Why a Medicaid Asset Protection Trust May Be Best For You

A properly drafted and funded Medicaid Asset Protection Trust may help you keep your property safe and secure from Medicaid asset recovery, as well as help you remain eligible for benefits. A qualified attorney can structure the trust to help ensure that your assets remain protected and retain the maximum possible value for your heirs without jeopardizing your long-term care needs.

What is a Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust is a legal document designed to hold and protect your assets while preserving your eligibility for Medicaid benefits. Rather than having your assets (bank accounts, stocks, etc.) count towards the asset limit for Medicaid, you can transfer assets into the trust and they will not be counted toward the limit. The trust holds the property for the beneficiary, and the trustee controls the income and distributes principal as needed for health expenses. Upon death, all of the remaining assets will be distributed to beneficiaries as you specified.

This arrangement removes the assets from your personal estate, putting them beyond the reach of creditors and government agencies. Many of those who utilize Medicaid are unaware of the fact that the program will attempt to recover the costs of the care provided from the estate of the Medicaid beneficiary upon their death. A Medicaid asset protection trust will protect your assets as they’re no longer in your name, so Medicaid asset recovery cannot recoup them from your estate. Trust assets are also protected from the transfer penalties that can disqualify you from receiving Medicaid benefits if you give away your money or property to others. 

Medicare agencies will look back five years prior to determining an applicant’s total countable assets in order to determine if they have transferred assets out of their own names with the intent of qualifying for Medicaid. This means that if you are planning to transfer your home or other assets into a Medicaid asset protection trust in order to prevent the program from collecting on those assets, you must establish and fund the trust before the 5-year look-back period or else risk losing your eligibility for Medicare coverage altogether.

If a Medicaid asset protection trust seems right for you, Carroll Law Offices can help. We’re able to assist you through the process of establishing and funding your trust, as well as integrating it into your existing estate plan. Contact us today to get started on a plan that works for you.