Medicaid Asset Protection Trusts: What is it and When Do You Need One?

What is a Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust (MAPT) allows you to qualify for Medicaid while protecting your assets.  The trust is designed to protect assets from being counted for Medicaid eligibility and can be designed to provide asset protection for your beneficiaries from creditors, divorce, or judgments. The Medicaid Asset Protection Trust will allow a person to protect some or all of their assets by putting those assets into an irrevocable trust.

How to Protect Assets From Medicaid Recovery?

An irrevocable trust is a type of trust where its terms cannot be modified, amended or terminated except under certain conditions. The trust becomes the owner of the assets, which you’ll retitle in the trust’s name. If you are close to retirement age or you have passed retirement age, a MAPT may be right for you. In order to apply for Medicaid, you must be eligible.

Do Trusts Count Against Medicaid?

When determining if someone is eligible, Medicaid will look at their countable resources. Examples of Countable Resources are Checking accounts, Investment accounts, CDs, Cash, Real property (other than the home), Boats, RVs, and more. Essentially, Medicaid will run a financial analysis to determine whether or not a person qualifies for coverage. Medicaid has a five-year look back period.  That means that you will need to create the trust, transfer the assets to it (fund the trust), and not have a need for Medicaid for at least five years. After the five-year mark of the funding of the trust, you will be fully protected and will qualify for Medicaid.

If you have more questions such as how much Medicaid Asset Protection Trusts costs, or if this is right for you, or have Elder Law questions contact us for a free consultation!

Lena Salameh, J.D.