There are legal ways to protect your assets and still enable you to qualify for Medicaid if needed. One recommendation is MAPT, or Medicaid Asset Protection Trust.
If you are new to MAPT you may wonder what is this and how does it benefit both you and your children?
A little background
Nursing home care is terribly expensive, but if you are eligible, Medicaid will pay for your nursing care. In order to qualify for Medicaid so that you can either move to a nursing facility or receive nursing care at your home, the rules say you must spend down almost all your money in compliance with federal government regulations.
However, you may want to be able to pass assets along to your beneficiaries, such as your children. Take heart, there are legal ways to do this and one of them is to set up a certain kind of Medicaid-oriented trust.
MAPT can help
A MAPT or Medicaid Asset Protection Trust will protect the assets it contains from being counted as available resources for purposes of Medicaid eligibility. If you have excess available resources under the rules, you will not be eligible.
MAPT has the usual trust structure. You are the grantor or trust maker, and you choose a trusted relative or friend to serve as trustee. A MAPT is an irrevocable trust, meaning that the grantor no longer owns any of the assets transferred into the trust and cannot take them back. The terms of the trust say specifically however that you give up the right to directly access or use the principal assets of the trust (and sometimes the income too). Therefore after five years have gone by (the so-called “five-year lookback period”), these assets are no longer counted against you for Medicaid eligibility. You usually put some but not all of your assets into a MAPT.
Benefits for everyone
A MAPT allows you as the grantor to meet the asset limit established by Medicaid without having to spend down all your assets. In addition, this kind of trust also protects the assets for your family members, avoids probate for its assets, and preserves tax advantages. Setting up a MAPT can help ease any concerns you might have about getting Medicaid to pay for your nursing care while still passing assets along to your children and other beneficiaries.