A Medicaid Asset Protection Trust (MAPT) is one option a person may consider to protect their assets from Medicaid and nursing homes or long-term care.
A MAPT is an irrevocable trust created during your lifetime. The primary goal of a MAPT is to transfer assets to it so that Medicaid won't count these assets toward your resource limit when determining whether you qualify for Medicaid benefits. However, creating an irrevocable trust comes with a certain lack of control over the assets you transfer to this trust. Before making such a significant decision, consider some pros and cons to see if this long-term care strategy is right for you.
Although transfers of assets to a MAPT cause you to relinquish your ownership and control of them, the finality of the arrangement isn't as harsh as it sounds.
In creating a MAPT, you select a person (trustee) who manages the trust assets for your benefit. So, if you transfer investment accounts to the MAPT, you can still receive the income generated from these investments. If you transfer your home, you can still live there. In exchange for giving up control of your assets to a MAPT, your assets no longer count against you for Medicaid eligibility purposes.
Once your assets are in a MAPT and other criteria are met, Medicaid can’t seize them or ask you to spend them down to pay for your nursing home or long-term care costs. These assets also aren't subject to Medicaid’s estate recovery program.
As a result, your heirs can benefit from the assets without the interference of Medicaid or liens it could otherwise file against your estate after you pass.
A MAPT also functions as an estate planning tool. This is because you can designate who receives what remains of the trust upon your passing. The beneficiaries you choose will receive the assets per the terms of the trust agreement, and the chances of a probate court getting involved are diminished.
In addition, you may be able to retain what is called a “limited power of appointment.” This allows you to change who the beneficiaries of the MAPT will be, should your wishes or family circumstances change.
Even though you can designate a MAPT’s beneficiaries now, those beneficiaries don't have full access to the trust’s assets because of how it's structured. This also means their creditors don't have access to it. And, if your child is a beneficiary and is going through a messy divorce, neither does their spouse. You can also designate how bequests to beneficiaries can be used.
A properly drafted MAPT preserves the full capital gains tax exclusion on the primary residence (currently $250,000 per spouse). Later, when a person’s beneficiaries sell the home, it would be valued at the market price at the date of gifting and not at the original purchase price. This can avoid or significantly minimize the capital gains tax that your heirs may owe.
For a MAPT to function as intended, it needs to be created in advance to avoid the Medicaid lookback period. In most states, this is five years for nursing home or institutional care. In some states, there may also be a lookback period for community Medicaid care (home aides, local programs, etc.).
If less than five years have elapsed since you created your MAPT, you may still be responsible for some or all of your long-term care costs until sufficient time has passed.
Although assets in a MAPT may not be “countable” by Medicaid toward your resource limit, these assets may still generate income. If this income is payable to you, it may cause you to exceed the income limit permitted in your state.
If this happens to you, you may have other options, such as utilizing a pooled income trust, or may decide you will contribute partially toward your care.
A trust won't qualify as a MAPT if you retain control other than the limited power of appointment that may be permitted in your situation. You must accept that a person you select to act as trustee will manage the trust, distribute funds and income from the trust, and also be the effective owner of the assets.
In addition, creating a MAPT but not transferring assets to it is ineffective. You need to fully commit to the concept for it to benefit you.
Creating and implementing a MAPT is a complex legal task requiring many hours of work and expenditures made on your behalf. In addition, because MAPTs are tied to individual state and federal laws, the expertise of a qualified Medicaid attorney is essential.
You should expect that this expertise comes at the cost of several thousand dollars or more. However, your potential savings could be exponentially greater for you and your family. For this reason, the price is often well worth it.
It’s important to realize that while the MAPT strategy is designed to preserve assets and wealth, it assumes that a person will rely on Medicaid to pay for a portion of their care. However, Medicaid doesn't cover all facilities. For example, many assisted living facilities aren't licensed as assisted living programs and only accept private pay residents. Thus, relying on Medicaid could affect the choice and quality of care a person may receive.
The pros and cons discussed above are not exhaustive, and there may be other ones that apply to your situation. Investing in a MAPT is a highly fact-specific process, and MAPTs aren't suitable for everyone.
You should speak with us to discuss how a MAPT may affect other benefits you receive, your overall estate plan, its tax consequences, and whether it's right for you.
This article is a service of Sharek Law Office, LLC. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life and Legacy Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life and Legacy Planning Session and mention this article to find out how to get this $750 session at no charge. Please note this is educational content only and is not intended to act as legal advice.
Visit any critical care unit, childrens hospital, or other specialty inpatient facility, and youll find a common feature: therapy dogs. For decades, healthcare practitioners have understood the surprisingly positive effects on patients of time spend with cute and cuddly dogs. Therapy dogs reduce stress, improve mood, and can help patients reframe their outlook on whatever condition ails them. The positive effects of patient interactions with therapy dogs are a well-documented fact of the medical world. Senior citizens with limited mobility and other health conditions also benefit from the companionship of dogs. Owning a pet reduces feelings of loneliness among seniors living at home or in a retirement facility, which in turn greatly reduces the risk of diseases associated with loneliness and isolation. Pets can also decrease the number of stress hormones in a persons blood, lower blood pressure, and contribute to a more positive outlook on life. Dogs and other pets, it seems, have tremendous healing powers!Since Alzheimers patients cannot adequately care for a pet, owning one is out of the question. Considering the nature of Alzheimers dementia, it is easy to assume that a loved one may not benefit from a pet since they will not remember the interaction. Researchers, convinced therapy dogs would have a positive effect on Alzheimers patients, put this question to the test: Do Therapy Dogs Help Alzheimers Dementia Patients?Short-Term Benefits of Therapy Dogs for Patients with Alzheimers Dementia.A study conducted in the early 2000s looked carefully at the subject of therapy dogs and Alzheimers dementia patients. They measured the incidence of behavioral disturbances among patients in a nursing home for a period of four weeks, then introduced therapy dogs. Their initial findings showed that the dogs helped to reduce behavioral disturbances in the short term, meaning they helped to immediately calm patients. The short-term effects proved that therapy dogs do have a positive effect on patients with Alzheimers disease, particularly in regards to anxiety, anger, and changes in behavior associated with the disease.Long-Term Benefits of Therapy Dogs for Patients with Alzheimers Dementia.The same study did not stop at the short-term effects of therapy dogs on Alzheimers patients. Previous assumptions suggested that since patients would not remember their encounters with the therapy dogs, the effects of spending time with them would vanish from one day to the next. Not true, the study authors found. Although most of the patients did not remember their interactions with the therapy dogs (some did), the behavioral disturbances noted in the four weeks prior to the study reduced. In fact, the longer and more frequently patients interacted with the therapy dogs, the less they exhibited behavioral disturbances.Therapy Dogs As A Long-Term Therapy.The study findings confirmed what clinicians suspected all along: dogs are an excellent long-term therapy for persons with Alzheimers dementia to reduce the incidence of behavioral disturbances. Therapy dogs also had the same effect on Alzheimers patients as they do on other kinds of patients, including reduced stress and anxiety, lower blood pressure, better appetite, and fewer feelings of loneliness. These effects continued to increase the longer and more frequently patients interacted with the dogs.What Makes Dogs Such Good Therapy?Dogs are wired to give unconditional love and devotion. They can provide physical and social contact where it is missing, and they are not picky. what sets dogs apart, particularly those trained as therapy dogs, is that they will approach anyone regardless of their physical or mental deterioration, and initiate contact. Patients can pet, hug, and cuddle dogs unlike any other kind of pet. These positive interactions provide a distraction to the other goings-on around them and provide relief for those suffering from sadness, anger, or angst.The Takeaway.Dogs have a tremendous healing power. While studies have focused specifically on Alzheimers dementia patients, their positive effects will benefit anyone suffering from general dementia. Families of patients will feel relief that their loved ones have fewer outbursts of anger, sadness, or angst. While dementia impairs memory, it does not interrupt the long-term benefits of regularly interacting with a therapy dog. In fact, the more they interact with a therapy dog, the fewer behavioral problems they exhibit.
Loss and grief are inevitable parts of life, but for our beloved seniors, navigating through these emotions can be particularly challenging. As they journey through their golden years, they often face the loss of spouses, friends, siblings, and sometimes even their own health. In such times, compassionate support becomes of utmost importance. Here, we discuss how we can extend a caring hand to our seniors as they cope with loss and grief.First and foremost, it's crucial to understand that everyone experiences grief differently. Some may openly express their emotions, while others may prefer to grieve in solitude. As caregivers and loved ones, our role is not to impose how they should grieve but rather to create a safe space where they feel heard and supported.One of the most powerful ways to support seniors in their time of grief is through active listening. Sit with them, hold their hand, and let them share their memories, stories, and feelings. Even if they repeat themselves or express anger or sadness, offer them your undivided attention without judgment. Sometimes, all they need is someone to validate their emotions and reassure them that it's okay to feel the way they do.Encourage them to reminisce about the good times they shared with their loved ones. Sharing fond memories can be therapeutic and help seniors find solace amidst their grief. Look through old photo albums together, watch home videos, or simply engage in heartfelt conversations about the moments that brought them joy.It is important to respect boundaries and not force them to engage in activities they're not ready for. Grieving is a deeply personal journey, and pushing them too hard may only exacerbate their pain. Instead, let them take the lead and offer gentle encouragement along the way.Practical assistance can also alleviate some of the burdens they may be facing. Offer to help with daily tasks such as grocery shopping, meal preparation, or household chores. By easing their responsibilities, you may allow them the time and space to focus on their emotional well-being.In addition to providing emotional and practical support, connecting seniors with resources and support groups can be immensely beneficial. Many communities offer grief counseling services specifically tailored to seniors, providing them with a safe environment to share their experiences with others who understand what they're going through.Encourage them to participate in activities that bring them comfort and joy, whether it's joining a book club, attending religious services, or taking up a new hobby. Engaging in meaningful activities can provide seniors with a sense of purpose and fulfillment, helping them navigate through their grief more effectively.Above all, be patient and empathetic. Grieving is a process that takes time, and there is no set timeline for healing. Reassure them that you're there for them every step of the way, and remind them that it's okay to seek professional help if they're struggling to cope. Helping seniors deal with loss and grief requires patience, empathy, and a willingness to listen. By providing unwavering support and understanding we can help ease their burden as they navigate through life's inevitable challenges with grace and resilience.
It's a difficult decision to make, but sometimes it becomes clear that our older loved ones need more care than we can provide at home. If you're struggling with the decision of whether or not to place your parent or spouse in an assisted living facility, this blog post is for you. Here are some signs that it might be time to start considering assisted living.1. Are simple activities becoming difficult?Assisted living facilities are designed to help seniors with activities of daily living such as bathing, dressing, and grooming. If your loved one is struggling with any of these activities, it might be time to consider assisted living.2. Does your loved one have difficulty with living independently?Another sign that assisted living might be the best option is if your elderly loved one is having difficulty paying bills, getting around to run simple errands, or attending appointments. If getting from point A to point B has become a challenge, assisted living can help. Most facilities offer transportation services for their residents and have services on-site for a variety of needs. 3. Has there been a decline in your loved ones hygiene or appearance?Has your loved one started to neglect their personal hygiene? Are they no longer keeping up with their usual grooming routine? This could be a sign that they need assistance with activities like bathing and dressing.4. Are you noticing changes in mood or behavior?Sometimes changes in mood or behavior can be a sign of declining health. Has your usually cheerful loved one become withdrawn or depressed? Do they have sudden outbursts of anger? These changes could be indicative of a larger health issue that might be best addressed in an assisted living facility.Making the Decision TogetherOnce you have decided that assisted living is the best option, its important to involve your loved one in the decision-making process as much as possible. Let your Senior Care Authority advisor assess their care needs, explain the options, and schedule tours of places that best fit the needs of your family. Include your loved ones in the process as much as possible so they feel that they are part of the decision to choose the next place they will call home. If possible, try not to wait too long as adaptive skills can decrease with the progression of age or cognitive decline.Finding the best senior living setting for your loved one can be an overwhelming task, but you dont have to go through it alone. The experts at Senior Care Authority are here to help! We offer a variety of services designed to help seniors live their best life possible. Contact us today to learn more about how we can help you and your family.
Our Firm Prepares You for Life What makes our firm different is that we were built with the needs of growing families in mind. We understand you are BUSY, you are growing, you are planning for a life of prosperity and you value ease, convenience and efficiency. You are raising children, and caring for elderly parents, while also working hard to build your own nest egg for a lifetime of support. You want to know youve made the best decisions for your family and that your plan will work when your loved ones need it most. You want to make sure your minor children would be raised by the people you choose, and never by anyone you wouldnt want, and that your teens and adult children are properly prepared to care for you and what you leave behind. You want to feel confident that youve made the right choices, and handled everything so that you arent leaving behind a mess, when something happens. That is our focus as well. Weve developed unique systems to give you the same access to a Personal Family Lawyer as was previously only available to the super-wealthy, so you can have the guidance you need to build and maintain a life of prosperity and wealth. And, to keep your family out of court and out of conflict, which is the greatest risk to the people you love and all you have created, even if youve already worked with a traditional lawyer or created documents online. Our Team Is Here for You We encourage communication with our clients. In fact, weve thrown out the time clocks so you never have to be afraid to call with a quick question. Everything we do is billed on a flat-fee basis, agreed to in advance, so there are never any surprises. We have a whole team to serve you. When you call our office to ask your quick question, you wont have to wait hours or days for a phone call back. Youll get your question answered, right away. And, if you need to schedule a more in-depth legal or strategic call with your Personal Family Lawyer, a call will be scheduled when you're both available and ready for the call so we can make the very best use of your time and not waste your time by leaving voicemail after voicemail back and forth. And, we ensure the most important details of your planning are followed through on and your plan continues to work throughout your lifetime. We have a funding coordinator to ensure your assets are owned the right way throughout your lifetime and none of your assets will end up going through a long, expensive court process or being lost to the state because they were missed after your death. Weve created unique membership programs to keep your plan up to date year in and year out as well as give you access to our Trusted Team of Legal Experts for guidance on ANY legal or financial matter. One day you will need a lawyer. I dont know why and I dont know when, but when you do, you will be grateful you can call on us and well be here to advise you or get you out of a jam. We Help You Transfer Your Life and Legacy Lastly, we believe your financial wealth is only a small part of your overall Life and Legacy Planning which is made up of your far more valuable and most often lost upon incapacity or death intellectual, spiritual and human assets. These assets are what make you who you are, and sum up whats most important to you. And, a survey of inheritors has revealed that what they care about even more than inheriting your money, is inheriting these intangible assets. Most estate plans only focus on the transfer of your financial wealth to the next generation. Most people have such great intentions of passing on the intangible, but very few ever get around to it. Its just not a priority, until its too late. How much do you know about your grandparents values? Their most prized personal possessions? How they felt about you? What they had learned during their lifetime? If you are like most people, you know very little. Thats why we build the capture and passage of these most valuable assets into every estate plan we create. Not only will we help you pass on your money, but also your values, your insights, your stories and your experience the truly valuable assets your loved ones care about the most. Weve developed a tool that allows us to capture and pass on your whole family wealth, including your Intellectual, Spiritual and Human assets. I cant go into all of the details here, but well definitely talk about it when you come in for your Life and Legacy Planning Session.