ARTICLE: The Medicaid Asset Protection Trust

The Medicaid Asset Protection Trust

The problem of declining health combined with the ever-increasing cost of healthcare—including assisted living or nursing homes—weighs heavily on the minds of many aging adults and their children.

Medicaid is supposed to be the solution to help families meet the costs of senior health care. Age-based eligibility begins at age 65. But ironically, many seniors cannot afford the out-of-pocket cost of their health care but also aren’t eligible for Medicaid because they are either over the income threshold, over the asset threshold, or over both.

A Medicaid Asset Protection Trust (MAPT) Can Help with Medicaid Eligibility
Medicaid’s financial thresholds must be met to qualify for the program, and this is where Medicaid planning comes in. A Medicaid Asset Protection Trust (MAPT) is one way a senior can potentially protect their assets and still qualify for Medicaid. Here’s a general overview of how it works:

  • The senior gives up ownership and control of the assets (typically their home and other financial assets) by placing them in the MAPT but retains use of the assets. When the senior passes away, the assets pass to the beneficiaries. MAPT assets are not included in Medicaid’s calculations for eligibility. Key aspects of the MAPT are that it is irrevocable, and the grantor (the person setting up the trust) cannot be the trustee. Because of these aspects, the senior has relinquished ownership and some control, as required by the Medicaid laws.

The Time for Medicaid Planning Is Now
Medicaid has a 5-year lookback period (except in California, where the lookback period is shorter) when an application is made. They’re looking for applicants who dispose of their assets in order to qualify for Medicaid. The MAPT is a valid way to accomplish your goals, but it must be in place well before you apply for benefits.

If you think you may need Medicaid assistance in the future, you need to begin planning strategy well in advance. For example, if you plan to apply for the program when you become eligible at age 65, you’ll need to start planning in your late 50s.

Medicaid’s Estate Recovery Program
Additionally, Medicaid has an estate recovery program to access a deceased recipient’s estate for reimbursement when possible. In most states, including New York State, they cannot come after non-probate assets. Your assets that pass through a MAPT are non-probate assets and, therefore, can be protected.

Medicaid Is Complicated
Medicaid is a government program that is jointly funded by the federal and state governments and administered by each state according to federal requirements. As a result, there are some differences in how each state administers the program. Additionally, Medicaid requirements are complicated, and they change both rapidly and frequently. Finally, everyone’s situation is unique. For these reasons, working with an experienced Medicaid attorney is crucial.

Work with an Experienced Corning Medicaid Attorney
As you can see, there are a lot of ins and outs to protecting your assets and qualifying for Medicaid. Roth Elder Law, PLLC has extensive experience with Medicaid qualifications. Call us today to schedule an initial meeting at 607-962-6162.

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We at Roth Elder Law, PLLC, believe in providing services in a way that clients can easily understand and meaningfully participate in designing and maintaining their estate plan for their loved ones, as well as be assured that their plan will be administered according to their wishes.