How does Medicaid Asset Protection Trust Work?

How Does a Medicaid Asset Protection Trust Work in Buffalo

If you are familiar with Medicaid, I assume that you understand its rules and eligibility requirements. Like many government-funded program out there, Medicaid is designed for specific groups of people. And of course, these groups of people are mainly those who cannot afford the expensive cost of private health care.

To be eligible for Medicaid, your assets and income must be below a certain limit. If it’s above, you won’t be allowed to enjoy the benefits that comes with this program. However, thanks to Medicaid Asset Protection Trust, a unique type of trust designed to protect assets from being counted by Medicaid, individuals with assets and income above the threshold may be allowed to enjoy the benefits that comes with this program.

In this article, we’ll be looking at what Medicaid is, and how the Medicaid Asset Protection Trust Work.

What is Medicaid?

Medicaid is a health care insurance programs jointly funded by the state and federal government. Applying for Medicaid is a good way to get health care at a reduced cost or sometimes at zero cost. Medicaid is not for everyone. Its eligibility covers children, pregnant women, seniors, and individuals with disabilities and eligible low-income adults.

Medicaid health plans are for things like:

  • Hospital stays
  • Doctor visits
  • Pregnancy care
  • Shots for children
  • Tests and x-rays

Though the federal government dictates the main rules regarding Medicaid, each state has the freedom to implement new rules and run the program for the best interest of its citizens. Your state may even have a different name for its Medicaid program. If you wish to know more about how this program works, it is important that you contact a competent elder law attorney or Medicaid attorney.

Medicaid Eligibility

As I mentioned earlier, Medicaid is not for everyone. If this program was for the entire U.S. population, the U.S. treasury may eventually become depleted. To prevent that and ensure that only the right people benefit from this program, the federal government created and dished eligibility requirements for this health care program.

You are deemed ineligible for Medicaid if your assets and income is above a certain threshold. On the other hand, Medicaid will accept you with open arms if your income and assets is below the threshold which differs per state. This is done to ensure that only those who cannot afford private health care benefit from the program.

However, there is a little way around this rule. Individuals who have assets and income above the threshold can be eligible for Medicaid if they protect their assets. How do they do this? By simply setting up a Medicaid asset protection trust and placing their assets into the trust.

What is Medicaid Asset Protection Trust?

Put simply, a Medicaid asset protection trust separates you from your assets. It helps you avoid the need to cut down your assets and always leaves you financially buoyant. In addition, this unique type of trust gives you a legitimate way of safeguarding your assets from being used to settle your nursing care costs. Worthy of note that, it is considered illegal to defraud Medicaid and lie about your assets.

The primary reason most Americans fail to create a Medicaid asset protection trust is they don’t believe that they will need any form of long-term care. For the seniors, however, it would be wise to consider contacting a Medicaid attorney and setting up a Medicaid asset protection trust. Based on stats, 40% of Americans over 65 years of age end up in nursing homes. Thus, as a senior or one approaching 65, it is important that you think about setting up this trust especially if your asset is above the threshold.

How Does Medicaid Asset Protection Trust Work?

A MAPT helps individuals plan for the future needs for Medicaid eligibility while protecting their assets. This trust, which is an important estate planning tool, works in a simple way. It allows a Medicaid applicant to transfer the ownership of countable assets into the name of the trust to become exempt assets. A MAPT must be an irrevocable trust, meaning the terms of the trust cannot be changed, altered, or modified by the grantor.

Do you need an Elder law attorney?

If you need an elder law attorney for matters regarding your elderly loved one, don’t hesitate to call our office. Or if you are a senior and you need help with applying for Medicaid, you can also contact us for assistance. In addition, in the event that your assets and income are above the threshold, signaling your ineligibility for Medicaid, you can contact us if you wish to set up a Medicaid Asset protection Trust. However, you must have the Medicaid look back period in mind.


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