Insights, Special Needs Financial Planning
Trump Accounts and Special Needs Planning: One Important Detail Families Should Know
by Sequoia Financial Group
by Sequoia Financial Group
As families begin exploring the new Trump Account savings opportunity created under the One Big Beautiful Bill Act (OBBBA), an important planning consideration has emerged for families supporting a loved one with special needs.
While Trump Accounts may offer a new way to save for a child’s future, they can also create unintended consequences if they are not coordinated with a broader special needs planning strategy.
Understanding the Potential SSI Impact
Trump Accounts are tax-advantaged accounts established for children under age 18 and are designed to function similarly to retirement accounts during a child’s early years.1
Under current guidance, funds generally cannot be withdrawn during the account’s growth period. Beginning on January 1 of the calendar year in which the beneficiary turns 18, however, the account largely transitions to treatment similar to a traditional IRA.2
For individuals who may rely on means-tested benefits such as Supplemental Security Income (SSI), this transition can become significant. When the child turns 18 assets in a Trump account become a countable resource for SSI eligibility purposes
SSI eligibility is subject to strict resource limitations. When an individual gains ownership or control of assets that exceed allowable resource thresholds, benefits may be reduced or lost.3 Because Trump Account assets generally become accessible when the beneficiary reaches adulthood, families should evaluate how those assets may affect future benefits eligibility.
A Planning Opportunity: Qualified ABLE Rollovers
One provision receiving increased attention within the special needs planning community is the ability to complete a qualified rollover from a Trump Account into an ABLE account during the account’s growth period.4
For families whose child qualifies for an ABLE account, this may create a valuable planning opportunity during the calendar year the beneficiary turns 17.
By transferring funds into an ABLE account before the beneficiary reaches age 18, families may be able to move assets into a structure specifically designed to help individuals with special needs save while preserving eligibility for certain public benefits.5
However, there is an important limitation: the rollover amount counts toward the annual ABLE contribution limit for that year.5 Careful coordination is necessary to avoid exceeding contribution thresholds or unintentionally disrupting other planning strategies.
Why Coordination Matters
As with many special needs planning decisions, the answer is rarely as simple as opening an account or making a contribution.
Families should evaluate how Trump Accounts interact with:
- SSI and Medicaid eligibility
- ABLE account contribution limits
- Special needs trusts
- Estate planning strategies
- Beneficiary designations
- Long-term caregiving and funding goals
A strategy that appears beneficial in isolation may create unintended consequences elsewhere if it is not coordinated with the family’s broader financial plan.
At Sequoia Financial Group Special Needs Financial Planning, we believe special needs planning should be BUILT FOR YOU. That means looking beyond individual accounts and considering how every planning decision works together to support long-term financial security, benefits preservation, and quality of life for the people who matter most.
Sources
- Congressional Research Service, “Trump Accounts: Overview and Policy Considerations”
https://www.everycrsreport.com/reports/R48910.html - Internal Revenue Service, “Treasury, IRS issue guidance on Trump Accounts established under the Working Families Tax Cuts”
https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-trump-accounts-established-under-the-working-families-tax-cuts-notice-announces-upcoming-regulations - Social Security Administration, Supplemental Security Income (SSI) Resource Limits
https://www.ssa.gov/ssi/text-resources-ussi.htm - Congressional Research Service, “Trump Accounts: Overview and Policy Considerations”
https://www.everycrsreport.com/reports/R48910.html - ABLE National Resource Center, ABLE Accounts Overview
https://www.ablenrc.org/what-is-able/what-are-able-accounts/
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Investment advisory services offered by Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training. This material is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Diversification cannot assure profit or guarantee against loss. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Sequoia Financial Advisors, LLC makes no representations or warranties with respect to the accuracy, reliability, or utility of information obtained from third parties. Certain assumptions may have been made by these sources in compiling such information, and changes to assumptions may have material impact on the information presented in these materials. The tax and estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation. Clients requesting tax return or estate preparation services are referred to a commonly held affiliate, Sequoia Tax Services, or a third party, and not Sequoia Financial Group.
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