Medicaid provides essential financial assistance for long-term care, but it also has estate recovery rules that allow the government to claim assets after a recipient’s passing. To prevent this, individuals can use Medicaid Asset Protection Trusts (MAPTs) to shield their wealth while maintaining Medicaid eligibility.
What Is a Medicaid Asset Protection Trust?
A MAPT is an irrevocable trust designed to hold assets in a way that prevents Medicaid from counting them toward eligibility requirements. Once assets are placed in the trust, they are no longer considered part of the individual’s estate, protecting them from Medicaid recovery efforts.
How a MAPT Works
- Transfers Ownership – Assets placed in the trust are no longer owned by the individual, preventing Medicaid from claiming them.
- Maintains Medicaid Eligibility – Since assets in the trust are excluded from Medicaid calculations, individuals can qualify for benefits while preserving wealth.
- Protects Heirs – Ensures that assets are passed to beneficiaries instead of being used to repay Medicaid expenses.
Steps to Set Up a Medicaid Asset Protection Trust
1. Consult an Estate Planning Attorney
Since Medicaid laws vary by state, working with an experienced estate planning attorney ensures compliance and proper structuring.
2. Choose an Irrevocable Trust
A MAPT must be irrevocable, meaning it cannot be altered or revoked once established. This ensures that assets remain protected.
3. Select a Trustee
The trustee manages the trust and ensures assets are distributed according to the grantor’s wishes.
4. Transfer Assets to the Trust
Common assets placed in a MAPT include:
- Real estate
- Investments
- Bank accounts
- Business interests
5. Observe the Medicaid Look-Back Period
Medicaid has a five-year look-back period, meaning assets transferred into a trust within five years of applying for Medicaid may still be counted. Planning ahead is crucial.
Benefits of a Medicaid Asset Protection Trust
- Preserves assets for heirs
- Ensures Medicaid eligibility
- Avoids probate and estate recovery
- Provides financial security for loved ones
Secure Your Future with Expert Estate Planning
A Medicaid Asset Protection Trust is a strategic way to safeguard assets while ensuring access to long-term care benefits. For professional guidance, contact The Eastman Law Firm:
Contact Us Today
Name: The Eastman Law Firm
Address: 4901 W. 136th Street, Ste. 240Leawood, Kansas66224
Phone Number: (913) 908-9113
Website: www.theeastmanlawfirm.com
