Medicaid Asset Protection Trust (MAPT)
Preserve Your Assets While Qualifying for Medicaid
Long-term care costs can quickly deplete a lifetime of savings, leaving families financially vulnerable. A Medicaid Asset Protection Trust (MAPT) is a powerful legal tool that allows individuals to qualify for Medicaid benefits while preserving assets for their loved ones. We help clients protect their wealth and secure their financial future through strategic Medicaid planning.
What is a Medicaid Asset Protection Trust?
A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust designed to protect assets from being counted for Medicaid eligibility. This type of trust allows individuals to legally transfer assets out of their name while still benefiting from them indirectly.
What is are other names used to describe a MAPT?
A MAPT may also be referred to by several other names, depending on the context and the legal professional using the term, including:
- Five Year Trust
- Income Trust
- Legacy Trust
- Veterans Asset Protection Trust (if also trying to qualify for veteran benefits)
- Medicaid Trust
- Asset Preservation Trust
Key Benefits of a MAPT:
- Protects Your Home & Savings – Ensures that assets are preserved for your beneficiaries instead of having to be spent on long term care costs.
- Qualifies You for Medicaid – Helps you meet Medicaid’s strict asset limits without spending down your wealth.
- Avoids Probate – Keeps your assets out of the probate process, ensuring a smooth transfer to beneficiaries.
- Provides Tax Advantages – Allows for a basis adjustment (generally a step-up in basis) on inherited assets, reducing capital gains taxes.
- Maintains Limited Access – While you cannot directly access principal assets, you can still receive income generated by trust investments.
How a Medicaid Asset Protection Trust Works
- Assets Are Transferred to the Trust – You move assets such as your home, savings, or investments into the trust.
- A Trustee Manages the Trust – A trusted individual (potentially the settlor which is the person who creates the trust) oversees and manages the trust assets.
- Income May Be Distributed to You – While the trust principal (what is put in the trust) is protected and cannot be distributed to you, you can elect to receive income from trust assets.
- After 5 Years, Assets Are Fully Protected – Medicaid has a five-year look-back period, meaning assets transferred into a MAPT must be in the trust for at least five years before applying for Medicaid benefits to avoid a penalty period.
- Assets Pass to Beneficiaries After Death – Upon your passing, the assets in the trust are distributed to your chosen heirs, avoiding Medicaid recovery.
What Can Be Placed in a MAPT?
- Primary Residence – Protect your home from Medicaid estate recovery.
- Savings & Investments – Shield financial assets while still generating income.
- Life Insurance Policies – Preserve cash value policies for beneficiaries.
- Stocks & Bonds – Maintain investment growth while securing Medicaid eligibility.
- Family-Owned Businesses – Ensure business continuity while planning for future care.
Who Should Consider a Medicaid Asset Protection Trust?
- Seniors looking to protect assets from nursing home costs.
- Individuals planning for future Medicaid eligibility.
- Homeowners who want to pass property to their beneficiaries.
- Families concerned about long-term care expenses.
Where Can I Get More Informaiton on a MAPT?
Here are some articles discussing a MAPT in more detail.
Start Protecting Your Assets Today
Medicaid planning requires careful legal guidance. Our experienced attorneys will help you set up a Medicaid Asset Protection Trust tailored to your financial situation and future care needs.
Secure your future. Protect your assets. Plan ahead with a MAPT today!
