A Medicaid Asset Protection Trust is exactly as it sounds, it is a trust designed to protect assets from being counted for Medicaid eligibility.
An MATP allows a person to qualify for long term care benefits from Medicaid, while protecting assets from being depleted if long-term care is needed. To qualify for Medicaid, household assets must be under a certain level. Rules about asset levels are strict, and there is a five year look back period to see if an individual qualifies.
As long as the trust is created and assets transferred five years before the donor applies for Medicaid long-term care benefits, Medicaid will not penalize the donor for transferring assets, and the trust’s existence will not impact Medicaid eligibility.
Assets placed in a Medicaid Asset Protection Trust are not considered countable for Medicaid. Once the trust owns assets, Medicaid cannot count the asset and the asset cannot be seized to reimburse long term costs.
All MAPTs are irrevocable trusts, so once any assets are placed in the trust, the grantor loses control of the assets.
Do not transfer assets into a MAPT without a long-term plan for the assets and their eventual transfer to other family members.