Exploring the Benefits of a Medicaid Asset Protection Trust

 

 

 

 

 

 

 

 

 

 

 

 

As we age, our care needs evolve, often becoming not only more in-depth but also significantly more expensive. Medicaid is an important government program that helps families address these expenses, but how can you maintain eligibility if you have significant assets or wealth?

A Medicaid Asset Protection Trust (MAPT) may be the solution for you and your loved ones. This type of trust helps lower your net worth for Medicaid consideration, increasing your chances of qualifying for Medicaid support for services like in-home care or nursing home care.

Properly Structuring a Medicaid Asset Protection Trust

A Medicaid Asset Protection Trust is an “income only” trust, where someone other than you or your spouse serves as trustee. This setup allows you to remove assets from your estate, so Medicaid does not count them when determining your eligibility. You no longer own the assets (the trust does), but you are still able to derive income from like like the equity in a home or investment returns. It’s important to note, however, that these assets cannot be sold for profit once they are part of the trust until they are out of the trust.

Creating a MAPT effectively shields your assets from Medicaid’s income and net worth criteria, preparing you for potential long-term care needs while preserving financial stability.

Understanding the Medicaid Lookback Window

Medicaid assesses your financial history for the five years before your application. If you were ineligible for Medicaid during this period due to your income or asset value, your application will either be rejected or you will be informed of when your eligibility actually begins. This means you will have to pay for care out of pocket (or through other means) until you have been eligible for a full five years.

Assets must be transferred at least five years before applying for Medicaid. An exception is the Child Caregiver Exception, which allows the transfer of your home to an adult child who has lived with and cared for you for at least two years before applying.

Effective Medicaid Planning with Luis E. Barreto and Associates

Medicaid planning is an important element of planning for your future. You want to protect your assets and wealth so it is able to be passed down for generations to come. Establishing a MAPT requires the careful planning experience of an elder law and estate planning attorney.

At Luis E. Barreto and Associates, we tailor estate plans to our clients’ unique needs. If a MAPT aligns with your family’s goals, we will work with you to make sure timelines are met and the trust is properly funded. Contact our Miami estate planning law firm to find out more about how a MAPT can protect your assets and financial future.

Luis E. Barreto