Qualifying for Medicaid can be a lifesaver if you suddenly find yourself in need of long-term care. A stay in a nursing home or extended home care often come with crippling costs, which Medicaid can help defray. The qualification process, however, can be highly complicated and can lead you to spend most of your assets. One way to protect yourself and still qualify for Medicaid, though, is through a helpful tool known as a Medicaid Asset Protection Trust.
What is Medicaid Planning and How Does it Work?
When it comes to future planning, most people think about wills, trusts, and other aspects of their estate plan. Medicaid planning is related to estate planning in that it’s designed to help you protect yourself in the future. Medicaid will cover a significant portion of your costs related to long-term care, such as a stay in a nursing home—but to qualify, you must meet certain stringent guidelines. Medicaid qualification is based on financial limits. As of 2024, in order to qualify, you cannot make more than $2,829 a month or have more than $2,000 in countable assets.
The tricky part about applying for Medicaid is that the process is subject to a look-back period of five years. Say you need to go into a nursing home, but have significantly more than $2,000 in assets. You can’t simply give them away to a loved one and qualify, because you were over during the past five years. This is where Medicaid planning comes in; it allows you to prepare in advance for long-term care needs by smartly managing your assets now.
What is a Medicaid Asset Protection Trust?
A Medicaid Asset Protection Trust (MAPT) is a helpful tool that allows you to qualify for Medicaid while still retaining control over your assets. In this arrangement, you transfer your assets into a trust, pulling yourself below the $2,000 limit. In a MAPT, your assets are managed by a trustee, who administers the trust according to your wishes. The assets are no longer legally yours, since they are officially part of the trust, so they do not count against your asset limit. At the same time, because the trust operates according to your directions, you can rest easy knowing that the assets are being well-managed and will ultimately be distributed to your loved ones. It can be difficult to decide when to set up a MAPT. You’ll need to balance the fact that you may still need to have access to your assets with the understanding that the trust has to be set up well in advance of your need for long-term care. Speaking with a professional estate planning attorney can help you strike this delicate balance.
Contact the Estate Planning Attorneys at Deliberato Law Center
At the Deliberato Law Center, we have many years of experience helping our clients navigate the tricky balance required by Medicaid planning. If you have questions about setting up a Medicaid Asset Protection Trust or any other aspect of estate planning, do not hesitate to give us a call at (216) 341-3413 or fill out the form below.
Recent Comments