Medicaid Asset Protection Trusts

A Medicaid Asset Protection Trust (MAPT) can be a useful estate planning tool. The decision to transfer assets to this time of trust is a complex one. The purpose of this article is to provide an overview of what a MAPT is and why you might consider one, to help provide a foundation for further discussion with your estate planning attorney or financial advisor. This article summarizes a recent Yahoo Finance article on this topic


What is a Medicaid Asset Protection Trust?

  • It is a trust that you might set up if you believe you or your spouse may need long term care at some point in the future.
  • In order for Medicaid to pay for your care, you have to qualify, which in general requires certain requirements for income and assets.
  • Transferring assets to a MAPT may allow you to preserve your savings and qualify for Medicaid to pay for long-term care. 


 How does a Medicaid Trust work? 

  • A Medicaid Trust is an irrevocable trust. 
  • This means that once you transfer assets in, you cannot transfer them back out. 
  • You can transfer assets such as a qualified retirement account, vehicles, personal assets, certain life insurance policies and even your home. 
  • A trustee is named to manage trust assets and the trust can have on eor more beneficiaries. 
  • The purpose of transferring the assets is to help you to avoid the spend-down requirements to qualify for coverage.


What are some concerns to keep in mind when considering a Medicaid Trust?


  • Medicaid has a look-back period. 
  • If you transfer withing the look-back period, the purpose of the trust may be frustrated.
  • Because the trust is irrevocable, you need to be very certain that the transfer of assets is the right decision for you. 
  • Establishing the trust takes some amount of cost and time and another estate planning tool may be better suited to accomplish your financial planning goals.  

Contact an Experienced Estate Planning Firm

If you have questions about planning for long-term care of any estate planning issue, we are here to help. At the Law Office of David Knecht, we have extensive experience with estate planning and look forward to exploring all your options with you to create the best plan for you and your loved ones.  Contact us at 707-451-4502.