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Protect your assets with a Medicaid Asset Protection Trust

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Protect your assets with a Medicaid Asset Protection Trust

Colorado residents who become incapacitated unexpectedly may find that their quality of life and savings dwindle rapidly. Medicaid can slow the financial drain, but many people have too many assets to qualify. However, you can take steps that allow you to become eligible for government programs while protecting the assets that can help take care of your family after you pass on.

According to the American Council on Aging, the goal of Medicaid’s look-back period is to prevent applicants from selling assets under fair market value or giving them away to meet the eligibility limit.

MAPT requirements

The look-back period is 60 months, which means that you must set up your MAPT at least five years before you need it. The best time to do this is when Medicaid is not apparent in your near future when you are healthy. Medicaid Asset Protection Trusts are different from family trusts and can help you avoid “spending down” to meet the asset requirements.

MAPT benefits

Unlike some other types of trusts which you can modify once you fund them, MAPTs are irrevocable. Once you transfer assets into them, they must remain there. The advantage is that you no longer own them. Legally the trust owns the contents, so Medicaid cannot count them as your assets. By transferring ownership, creditors cannot touch the contents either, which protects them if you experience financial difficulties or from becoming part of a divorce settlement.

Developing an asset protection strategy takes time. Understanding Medicaid requirements can help you protect the family home and other property if you need long-term care.