What Assets Belong in a Medicaid Asset Protection Trust?

If you are looking to qualify for Medicaid to receive help in paying for nursing home care, you may need to establish a Medicaid Asset Protection Trust (MAPT). A MAPT is an irrevocable trust that protects your assets from being counted against you when applying for Medicaid. When properly structured, MAPT assets will also not be subject to probate.

Distinguishing Between Countable and Non-Countable Assets

In the case of a single (unmarried person) who requires long-term institutional care, Medicaid limits an applicant’s total assets to just $2,000. Obviously, even a small checking or savings account can easily put someone over that limit. At the same time, not every asset a person owns is necessarily “countable” towards that $2,000 limit.

Some assets are considered “non-countable.” This includes your primary residence–assuming you or your spouse will continue to live in the house–and one motor vehicle. Most of your personal property, such as household furniture and clothing, is also non-countable, as are any pre-paid funeral or burial expenses.

Anything that is, or might be considered, a countable asset is something that you should strongly consider placing in a MAPT. Some common examples of countable assets in Washington include:

• excess checking or savings accounts
• certificates of deposit;
• stocks, bonds, and other securities;
• primary residence;
• vacation homes;
• rental properties; and
• motor vehicles (if you own more than one).

Additionally, Washington considers retirement accounts, such as a 401(k) or an IRA, to be a countable asset. This can pose special challenges when it comes to a MAPT, however, because transferring those assets into a trust will be treated as a “withdrawal” for federal income tax purposes. This is one reason you should always work with a qualified Spokane asset protection lawyer when setting up a MAPT or any other estate planning trust.

Can I Still Access My Property in a MAPT?

By transferring assets into a MAPT, you do relinquish legal ownership to the trustee. And unlike a revocable trust, you cannot serve as your own trustee in a MAPT. Nor can you revoke the MAPT after it is executed, but when structured properly, you may have limited amendment authority.

Under Washington Medicaid law, you cannot benefit from a MAPT. This includes the receipt of income or return of principal. If your MAPT owns the home you live in, you make lease the home by paying the property taxes, insurance, maintenance, and upkeep on the property

Again, it must be emphasized that a Medicaid Asset Protection Trust is a complex legal document that carries a number of implications, not just for your Medicaid eligibility but also your family’s long-term financial security. It also requires a lot of confidence in your Trustee and to be established with great care and skill. So it is essential that you consult with an experienced Spokane Medicaid Asset Protection Trusts lawyer before taking any final action. Contact Moulton Law Services, P.S., today to schedule a free consultation. We serve clients throughout the Spokane Valley, Kennewick, and Yakima area.