What Is a Medicaid Asset Protection Trust?

Medicaid is a government benefits program that may help an older adult pay for nursing home care, if specific income and asset eligibility requirements are met. Medicaid planning with a qualified professional, such as our attorneys at Asset Protection & Elder Law of Georgia, is a process through which a senior may be able to take steps to conform to the eligibility requirements before applying for benefits. A Medicaid asset protection trust (MAPT), which is a specialized type of irrevocable trust, is one option that can help a senior become eligible for benefits, while protecting their assets.

Medicaid Benefits for Long-Term Care

Medicaid is a jointly-administered federal and state government program that provides specific benefits to eligible individuals. The available benefits include expenses for long-term care, which can help aging seniors cover the extremely high costs of nursing home care. However, strict income and asset eligibility requirements are part of the complex regulations that govern the program.

The program does provide strategies and tools that can help an individual meet the eligibility requirements, even in situations where it appears they may not qualify. But using these tools requires assistance from a knowledgeable professional who is familiar with the detailed regulations. Planning in advance is imperative, because of how assets are counted in determining eligibility. If an individual attempts to qualify for Medicaid on their own by transferring assets to family members, those efforts may cause significant problems, because Medicaid has a five-year look back period in calculating assets for eligibility purposes. Certain types of transfers within that five-year period result in the assets still being counted. The transfer may also result in delaying receipt of benefits.

In addition to avoiding asset transfer limitations, Medicaid planning can provide protection for many of an individual’s assets, including the family home. Advance planning may also avoid Medicaid estate recovery, a process through which the government recovers paid benefits from a deceased beneficiary’s estate. As part of Medicaid planning, an option for protecting assets and achieving eligibility for benefits is to establish a Medicaid asset protection trust (MAPT). Setting up an MAPT requires assistance from a Medicaid planning professional. It is not something that can be accomplished properly without knowledgeable guidance.

Medicaid Asset Protection Trusts

A Medicaid asset protection trust or MAPT is a specialized type of irrevocable trust that is set up to help an individual meet the eligibility requirements and asset limitations for Medicaid long-term care benefits. An MAPT should be set up with assistance from a Medicaid planning professional, well in advance of the potential need for nursing home care.

An MAPT enables a person to qualify for long-term care benefits from Medicaid, while protecting assets from depletion if nursing home care is needed. In order to be most effective, the trust must be created at least five years before the need for long-term care arises, because of the Medicaid look-back period. Assets in the trust for at least five years are not countable for Medicaid eligibility, and the assets also cannot be taken to reimburse Medicaid benefits. Generally, when an MAPT protects a senior’s primary residence, the homeowner may continue to live in the home just as before ownership was transferred to the trust.

When an MAPT is created through the Medicaid planning process as part of an overall plan, the assets can eventually benefit family members or other heirs. However, a senior should not transfer assets into an MAPT or any other type of irrevocable trust unless the senior has established a long-term plan for their assets by completing the Medicaid planning process with a qualified professional.

Your Medicaid planning professional drafts an MAPT to comply with all applicable regulations and rules and explains how those assets will be protected in the trust. As part of an overall plan to spend down under Medicaid spend-down rules, an MAPT can help achieve eligibility for benefits while protecting your assets. A Medicaid asset protection trust is one way to protect assets, including the family home, from Medicaid estate recovery, but it is not the only option for accomplishing that goal. There are other options for protecting assets. Which option is the most suitable depends on the senior’s overall financial and personal circumstances. Exploring the alternatives and choosing the best option is one of the primary reasons that consulting with a Medicaid planning professional is essential.

Talk With Our Georgia Medicaid Planning Attorneys

At Asset Protection & Elder Care of Georgia, Medicaid planning and nursing home planning are important parts of our services. Our Medicaid planning attorneys have in-depth knowledge and experience in the Medicaid rules and regulations that govern applying for benefits and setting up an overall plan for achieving eligibility. If you need to plan for Medicaid, nursing home care, and other long-term needs for yourself or a loved one, we can answer all your questions and help you make the right decisions.

We provide Medicaid planning services to clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County and Paulding County. Call us at (770) 382-0984 or contact us through our online form.