What Are Medicaid Asset Protection Trusts?
Entrusted Legacy Law
For more information about the author, click to view their website: https://www.entrustedlegacy.law/
Jan 27, 2023
Pennsylvania - Greater Pittsburgh Area
Email US
Click to Email Us
Medicaid is a state- and federally funded health program for
lower-income persons of all ages. For applicants who fall into certain
categories, Medicaid imposes specific rules on how much income and resources
they can have and still qualify for benefits.
Each state has different rules for how much an applicant may
have in income and assets to qualify for Medicaid. To qualify for Medicaid, you
must fall under your state’s corresponding limit, which can be as low as $2,000
for an individual and $3,000 for a married couple.
These resource limits can also vary depending on whether a
person applies for institutional or nursing home care, community-based
services, or regular Medicaid.
If your assets are above the resource limit that would allow
you to qualify for Medicaid, you may be able to engage in planning that will
allow you to qualify for Medicaid. This planning often involves establishing a
Medicaid Asset Protection Trust (MAPT) or an equivalent planning device
permitted under your state’s laws.
When a MAPT or similar trust is properly drafted and
implemented, it can protect your assets from Medicaid while enabling you to
qualify for this benefit.
How Does a MAPT Work?
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.
A MAPT must be in writing and properly acknowledged. You
must also pick a trustee (not yourself) to manage the trust and its assets. The
trustee can be a family member whom you trust.
In addition, assets to be put in the MAPT actually need to
be transferred. In the case of real estate, you must transfer the deed to the
trust. Stocks and bonds must be registered in the name of the MAPT.
A MAPT must be created with sufficient time to avoid running
afoul of Medicaid lookback periods. When it comes to qualifying for Medicaid,
transfers to trusts are subject to a 60-month lookback period. That is why this
type of planning should be done before the need for Medicaid arises, preferably
as early as possible.
While you no longer own assets after they’re transferred to
a MAPT, and assets may not revert to you, you can still benefit from these
assets. For example, if you transfer your home to a MAPT, you may still be able
to live there.
In other situations, income generated from the trust
principal may be paid to you (although you cannot liquidate or withdraw the
principal). However, note that this income can be counted as available income
for purposes of Medicaid eligibility.
Can You Protect Your Home With a MAPT?
People frequently wish to use a MAPT to protect their homes
because it’s their biggest asset. Although Medicaid may not “count” your home
as an asset that falls within your resource limit, this doesn’t mean that your
home is safe from Medicaid.
For example, the home isn’t exempt from Medicaid’s estate
recovery program. Following a person’s death, Medicaid usually tries to recover
what it paid for their care by filing a lien against the person’s estate. This
often includes the family home. A proper planning strategy, which may include
using a MAPT, can avoid this scenario.
MAPTs also offer a certain degree of flexibility. For
example, if you need to downsize to a smaller home, the MAPT can sell the
house, receive the proceeds of the sale, and then purchase an apartment where
you may reside. The new property is still protected from Medicaid, and the
lookback doesn’t start over.
There are also some other features of MAPTs that lessen the
sting of “irrevocability.” You may retain the power to change the trustee or
beneficiaries of the trust.
Assets That Can Be Placed in a MAPT
Many types of property can be placed in a MAPT to help you
qualify for Medicaid. Examples include:
- Bank
accounts
- Stocks
and bonds
- Mutual
funds
- Brokerage
accounts
- Certificates
of deposit
- Real
estate (subject to some exceptions)
- Other
investments
However, there are some assets you cannot place in a MAPT.
For example, many retirement plans, IRAs, and other retirement resources cannot
be transferred to a trust. They would have to be liquidated first. In addition,
in some states, transferring your home into a MAPT may not protect it from
Medicaid.
The fees associated with preparing a MAPT can be costly,
ranging from a few to several thousand dollars. Every person’s situation is
unique, and you shouldn’t assume a MAPT is suitable for you without speaking
with a qualified elder attorney.
An elder law attorney in your area can consider how a MAPT may affect other benefits you receive, your overall estate plan, its tax consequences, and much more.
Other Articles You May Like
Why Arent More Older Adults Planning for Long-Term Care?
At Bellomo & Associates, one of the biggest surprises we see in families is just how unprepared many older adults are for the reality of long-term care. Its understandable. Most of us want to believe we wont need it, or that Medicare will take care of everything. But the truth is much more complicated. Research shows that about 1 in 7 adults over the age of 65 will eventually need help with daily activities like bathing, dressing, or eating. This kind of support is what we call long-term care. And yet, too many people underestimate their chances of needing it, or assume its something to worry about later. Unfortunately, waiting often leaves families caught off guard when a crisis hits. Common Misconceptions About Long-Term CareRecent surveys show just how unprepared many adults are:Less than half of adults over 50 believe theyll ever need long-term care.Only about one-quarter have named a potential caregiver or put a medical power of attorney in place.Just 11% have purchased long-term care insurance.Nearly two-thirds mistakenly believe that Medicare will pay for permanent nursing home care.That last one is especially concerning. Medicare was never designed to cover long-term custodial care. It may help with short-term skilled nursing care after a hospital stay, but it will not cover permanent nursing home costs. Medicaid, on the other hand, can cover these expensesbut only if you meet very strict income and asset requirements. Without careful planning, families often find themselves needing to spend down what theyve worked so hard to save to qualify. Why Early Planning MattersWaiting until a health crisis forces the issue leaves families scrambling emotionally, legally, and financially. Planning, on the other hand, gives you options and peace of mind. With the right strategies in place, you can:Protect your home and savings from being lost to care costsQualify for Medicaid without last-minute spend down stressPut the right powers of attorney in place so trusted loved ones can step in if neededHave open, guided conversations with your family about your wishes before a crisis occursHow We Can HelpWe understand how difficult it is to picture needing help with daily life after being independent for so long. Thats why we approach long-term care planning with compassion, honesty, and realistic solutions. Whether its reviewing your options for Medicaid eligibility, setting up powers of attorney, or exploring long-term care insurance, well walk beside you every step of the way. Long-term care planning is one of those things that feels easy to put offuntil its too late. The earlier you prepare, the more control youll have over your care, your finances, and your familys future.
The Psychology of Investing
Fear and greed are hard to overcome. Why do we let these emotions control our decision-making process when it comes to our financial well-being? Do we fear that when there is a market correction it is a sign of impending global doom? As a part of our emotional make-up, we have a tendency to linearly extrapolate. When things are going bad, they will only get worse, and when things are going well, they will only get better. We know that our past experiences tell us neither scenario is true, but we continue to fall into the same trap time and time again.At some point we have to come to the realization that market movements are part of the investment process, and the only way to prosper long-term is to eliminate the emotions that will make us buy high and sell low. The way to control emotions is to have a disciplined approach. Discipline puts us in control, not our emotions.Controlling our emotions helps us in all facets of life, and is a key element in understanding the Psychology of Investing. Investment decisions are similar to decisions regarding friends and family. Dont try to resolve an issue when emotional, BE DISCIPLINED. The Psychology of Investing is nothing more than an understanding of the emotions that influence our decisions. Buying high and selling low is not the inverse of buying low and selling high, but is an actualization of our emotions. Be disciplined in your decision making. Use fact and reason to the best of your ability and endeavor to understand, and by understanding, control your emotions. The Psychology of Investing is the first chapter in a book titled The Ten Commandments of Investing, a book that offers a unique perspective on investing by Al Weber, Senior Vice President at Raymond James. It is available in electronic format, at no charge, by requesting it at Katie.Burr@RaymondJames.com. Editors Note: This article was submitted by Erin Weber, CFP. Erin is a Financial Advisor with the Weber Group of Raymond James. She may be reached at 878.208.1285 or Erin.Weber@RaymondJames.com.Raymond James & Associates, Inc., member New York Stock Exchange/SIPC800 Cranberry Woods Drive, Suite 200, Cranberry Township, PA 16066Any opinions are those of Erin Weber and not necessarily those of Raymond James. This material is intended for informational purposes only. It is not a substitute for professional medical advice, diagnosis, or treatment. See ad on page 112.
How to Choose the Right Primary Care Doctor
The search for the right primary care doctor can feel overwhelming. Many patients express frustration with long wait times, short visits, and difficulty accessing their physician when they need them most. In todays fast-paced healthcare environment, finding a doctor who prioritizes patient care is more important than ever. One emerging alternative is Direct Primary Care (DPC), a model that shifts the focus back to the patient by eliminating insurance hassles. Instead of dealing with copays and billing, patients pay a flat monthly fee for direct access to their doctor, longer appointment times, and a more personalized healthcare experience. Availability and Access How long will it take to get your first appointment? Some traditional practices have months-long waits. In contrast, DPC providers typically offer initial visits within a week, ensuring you receive care when you need it. Office Experience Time spent in the waiting room can be a major frustration. In conventional practices, patients may wait an hour or more before seeing the doctor. DPC practices prioritize efficiency, often reducing wait times to just minutes. Time With Your Doctor Short, rushed appointments can leave patients feeling unheard. In many traditional offices, physicians are booked in 15- to 20-minute intervals, limiting discussion time. DPC physicians often schedule longer visits sometimes up to an hourallowing for in-depth conversations, thorough exams, and more thoughtful treatment plans. Communication and Follow-Up Reaching your doctor can be a challenge. Many patients endure long hold times or leave messages that go unanswered. In the DPC model, direct communication is key. Patients often have access via phone, email, or text for prompt, personalized care. Urgent Needs Medical concerns dont always arise during business hours. Traditional practices may not offer same-day visits, pushing patients toward urgent care or ERs. DPC providers aim to accommodate same- or next-day appointments, reducing unnecessary trips and ensuring continuity of care. Choosing a primary care doctor is personal. Look for a physician who is experienced, accessible, compassionate, and committed to your well-being. Asking the right questionsand exploring models like DPCcan lead to a more satisfying healthcare experience. Editors Note: This article was written by Dr. Rebecca L. Byard, Family Medicine Doctor with Direct Care Physicians of Pittsburgh. She can be reached at 412-892-9170 or visit their website at wwwdirectcarepgh.com. See ad on pages 2-3.
Local Services By This Author
Entrusted Legacy Law
Special Needs Trusts 100 Pinewood Lane Suite #303, Warrendale, Pennsylvania, 15086Comprehensive Special Needs Estate Planning & Special Needs Trusts in PennsylvaniaEstate planning for families with special needs children presents a unique set of financial, legal, and healthcare challenges that require the expertise of a special needs planning attorney. Not all estate planning lawyers understand the intricacies involved, but the experienced special needs estate planning attorneys at Entrusted Legacy Law are dedicated to ensuring your child with special needs is fully protected when you are no longer able to serve as their primary caregiver.We provide a full range of estate planning services tailored to families with special needs children in Pennsylvania. Our goal is to help you preserve assets for your childs future care while ensuring they remain eligible for essential government benefits like Medicaid and Supplemental Security Income (SSI). We assist in setting up special needs trusts (SNTs) to safeguard financial resources, appointing legal guardians and trustees, and identifying long-term care options to ensure your child receives the best possible support and housing solutions.Special Needs Trusts & Asset ProtectionOne of the most significant challenges in special needs financial planning is ensuring that your child has adequate resources without jeopardizing their eligibility for public assistance programs. Many families unknowingly risk disqualifying their child from essential benefits by leaving them a direct financial inheritance. Instead, the best strategy is to establish a special needs trust to provide financial security while preserving their access to Medicaid, SSI, and other government assistance programs.A properly structured special needs trust allows funds to be used for supplemental expensessuch as medical care, therapy, education, and personal carewithout affecting eligibility for disability benefits. However, the regulations governing these trusts are complex. Funds must be managed by a designated trustee and cannot be distributed directly to the beneficiary, as this could trigger disqualification from public benefits. Additionally, a child's needs evolve over time, making it critical to have a trust that can adapt to changing circumstances and legal requirements.By working with an experienced Pennsylvania special needs attorney, you can ensure that your childs special needs trust is legally sound, structured correctly, and customized to their specific requirements.Special Needs Planning for Families in PennsylvaniaAt Entrusted Legacy Law, we specialize in estate planning for children with disabilities, including Down syndrome, autism, cerebral palsy, and other developmental or intellectual disabilities. Our firm helps families create a comprehensive life care plan that provides financial security while safeguarding access to government benefits and essential support services.Whether you need help establishing a special needs trust, securing a legal guardian, or planning for long-term care and housing, our Pennsylvania special needs planning attorneys are here to guide you through every step of the process.Contact Entrusted Legacy Law today to start creating a sustainable, secure future for your child with special needs.
Entrusted Legacy Law
Elder Law 100 Pinewood Lane Suite #303, Warrendale, Pennsylvania, 15086Our 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.
Entrusted Legacy Law
Probate 100 Pinewood Lane Suite #303, Warrendale, Pennsylvania, 15086Pennsylvania Probate: What You Need to Know After the Passing of a Loved OneIf you are here to learn about Pennsylvania probate laws after the passing of a loved one, we first want to extend our sincere condolences. We understand that this is a difficult time, and we hope the information on this page provides clarity and helps minimize the legal and administrative challenges you may otherwise face.What Is Probate in Pennsylvania?Probate in Pennsylvania is a court-supervised legal process that ensures the transfer of assets from a deceased individual to their rightful heirs or beneficiaries. This process is essential for: Proving the validity of a will Appointing an executor (if there is a will) or an administrator (if there is no will) Inventorying and appraising estate property Paying outstanding debts, estate taxes, and creditors Distributing assets as directed by the willor by Pennsylvania intestacy laws if no will existsIn Pennsylvania, if a deceased person owned real estate or assets solely in their name, their estate must go through probate before assets can be legally distributed.The Downsides of Pennsylvania Probateand What You Can Do NextMany residents in Allegheny County, Butler County, Beaver County, Washington County, and Westmoreland County have heard that probate is a lengthy, expensive, and public process. Unfortunately, this is truewithout proper estate planning, probate can be costly and time-consuming.The best way to avoid probate in Pennsylvania is to plan ahead using strategies such as revocable living trusts, beneficiary designations, and joint ownership structures. However, if you are already in a position where probate is required, the best thing you can do is educate yourself and seek experienced probate legal assistance to complete the process as efficiently and cost-effectively as possible.How Is a Probate Case Started in Pennsylvania?Probate can be initiated by any beneficiary or creditor, but most often, the process begins when the Executor named in the will files the original will and a petition with the Pennsylvania probate court.If there is no will, a close relative of the deceased (such as a spouse, child, or sibling) typically files the petition to become the Administrator of the Estate.Choosing the Executor for a Pennsylvania EstateIf a valid will exists, the individual named as Executor will handle the probate processif they are eligible and willingIf no Executor is available or no will exists, any interested party (such as a family member) can petition the Pennsylvania Orphans' Court to be appointed as the Administrator of the Estate.Executor Compensation in PennsylvaniaUnder Pennsylvania probate law, Executors and Administrators receive compensation based on a percentage of the total probate estate value. This is designed to fairly compensate them for their time and effort in managing estate matters.However, Executors can be held personally liable for any mistakes made during the process. Given the complexity of Pennsylvania probate rules, its critical to work with a skilled probate attorney to avoid legal pitfalls.Do You Need to Go Through Probate If a Trust Exists?In most cases, no. If the deceaseds assets were properly titled in the name of a trust, probate is not required. Instead, the successor trustee will work with an estate planning lawyer to administer the trust and distribute assets.However, many families are surprised to learn that simply having a trust does not guarantee that probate will be avoided. Common mistakes include: The trust was not updated over time to reflect new assets. The decedents assets were never properly transferred into the trust.To ensure your estate plan works as intended, its important to work with an estate planning attorney who provides ongoing trust maintenance and reviews.Which Assets Are Subject to Probate in Pennsylvania?Assets that must go through probate include: Real estate, bank accounts, or investments owned solely in the deceaseds name Personal property and valuable assets without a beneficiary designationAssets that bypass probate include: Jointly owned property with Right of Survivorship Bank accounts or investment accounts with Transfer on Death (TOD) or Payable on Death (POD) designations Life insurance policies and retirement accounts with named beneficiariesHowever, some assets that normally bypass probate can still become subject to the process under certain circumstances. Consult with a Pennsylvania probate attorney to determine if probate applies to your specific situation.How Pennsylvania Intestacy Laws Distribute an Estate When There Is No WillIf no valid will exists, Pennsylvania intestacy laws dictate how the estate will be distributed:1 Spouse (If married, a portion or all of the estate goes to the spouse)2 Children (If the deceased had children, they inherit next)3 Parents (If there are no children, parents inherit)4 Siblings (If no spouse, children, or parents, siblings inherit)This highlights the importance of estate planningwithout a will or trust, the state determines who receives your assets.How Long Does Pennsylvania Probate Take?The timeline for Pennsylvania probate varies depending on the estates complexity. On average: Minimum of 12 months for simple cases Up to 2+ years for complex estates, disputes, or tax-related mattersWhat Are the Costs of Probate in Pennsylvania?Probate costs in Pennsylvania include: Attorneys fees (Based on estate size and complexity) Court filing fees Executor fees (set by Pennsylvania law) Appraisal and valuation fees Publication and administrative costsIn more complex estates, additional fees may apply, increasing probate expenses and delays.How to Choose the Right Pennsylvania Probate AttorneySelecting the right probate lawyer in Pennsylvania is crucial. Many general practice lawyers dabble in probate law, but only experienced probate attorneys have the knowledge to navigate complex estate matters efficiently. You do NOT have to use the attorney who prepared the will. You have the right to choose a specialized probate lawyer who understands the nuances of Pennsylvania estate law and can expedite the process. Avoid costly mistakes. Working with an experienced probate attorney prevents errors that could increase costs, cause delays, or result in legal disputes.Contact Entrusted Legacy Law for a Complimentary Pennsylvania Probate ConsultationIf youre ready to begin the probate process in Pennsylvania, our Allegheny County and Butler County probate attorneys are here to guide you.Call us at 412-347-1731 to schedule a complimentary 15-minute consultation to determine your next best steps.During your consultation, we will: Answer your probate-related questions Provide guidance on estate administration Help you navigate the Pennsylvania probate process efficientlyWe are here to relieve the legal and administrative burden during this difficult time and ensure that your loved ones estate is handled with care.