Speak to a Medicaid Planning Lawyer Now: (513) 721-3330
A Medicaid Asset Protection Trust (MAPT) is how many people qualify for Medicaid long-term care benefits while preserving their assets—and setting one up can be surprisingly affordable.
Planning for long-term care can be overwhelming—especially when it comes to protecting the assets you’ve built over a lifetime. For many families, the fear of losing savings or a family home to nursing home costs is a real concern; this is where Medicaid Asset Protection Trusts (MAPTs) come into play. Whether you’re looking to protect your home, savings, or other valuable assets, understanding MAPTs can empower you to budget for your own long-term care costs without sacrificing your assets or the well-being of your family.
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“How much does a Medicaid asset protection trust cost?”
At RKPT, the cost to set up a Medicaid Asset Protection Trust (MAPT) can range from $3,500 to $10,000. The type of assets transferred into the trust can affect the price, as can the need for crisis planning. If you own a business or several properties, the price may be a bit higher.
While the upfront cost may seem substantial, establishing a MAPT can result in thousands of dollars in long-term savings for you and your family. The average cost of nursing home care is well over $100,000 per year; unprotected assets can easily be depleted through this significant expense. Most MAPT plans will cost less than one month in a long-term care facility, so if you qualify for benefits that pay for your care for one month, you have made a good investment.
Before anyone pays for Medicaid asset protection trusts (MAPTs), they should consult with an experienced Medicaid planning attorney to ensure compliance with Ohio state law. Our Medicaid planning attorneys are here to help you understand your options and make the best decision for you and your family.
Speak to a Medicaid Planning Attorney to learn more about MAPTs: (513) 721-3330.
Understanding Medicaid Asset Protection Trusts (MAPTs)
A Medicaid Asset Protection Trust is a financial tool that allows people to become eligible for Medicaid. By transferring assets into a MAPT, you can meet the asset limits for Medicaid benefits without the need to “spend down” your estate, all while ensuring that your surviving spouse and/or beneficiaries—generally children or other relatives—are protected from the Medicaid spend-down and Medicaid estate recovery after your passing.
If you already have a trust, make sure it is the right type of trust; revocable trusts do not protect assets in this sense. Unlike revocable living trusts, which do not shield assets from Medicaid, MAPTs are a type of irrevocable trust, meaning they add a layer of control between the grantor (person setting up the trust) and the asset. Even though the trust is irrevocable, the grantor can pull the strings to ensure the trustee does what they want them to, and fire/disinherit the trustee if they do not comply. The grantor can also reserve certain powers to make changes to the trust in the future. Trustees are most often adult children of the grantors.
Assets in a MAPT are typically not subject to probate and may be protected from Medicaid estate recovery after the grantor’s death. MAPTs also have important tax implications; properly drafted MAPTs preserve capital gains tax exclusions on a primary residence and may offer other tax advantages. Further, after the grantor passes, the beneficiaries receive a basis step-up; which would not be the case if the grantor had just given the asset to their kids during their life.
However, creating a Medicaid asset protection trust requires a robust legal understanding of the costs and benefits associated with this financial tool. MAPTs are most beneficial when the grantor can stay healthy and avoid the need for long-term care for five years after funding the trust. Even if you or a loved one needs care now, an MAPT can be a helpful tool to qualify for Medicaid much quicker than five years, and immediately in some cases.
If you are concerned with your spouse not being able to afford his or her lifestyle after your passing due to long-term care costs that drain your savings, then an MAPT may be a great tool for you. Further, Medicaid does not pay for everything. Hearing aids, clothes, vacations, electronics, hair care and other non-essential expenses are not covered by Medicaid. Assets held in an MAPT can be used to supplement a person’s expenses once that person is on Medicaid but still wishes to maintain a lifestyle that includes non-essential expenses.
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MAPTs: Understanding the Terminology of Asset Protection Planning
- Irrevocable: A MAPT is a kind of irrevocable trust. Despite the name, the grantor can still make certain changes and can fire the trustee if desired. The assets placed in the trust are no longer directly controlled by the grantor; rather, a trusted third-party trustee has the direct control, and the grantors can still give the trustee direction to handle assets as they suggest.
- Asset Protection: Assets transferred into a MAPT are shielded from being counted toward Medicaid’s strict asset limits. This allows individuals to qualify for Medicaid without having to "spend down" their savings or property.
- Grantor: The person who creates the MAPT and transfers assets into it. This is also the person requiring long-term care.
- Trustee: The person who manages the trust assets and must be someone other than the grantor or their spouse-often an adult child or other trusted individual.
- Medicaid asset protection trust
- Lifetime Beneficiaries: a list of persons that can be called upon to access trust assets if needed.
- Remainder Beneficiary: The person who receives the benefit of the trust after the grantor passes away. The grantor cannot be the beneficiary if the assets are to be exempt from Medicaid consideration.
- Look-Back Period: Medicaid has a five-year “look-back” period. Transfers to a Medicaid asset protection trust made within five years of applying for Medicaid can result in penalties or delayed eligibility. Therefore, Medicaid asset protection trusts are most effective when established well in advance of anticipated need.
- Type of Assets: Common assets placed in a Medicaid asset protection trust include excess cash, investment accounts, real estate (including the primary residence in some cases), and other countable resources. Some assets, like retirement accounts, may pose special challenges and require careful planning.
Helpful Links: Medicaid Eligibility Policy
Frequently Asked Questions about MAPTs
Can MAPTs be changed?
In Ohio, a Medicaid Asset Protection Trust (MAPT) is generally designed to be irrevocable. However, don’t let that word intimidate you. Ohio law provides a pathway for revoking or terminating such a trust under specific circumstances.
The most common method is through a limited power of appointment. This allows the grantor to change the beneficiaries—as long as they were contemplated when originally executing the trust.
Another option is with the consent of all beneficiaries and court approval. Under Ohio Revised Code § 5804.11, if all beneficiaries agree and the court finds continuing the trust is not necessary, the court may approve a termination.
This process typically requires a Medicaid asset protection attorney, especially when minors or multiple beneficiaries are involved. If the trust is revoked within Medicaid’s five-year look-back period, the assets could trigger penalties or ineligibility for benefits.
How do I protect my assets while remaining eligible for Medicaid?
You must plan carefully due to Medicaid’s strict income and asset limits. Typically, you can’t have more than $2,000 in countable assets.
One of the most effective strategies is to use a Medicaid Asset Protection Trust (MAPT), which removes assets from your ownership for eligibility purposes—if established outside the five-year look-back window.
Other tools include a Qualified Income Trust (Miller Trust), spend-down strategies, and for married couples, the Community Spouse Resource Allowance. Because Medicaid is complex and varies by state, consult an experienced Medicaid planning attorney to comply with all requirements.
When should I implement Medicaid asset protection strategies?
Ideally, at least five years before applying for Medicaid. This avoids penalties triggered by the five-year “look-back” period. Waiting until a health crisis arises can severely limit your options and put assets at risk.
By establishing a MAPT early—while healthy—you retain more control, preserve assets for heirs, and avoid Medicaid estate recovery. Planning in your 50s or early 60s is often ideal.
Since Medicaid rules can change with different administrations, planning now helps you get “grandfathered in” under current laws.
How do I protect my parents’ assets from a nursing home?
To shield your parents’ assets, consider transferring them to a Medicaid Asset Protection Trust (MAPT) at least five years before applying for Medicaid.
Other tools include long-term care insurance and life estate transfers. Watch out for the look-back period and penalties for recent transfers.
This process requires strategic planning and legal guidance. Consult RKPT’s estate planning attorneys to protect your family’s assets and comply with Ohio Medicaid rules.
Does an irrevocable trust protect assets from Medicaid?
Yes. A properly structured irrevocable trust (like a MAPT) shields assets from being counted toward Medicaid eligibility. Once transferred, the grantor gives up control and the assets are no longer considered available resources.
To avoid penalties, transfers must occur more than five years before applying for Medicaid. Early planning is essential.
Do you pay capital gains when you sell a residence in a trust?
No, not if it’s your primary residence and the trust qualifies as a grantor trust. The capital gains exemption passes through to the grantor.
However, for non-primary residences, capital gains apply as they would for any property you own. Always consult an estate planning attorney to avoid mistakes and unnecessary tax exposure.
How likely is it that Medicaid can find hidden asset values?
Very likely. Medicaid now uses electronic asset verification systems (AVS) to cross-check data with banks and financial institutions.
During the five-year look-back, Medicaid reviews financial records for undisclosed assets and suspicious transfers. Attempting to hide assets can result in denial of benefits, penalties, or even fraud investigations.
The safest path is legal Medicaid planning with an experienced attorney.
