The Medicaid Asset Protection Trust

Ongoing healthcare is a pain point for many seniors and their families. The financial uncertainty created by rising healthcare costs and the reality of declining health is a huge stressor.

And while Medicaid is supposed to help families meet the costs of senior healthcare, many seniors are over the income threshold, over the asset threshold, or both so they don’t qualify for this benefit—even though they cannot afford the out-of-pocket price of their care.

An Estate Planning Attorney Can Help with Medicaid Eligibility
Medicaid planning can help a senior successfully navigate through the daunting process of qualification. A Medicaid Asset Protection Trust (MAPT) is one way a senior can potentially protect their assets and still qualify for Medicaid.

For example, here’s a general overview of how a senior can stay in their home and qualify for the benefit:

  • With a MAPT, the home becomes a trust asset. The senior gives up ownership and control of the asset but retains use of the home. At death, the home passes to the beneficiaries. Key aspects of the MAPT are that it is irrevocable, and the grantor cannot be the trustee. Because of these aspects, the senior has completely relinquished ownership and control, as required by Medicaid, and the trust asset not included in Medicaid’s eligibility tabulation.

Timing Is Paramount
Medicaid is on the lookout for applicants who dispose of their assets in order to qualify for benefits. There’s a 5-year lookback period (except in California, where the lookback period is shorter) for tabulating assets. The MAPT is a valid way to accomplish your goals, but it must be in place well before you apply for benefits.

So, if you think you may need Medicaid assistance when you become eligible as a senior (starting at 65), you need to begin exploring this planning strategy in your late 50s.

Estate Recovery Program Protection
Medicaid also has an estate recovery program. They can come after non-probate assets for reimbursement after a recipient passes away. In most states, they cannot come after non-probate assets. Assets that are placed in a MAPT are non-probate assets and, therefore, can be protected.

Medicaid Is Complex
Medicaid is a federal program, but because it is jointly funded by the federal and state governments, each state administers the benefit a little differently. Additionally, Medicaid requirements are complex and ever evolving. Finally, everyone’s circumstances and needs are specific. For these reasons, it is important to work with an experienced attorney when it comes to Medicaid planning.

Work with an Experienced Florida Medicaid Attorney
There are a lot of ins and outs to protecting your assets and qualifying for Medicaid.