As we age, it’s important to think about protecting our assets and planning for the future. One way to protect your home and other assets is through a Medicaid Asset Protection Trust (MAPT). In this article, we’ll explore what a MAPT is, how it works, and how it can benefit you and your family.
What is a Medicaid Asset Protection Trust?
A Medicaid Asset Protection Trust is a legal tool that allows you to protect your assets from being used to pay for long-term care expenses, such as home health care, assisted living, and nursing home costs. By transferring ownership of your assets to the trust, you can help ensure that they will not be subject to Medicaid’s “look-back” period, which can penalize individuals who transfer assets within 5 years of applying for the Medicaid nursing home care program and within the new 2.5-year look-back for Medicaid home and community-based services.
How Does a Medicaid Asset Protection Trust Work?
A MAPT is a type of irrevocable trust. The trust will be managed by a trustee, who will distribute the assets according to the terms of the trust. Typically, the trust will provide for the distribution of income from the assets to you during your lifetime, and then to your heirs after your death.
Because the trust is irrevocable, it is considered a separate legal entity from you, and your assets will no longer be considered part of your estate for Medicaid eligibility purposes. This can help protect your assets from being used to pay for long-term care expenses and can also help ensure that your heirs receive a larger inheritance.
Benefits of a Medicaid Asset Protection Trust:
- Protection of Assets: By transferring ownership of your assets to the trust, you can help protect them from being used to pay for long-term care expenses.
- Medicaid Eligibility: Because the trust is a separate legal entity, your assets will not be considered part of your estate for Medicaid eligibility purposes.
- Inheritance Protection: The trust can help ensure that your heirs receive a larger inheritance.
- Control of Assets: Although you will no longer own the assets transferred to the trust, you can still maintain some control over them by appointing a trusted trustee to manage the trust.
- Estate Planning: A Medicaid Asset Protection Trust can also be a useful estate planning tool, as it can help avoid probate and ensure that your assets are distributed according to your wishes.
A Medicaid Asset Protection Trust can be a powerful tool for protecting your home and other assets from being used to pay for long-term care expenses. By transferring ownership of your assets to the trust, you can help ensure that they are not subject to Medicaid’s “look-back” period and can also provide for your heirs after your death. Planning early is essential for successful Medicaid asset protection planning.
If you are considering a MAPT, it’s important to consult with an experienced estate planning attorney who can help guide you through the process and ensure that your wishes are carried out. Fratello Law’s attorneys have decades of experience protecting client assets with Medicaid asset protection trusts and Medicaid applications.