How Do Medicaid Asset Protection Trusts Work?

 Posted on January 29, 2025 in Estate Planning and Probate

Most people will need Medicaid or Medicare later in life. Few people are able to maintain private insurance between the time they retire and the time they pass away. Medicaid and Medicare can help people access the care they will need during their old age. Nursing home care can be incredibly expensive - paying out of pocket is not an option for most people. A quality nursing home can cost upwards of $5,000 per month. The problem with using Medicaid is that you can be subject to a Medicaid reimbursement action. A Medicaid reimbursement action can force you to pay Medicaid back using any assets you have. A Medicaid Asset Protection Trust (MAPT) can help protect your assets from Medicaid reimbursement and help you qualify for Medicaid in the first place. An experienced San Antonio, TX trust attorney can help you set up this essential type of trust.

MAPTs Are Irrevocable Trusts 

A MAPT is a type of irrevocable living trust. It is the fact that the trust is irrevocable that makes it so protective. When you create an irrevocable trust, you no longer officially own or control any assets you put into the trust. You cannot withdraw at will. However, you can appoint a trustee to manage the trust for your benefit for the remainder of your lifetime. Your trustee controls withdrawals from the trust. While you might feel concerned about losing control of your assets, know that your trustee has a fiduciary duty to you and must make distributions according to your best interests. In practice, you can generally just ask your trustee when you need to retrieve property from the trust.

Because you cannot make withdrawals from your irrevocable trust at will, you also cannot be forced to make withdrawals to satisfy a Medicaid reimbursement action. Any assets you put in your MAPT are effectively protected against Medicaid reimbursement.

How a Medicaid Asset Protection Trust Helps You Qualify for Medicaid 

MAPTs are also essential for helping people qualify for Medicaid. To get Medicaid, you will need to show financial need. Having too many assets readily at your disposal can mean that you do not qualify for this essential program and would be expected to deplete your assets by paying for care before you can apply again and get on Medicaid.

Once you place assets in a MAPT, they are no longer legally "your" assets and cannot be counted against you when you are applying for Medicaid. This can mean getting coverage earlier and preserving the bulk of your wealth.

Contact a San Antonio, TX Trusts Attorney 

Geoff Mayfield, Attorney at Law is experienced in helping people protect their assets while still qualifying for Medicaid. Dedicated Bexar County, TX irrevocable trusts lawyer Geoff Mayfield will work closely with you to develop the trust scheme you need. Contact us at 210-535-0870 for a complimentary consultation.