Many Alabama families worry about losing their life savings to nursing home costs. Long-term care expenses can exceed $8,000 to $12,000 per month and quickly deplete assets accumulated over a lifetime.
A Medicaid Asset Protection Trust (MAPT) is a planning tool that may help protect certain assets from future long-term care expenses while preserving eligibility for Medicaid benefits.
What Is a Medicaid Asset Protection Trust?
A Medicaid Asset Protection Trust is an irrevocable trust designed to hold certain assets outside of an individual’s ownership for Medicaid eligibility purposes.
Once assets are transferred to the trust, the Trustmaker no longer owns those assets directly. After the applicable Medicaid lookback period has expired, trust assets may not be counted as available resources for Medicaid eligibility purposes.
Why Consider a Medicaid Asset Protection Trust?
A properly designed trust may help:
- Protect a family home
- Preserve assets for children and loved ones
- Reduce exposure to nursing home costs
- Create a structured estate plan
- Avoid probate of trust assets
The Five-Year Lookback Period
Transfers to a Medicaid Asset Protection Trust are subject to Medicaid’s five-year lookback period.
Because of this rule, planning should occur before a nursing home crisis arises whenever possible.
What Assets Can Be Transferred?
Depending on your circumstances, assets may include:
- Real estate
- Investment accounts
- Certificates of deposit
- Non-qualified brokerage accounts
- Bank accounts
Each client’s situation is unique and requires individualized legal advice.
What Happens If I Need Nursing Home Care Soon?
If long-term care is imminent, a Medicaid Asset Protection Trust may not be the best option. Other Medicaid planning strategies may be available depending upon your circumstances and we can discuss those options in a consultation with you.
Is a Medicaid Asset Protection Trust Right for Me?
If you are concerned about protecting your home, preserving assets for your family, or planning for future nursing home costs, we encourage you to speak with an attorney experienced in Medicaid planning.
