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Medicaid Asset Protection Trusts FAQs

ElderlyParent

If you are helping an elderly parent or relative plan for nursing home care, or if you are making plans for yourself in the future, it is essential to consider a variety of options for protecting your assets while remaining eligible for Medicaid coverage. One option that many New York residents consider when it comes to elder law and asset protection is a Medicaid Asset Protection Trust (MAPT), sometimes called a Medicaid Qualifying Trust or just a Medicaid Trust.

Q: What is a Medicaid Asset Protection Trust?

 A: A Medicaid Asset Protection Trust is a special type of irrevocable trust that can be created in order to protect assets while qualifying for or remaining eligible for Medicaid benefits. An irrevocable trust is one that cannot be amended or closed by the grantor at any point in the grantor’s lifetime. Once an irrevocable trust has been created, the terms of that trust cannot be changed.

Q: Do I Need a Medicaid Asset Protection Trust? 

A: Whether or not a MAPT is the best asset protection tool for you will depend upon your circumstances. Generally speaking, when you transfer assets in New York, you can trigger the Medicaid “look-back period,” which is five years in most cases. Accordingly, if you require long-term care in a nursing home soon after you have transferred the assets, you could have a penalty assessed and may need to spend down assets before you are eligible for Medicaid coverage. Yet if you plan ahead and establish a Medicaid Asset Protection Trust, you may be eligible for Medicaid coverage without having to spend down your assets. The MAPT can still provide you with certain benefits, but those assets will become the property of the trust.

Q: Are Medicaid Asset Protection Trusts the Same As Other Types of Trusts? 

A: While MAPTs are one type of irrevocable trust—and there are many other types of irrevocable trusts—MAPTs are distinct from other types of trusts. You should not create a Medicaid Asset Protection Trust unless you are using it for long-term care and Medicaid eligibility. An asset protection lawyer at our firm can speak with you about other types of trusts.

Q: Can Another Type of Trust Protect My Assets? 

A: For Medicaid eligibility purposes, a special needs trust or a pooled trust may be able to protect your assets, but these are specific types of trusts that are only applicable in some cases, as the New York Department of Health explains. You should seek advice from an elder law attorney in Westchester or Putnam about trusts that may be right for you based on your circumstances.

Contact a Pleasantville or Mahopac Elder Law and Asset Protection Attorney Today 

If you have questions about asset protection in New York for yourself or for an aging parent, you should seek advice from one of our Westchester County asset protection attorneys. Planning ahead to protect assets is extremely important. Although most of us do not think carefully about the realities of aging and the expansive medical needs of many older adults, many seniors do require long-term care in a nursing home. It is critical to have a plan to protect assets while remaining eligible for medical coverage. Contact Meyer & Spencer, PC today for more information about how we assist individuals and families with elder law and asset protection in Westchester County, Putnam County and throughout the State.

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