Planning and applying for Medicaid can be overwhelming, especially when it involves “spending down” your hard-earned assets and savings. You may worry about losing everything you’ve worked for, being unable to leave anything for your loved ones and facing financial insecurity in your later years. But the future doesn’t have to be that way. This is where your Medicaid Asset Protection Trust (MAPT) steps in.
What is a MAPT, and how does it work?
A MAPT is a special type of trust that helps protect your assets while qualifying for Medicaid. It is an irrevocable trust, which means that:
- You cannot easily change or cancel it: The assets in a MAPT are no longer your personal property. This means they do not count towards Medicaid’s asset limits, helping you qualify for benefits.
- A trustee manages it: The trustee oversees the assets according to the rules set out in the trust agreement and in the best interests of the beneficiaries. Since you, as the grantor, cannot be the trustee, you do not have control over the assets.
In this way, MAPTs protect your assets from Medicaid’s spend-down requirements and Estate Recovery Program, which is when the state tries to collect the money it spent on your Medicaid benefits.
What assets can you place in a MAPT?
You can transfer several types of assets into a MAPT, such as:
- Real estate: This can be your primary home, vacation home, or investment property.
- Financial accounts: Savings accounts, certificates of deposit (CDs) and brokerage accounts.
- Personal property: Valuable items like jewelry, artwork and collectibles.
- Business interests: Ownership stakes in businesses or partnerships.
- Life insurance policies: Policies that have significant cash value.
However, before transferring your assets, note the five-year look-back period. This means that Medicaid will check any asset transfers made in the five years before you apply and count them towards your eligibility. It’s best to set up a MAPT well before you need Medicaid.
The best time to protect your assets is today
Gain peace of mind knowing that your assets are secure – now and in the generations to come. Learn more about how a MAPT can benefit you and your family.