Medicaid Asset Protection Trust®—What is It

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Medicaid Asset Protection TrustWhat is It
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Medicaid, in general, is a health care program in
the United States for those who have limited
resources and can be for individuals or families.
It is a government insurance program. For
low-income individuals and families it is the
largest source of funding for health and
medical-related services. In addition to falling
within the set income guidelines the applicant
must also be a legal permanent resident or
citizen of the United States.
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A Medicaid Asset Protection Trust (MAPT) is a
legal relationship that is created to help a
family or individual qualify for Medicaid. With
a MAPT, it is giving another party such as a
family member the control of any property as
trustee that is contributed to the MAPT by the
family or individual who is trying to qualify for
Medicaid. The MAPT takes legal title to the
property. When the trust is planned and created
carefully it has the potential to make that
family or individuals assets exempt from being
considered when they apply.
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One example for the need to plan with the use of
a MAPT is long-term nursing home care. There
may come a time when a person needs to be move to
a nursing home for long-term care, which can be
very expensive. If they already have Medicare,
which is a medical insurance program provided by
the United States for disabled and
retirement-aged individuals, it will only pay a
limited amount for staying in a nursing home.
Medicare will also place restrictions on what it
will pay for during their stay there, so this
will leave many either paying for the rest out of
pocket or finding another way to pay for the
nursing home.
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If the individual cannot afford to stay in a
nursing home they can apply for Medicaid, even if
they have Medicare. At this point the individual
going into the nursing home will be expected to
use any of the assets, income, or any other
resources to pay for the nursing home before
Medicaid starts to pay. There is also a chance
they will not qualify for Medicaid if their
income and assets are above the income
guidelines. This is where a Medicaid trust comes
into play because it will help to protect their
assets and help them to qualify for the extra
help in paying for a nursing home long-term.
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When a trust is created the individual will name
a trustee to manage assets held in the trust.
The trustee has a fiduciary duty to the
beneficiaries which means that the trustee manage
the assets for the best interest of the
beneficiaries the trustee cannot use the property
as they want but has to follow the rules that
were set by the trust agreement. This type of
Medicaid trust is called an irrevocable trust.
When the one setting up this trust dies, the
beneficiaries get the property held in the trust
pending the terms of the trust.
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