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4 Reasons Why You Should Get Medicaid Asset Protection Trusts

4 Reasons Why You Should Get Medicaid Asset Protection Trusts

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Each state in the U.S. has its parameters set forth for a Medicaid program. The guidelines for Medicaid are established by federal law. However, each state is given leeway as to the limits and adjustments they can make. 

In general, elderly individuals applying for Medicaid are eligible if they meet the asset limit of USD$2,000. However, there are higher-level assets that are exempt from the calculation, plus other complicated asset rules also apply. Yet despite the existence of exemptions, there are still people who can’t afford this kind of care. Therefore, there’s still a need for a better strategy, and this is addressed by Medicaid Asset Protection Trusts (MAPT).

As a type of trust, the MAPT enables an ineligible candidate to become eligible for Medicaid. It’s often aimed at the elderly who need nursing care or receive home medical care. This trust is a valuable strategy if applicants want to meet the asset limit set by Medicaid, particularly when they have excess assets. That way, these assets will be protected for the benefit of the applicant’s relatives and children. 

That said, learn more about why it’s helpful to get MAPT. 

  1. The Assets Are Protected For The Beneficiaries

Upon applying to the MAPT, the elderly individual also lists and identifies the beneficiaries of their assets. This procedure means that the assets specified in the application are free from Medicaid recovery. Rather than being used to pay for nursing and elderly care expenses, these assets will be placed in a trust for the intended beneficiaries.

The good thing about MAPT is that this trust is irrevocable, which provides higher protection for these beneficiaries. When the trust is completed and signed by the applicant, it stays final even upon their death. Once the elderly Medicaid recipient passes away, the state cannot run after these assets as these are already held in protection for the rightful beneficiaries. 

  1. The Assets Are Protected From Tax Liabilities

One common route taken by elderly family members is to give their assets to their children or grandchildren once they enter a nursing home. The problem with this is that it can produce a huge gift tax to be billed to the recipients. Thus, rather than enjoying what their grandparents have given them, the grandchildren will instead be indebted to the state. And it’s due to the tax incurred from the gift they received, which happens to belong to the category of their elders’ assets. As a result, it burdens these beneficiaries who were merely the innocent heirs of their relatives’ generosity.

A better alternative to avoid this situation would be to put these assets in an irrevocable trust through the MAPT as a form of asset protection. While the beneficiaries may have to wait until their relative passes away before they gain ownership of these properties, it’s more comforting to know that these assets are placed in safekeeping for their sake. This process also eliminates the risk of being burdened by excessive and unnecessary tax liabilities later on.

  1. It’s A Better Alternative To Long-Term Insurance

Long-term insurance is more costly than Medicaid, not to mention riskier. There could be a great chance that you may not even get to use the insurance—which is good, in a way. But if you’ve already paid a hefty sum on the premiums, then that’s money you can’t get back. Thus, you’ll want to be more practical about saving your hard-earned money.

With MAPT, you’re not paying anything except for the specified assets that they can collect. Plus, it’s a better alternative because you’re not losing your money, and you’re earning protection instead. 

  1. It Gives You Access To Good Nursing And Elderly Care

Overall, the main goal of MAPT—apart from the protection of assets—is to give you access to good nursing and elderly care. You may not think you’d need it, but the truth is, the chances are high that you would. A majority of the elderly still end up needing long-term health assistance in their homes or a nursing facility.

However, this kind of care doesn’t come cheap. If you don’t have insurance to pay for it, you’ll typically be disqualified from accessing such care. This is where the benefit of Medicaid comes in; you can access quality nursing and elderly care by using your spent down assets to pay for it. Your remaining assets will then be held in a trust, kept for protection for the family members you’ll leave behind.


The Medicaid Asset Protection Trust is a program to protect an elderly person’s assets from being used to shoulder the nursing care bills. Rather than paying for expensive premium payments on elderly care, a more practical alternative is to apply for Medicaid trust. If you know of family members who will need nursing home care within the next five years or so, it might be a good idea to apply for this assistance now.

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