustees to fund groceries, dining out, and other food-related expenses without jeopardizing eligibility, providing a higher quality of life for beneficiaries.
SECURE Act 2.0 Expands Planning Opportunities
The SECURE Act 2.0 introduced significant enhancements for retirement assets left to SNTs. Under the right trust drafting, disabled beneficiaries can still receive “stretch” distributions from inherited IRAs, extending tax-deferred growth over their lifetimes. This provision also allows SNTs to name charitable organizations as remainder beneficiaries without losing the stretch benefit—a unique opportunity for families wishing to combine personal and philanthropic goals. This alignment of retirement and trust planning makes it possible to maximize both asset preservation and charitable impact.
ABLE Account Eligibility Expands In 2026
Starting in 2026, ABLE account eligibility will extend from individuals whose disability onset occurred before age 26 to those whose onset occurred before age 46. This expanded eligibility opens ABLE accounts to a broader group of individuals, offering a valuable savings tool that works alongside SNTs. Funds in ABLE accounts grow tax-free and can be used for qualified disability expenses without affecting SSI or Medicaid eligibility, making them an excellent companion to trust-based planning.
Integrating SNTs, ABLE Accounts, And Charitable Planning
Families can now develop more layered planning strategies. For example, an SNT can manage large sums and provide structured distributions, while an ABLE account covers flexible day-to-day expenses. Retirement assets left to an SNT can still benefit from long-term tax deferral, and charitable remainder designations can fulfill legacy or community goals. This multi-tiered approach offers both security and adaptability, making sure that beneficiaries receive the maximum benefit from available resources.
Updating Existing Plans To Capture New Benefits
These updates make it imperative to review and, if necessary, revise trust documents and beneficiary designations. Outdated language or improper drafting could prevent an SNT from qualifying for stretch distributions or incorporating charitable remainders. A comprehensive review with an experienced attorney verifies that your planning documents reflect current laws and optimize benefits for the beneficiary.
Staying current with these changes can make a substantial difference in preserving assets and enhancing quality of life. If you want to explore how these rules can improve your planning, consider connecting with our professional resources for up-to-date guidance. You can also list your site with Estate Planning Pros to share your expertise and reach families looking for trusted legal insights.