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Advantages And Disadvantages To A Medicaid Asset Protection Trust


One of the most critical decisions made during the estate planning process for older adults is incorporating Medicaid planning. There are several estate planning tools that may be applicable to your situation. Figuring out which works the best and can offer the most protection to your wealth and assets while also allowing you to receive Medicaid is not always a cut-and-dry process.

It is best that if you would like to structure your estate plan to include Medicaid planning you work with an attorney knowledgeable about the Medicaid system and who knows what is necessary to qualify for the benefits. Considering how expensive long-term care is, getting the Medicaid benefit can make a big impact on your ability to secure the services and care you need in older age.

For more assistance with estate planning and Medicaid planning strategies, The Villages Medicaid planning attorneys at Millhorn Elder Law Planning Group can help.

What Are the Pros and Cons of a Medicaid Asset Protection Trust?

If your assets supersede the limit set by Medicaid, then a Medicaid Asset Protection Trust may be the right approach to this dilemma. The trust essentially takes ownership of the assets which as a result, allows you to meet those limits and be eligible for benefits.

There are several advantages of using a Medicaid Asset Protection Trust for those that choose this option. The most important being the trust preserves your wealth instead of putting you in a situation where you have to spend what you have to reduce it and then be eligible. This means that your beloved beneficiaries will be able to obtain more of their inheritance and that Medicaid will not be able to collect from the trust for reimbursement after you pass on.

The disadvantage is that if not created early on, a MAPT may not provide the ultimate amount of asset protection and even result in ineligibility for Medicaid benefits for some time. Specifically, most states, including the state of Florida, have a 5 year lookback period that Medicaid uses to determine if someone was trying to take advantage of selling their property or gifting it to make their income and wealth meet the requirements Medicaid sets forth for eligibility.

Therefore, if you are estate planning and may think you could need long-term care, but not for at least five years or more, then a MAPT may work. It is important to remember that the creation of this type of trust is not cheap. Due to the cost of a MAPT, one should only truly be considered if the assets that are being protected have a high-dollar value like a home, for instance.

Speak to a Villages, Florida Medicaid Planning Attorney Today

In some instances, a MAPT is the right choice that offers the most robust protections for assets. In other situations, a MAPT either will not work for Medicaid planning purposes or the assets that would be put into it are not worth enough to justify the cost of creating the trust.

For help with Medicaid planning and other long-term care preparations, the Florida long-term care planning attorneys at Millhorn Elder Law Planning Group can be reached at 800-743-9732 to schedule a free consultation.



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