Protect Your Assets with a Medicaid Asset Protection Trust

A Medicaid Asset Protection Trust (MAPT) is a specialized estate planning tool designed to help individuals qualify for Medicaid benefits while preserving their assets for their loved ones. By placing assets into an irrevocable trust, individuals can protect their wealth from being spent on long-term care costs, such as nursing home expenses, and ensure their assets are passed down to their heirs.

How Does a Medicaid Asset Protection Trust Work?

A MAPT functions by transferring ownership of certain assets into the trust, which is managed by a designated trustee. Once assets are placed in the trust, they are no longer considered part of the grantor’s countable assets for Medicaid eligibility purposes. However, because the trust is irrevocable, the grantor gives up direct control over these assets, ensuring they are legally protected from Medicaid’s spend-down requirements.

Key Benefits of a Medicaid Asset Protection Trust

• Protects Assets – Assets placed in the trust are shielded from Medicaid estate recovery, allowing families to pass down wealth to future generations.
• Helps Qualify for Medicaid – By removing assets from the grantor’s ownership, a MAPT helps individuals meet Medicaid’s strict asset limits.
• Preserves Family Wealth – Instead of spending personal assets on long-term care, individuals can ensure their savings and property remain intact for their beneficiaries.
• Retains Some Income Rights – In some cases, the grantor may still receive income generated from the trust assets while preserving the principal.

Important Considerations

• Irrevocability – A MAPT cannot be changed or revoked once assets are transferred, meaning careful planning is essential.
• Five-Year Lookback Period – Medicaid imposes a five-year lookback period on asset transfers. Any assets moved into a MAPT within five years of applying for Medicaid could result in penalties or delays in eligibility.
• Proper Structuring is Key – To ensure compliance with Medicaid rules and maximize asset protection, the trust must be properly drafted by an experienced attorney.