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Protecting Aging Loved Ones: Medicaid Asset Protection Trust Planning

medicare asset protection trust

Older Americans are one of the fastest-growing demographics in the country. Our senior population represents more than 1 in every 8 Americans, and a person turning 65 has a 70% chance of needing some type of long-term care (“LTC”) services in their remaining years, according to the Administration for Community Living. Because people are living longer, proactive longevity planning is critical in order to protect hard-earned assets from being depleted later in life due to LTC expenses, preserving families’ wealth and loved ones’ quality of life.

A Medicaid Asset Protection Trust (“MAPT”) is exactly as it sounds — a trust designed to protect a Medicaid applicant’s assets from being counted for eligibility purposes. MAPTs can be a valuable planning strategy when an applicant has assets over the limit to qualify for Medicaid benefits. A MAPT can allow a person to both receive Medicaid benefits and asset protection if LTC is needed. If structured properly, MAPTs also offer income tax and creditor protection benefits for the beneficiaries of the trust when the trust owner passes away.

Planning well in advance of the need for LTC is the best course of action when considering a MAPT, considering Medicaid can review all asset transfers for a period of five years prior to the application date. Since the rules change frequently and vary by state, it is imperative that the trust be set up correctly so that the assets transferred into the trust will be exempt from Medicaid’s asset limit.

Our Elder Law Practice Group can assist you or your loved ones with implementing a plan that could save your family a significant amount of money and stress — contact us for a free consultation.