ABLE TN : What is it and how does it work in conjunction with Special Needs Trusts?

The State of Tennessee recently implemented the ABLE TN program. ABLE accounts (Achieving a Better Life Experience) allow individuals with disabilities to plan and save for future expenses, while benefiting from tax-free earnings on the investments.  The private funds saved through ABLE TN will supplement benefits provided through private insurance, Medicaid benefits, Supplemental Social Security Income, as well as other sources.

Accounts are easy to set up and manage and no legal representation is required. An account may be created by the beneficiary, parents/guardians, or a third party.

Beneficiaries are limited to one ABLE account at a time. An individual who has been diagnosed with a disability on or before age 26 may qualify by meeting one of the following:

  • the individual is eligible to receive Supplemental Security Income (SSI)
  • the individual is eligible to receive Social Security Disability Insurance (SSDI)
  • the individual has been diagnosed by a qualified physician with a physical or mental disability resulting in marked and severe functional limitations that is expected to last no less than 12 months
Income Tax Benefits

The investment appreciation and income earned in the account will be federal and state income tax free – as long as the funds are used for qualified expenses.

Qualified Expenses

ABLE accounts may be used for a variety of qualified disability related expenses. Since the needs of each individual may vary depending upon their unique disability and/or circumstances, the expenses include, but are not limited to:

  • Housing

  • Transportation

  • Education

  • Health, Prevention, and Wellness

  • Training and Support

  • Assistive Technology

  • Employment Support

  • Financial Management

  • Legal Fees

  • Personal Support Services

  • Administrative Services

Impact on Federal Benefits

There is no impact on federal means-tested benefits if your ABLE TN account is less than $100,000.

Minimum/Maximum Contributions

An account can be opened with as little as $25, with a maximum annual contribution of $15,000 per beneficiary. The maximum lifetime contribution limit is $350,000.  (For example, if you fund the maximum annual amount of $15,000, you will reach the $350,000 lifetime maximum after a little over 23 years.)  However, note that funds in excess of $100,000 will be treated as a resource with regard to the federal means test.

Investment Options & Special Needs Trusts

ABLE TN offers 14 diverse investment options for participants to choose from. The plan allows changes to your investment selections twice per calendar year.

An individual may have a Special Needs Trust (SNT), an ABLE TN account, or both. Since there is no state residency requirement and because an ABLE TN account can be used in tandem with a SNT it should prove to be a useful tool.

For more information, or to open an account, visit



Contact Us
Corporate Headquarters:
Cumberland Trust
40 Burton Hills Blvd, Suite 300
Nashville, TN 37215
For help with accessibility, please contact

Advisor Login Panel