Medicaid asset protection trust (MAPT)

You transfer assets — typically a home or investments — into an irrevocable trust with an independent trustee. You no longer own them, so after the look-back period they are not counted in a Medicaid eligibility assessment.

You can usually keep the right to live in the home and to receive trust income, but not the right to reach the principal. That is the trade you are making.

Because of that, a MAPT only works as advance planning. Once a nursing home admission is imminent, other tools — spousal allowances, annuities, caregiver agreements — are usually more realistic.

• Protects: the home's equity, investment accounts and cash transferred five or more years ago

• Preserves: the step-up in cost basis if drafted with a retained life estate

• Does not protect: retirement accounts, which are normally kept outside the trust for tax reasons

• Does not allow: taking principal back — the trust is irrevocable by design

What is a Medicaid asset protection trust?

An irrevocable trust holding assets so they do not count toward Medicaid's asset limit for long-term care, provided the transfer took place at least five years before the application.

What is the five-year look-back period?

Medicaid examines asset transfers in the 60 months before an application. Gifts inside that window trigger a penalty period during which Medicaid will not pay for care.

Can I be the trustee of my own MAPT?

How much does a MAPT cost to set up?

Elder law attorneys typically charge $4,000–$10,000 to draft and fund one, which is small against the cost of a year of nursing home care.

Is a MAPT better than long-term care insurance?

They solve the problem differently. Insurance pays for care and keeps assets accessible; a MAPT protects specific assets but locks them away.