Medicaid Asset Protection Trust (MAPT)

Medicaid Asset Protection Trust (MAPT)

Purpose

This template provides a framework for establishing a Medicaid Asset Protection Trust (MAPT), an irrevocable trust designed to protect assets from being counted toward Medicaid's asset limit while preserving them for beneficiaries.

Important Disclaimers

THIS IS A COMPLEX LEGAL DOCUMENT THAT REQUIRES ATTORNEY PREPARATION

• Medicaid rules vary significantly by state
• The five-year look-back period applies in most states (60 months)
• California is eliminating its look-back period by July 2026
• Improper trust creation can result in Medicaid ineligibility penalties
• This template is for educational purposes only

Pre-Planning Assessment Checklist

Client Eligibility Evaluation

☐ Client is planning at least 5 years before anticipated need for long-term care
☐ Client understands assets transferred to MAPT cannot be retrieved
☐ Client has sufficient non-trust assets for current living expenses
☐ Client has reviewed state-specific Medicaid rules
☐ Client understands income from trust assets may affect Medicaid eligibility

Current Financial Assessment

Asset Inventory

Assets NOT Suitable for MAPT Transfer

☐ Retirement accounts (401(k), IRA) - Cannot transfer ownership to trust
☐ Qualified pension plans
☐ Assets needed for current living expenses
☐ Assets with significant tax implications upon transfer

2026 Medicaid Eligibility Limits

Asset Limits (Most States)

Income Limits

Home Equity Limits

Note: Some states have different limits (e.g., NY: $33,038; CA: $130,000; IL: $17,500)

MAPT Essential Requirements

Irrevocability Requirement

☐ Trust must be irrevocable once executed
☐ Grantor cannot modify, amend, or revoke the trust
☐ Grantor cannot serve as trustee
☐ Grantor's spouse cannot serve as trustee
☐ Terms clearly state irrevocability

Five-Year Look-Back Period Compliance

☐ Trust established at least 60 months before Medicaid application
☐ All asset transfers documented with dates
☐ Look-back period calculation documented:

Look-Back Calculation

Trust Document Framework

Article I: Trust Identification

Trust Name: _____________________________________________

Date of Creation: _________________________________________

State of Governing Law: ___________________________________

Grantor(s):

• Name: ________________________________________________
• Address: ______________________________________________
• Date of Birth: _________________________________________
• Social Security Number: _________________________________

Article II: Trustee Designation

Initial Trustee:

• Name: ________________________________________________
• Address: ______________________________________________
• Phone: _______________________________________________
• Relationship to Grantor: _________________________________

☐ Trustee is NOT the Grantor
☐ Trustee is NOT the Grantor's spouse
☐ Trustee has no conflict of interest

Successor Trustee(s):

1. Name: _______________________________________________
2. Name: _______________________________________________

Article III: Beneficiary Designations

Income Beneficiary (During Grantor's Lifetime):
☐ Grantor may receive income distributions
☐ Principal is NOT accessible to Grantor

Remainder Beneficiaries (After Grantor's Death):

Article IV: Trust Property

Initial Trust Property:

Article V: Distribution Provisions

Permitted Distributions to Grantor:
☐ Income only (interest, dividends, rent)
☐ No principal distributions to Grantor
☐ Distributions at Trustee's discretion

Distributions to Other Beneficiaries:
☐ For health, education, maintenance, and support (HEMS standard)
☐ At Trustee's absolute discretion
☐ Other: _______________________________________________

Article VI: Trustee Powers

The Trustee shall have the following powers:

☐ Power to sell, lease, or exchange trust property
☐ Power to invest and reinvest trust assets
☐ Power to collect income and pay expenses
☐ Power to employ professionals (attorneys, accountants)
☐ Power to make distributions per trust terms
☐ Power to file tax returns for the trust
☐ Power to maintain insurance on trust property

Article VII: Spendthrift Provisions

☐ Trust includes spendthrift clause protecting beneficiaries
☐ Creditors of beneficiaries cannot reach trust assets
☐ Beneficiaries cannot assign or transfer their interests

Article VIII: Tax Provisions

Grantor Trust Status:
☐ Trust is intentionally designed as grantor trust for income tax purposes
☐ Grantor reports trust income on personal tax return
☐ Trust assets receive step-up in basis at Grantor's death

State-Specific Considerations

States with Special Rules

☐ Michigan: Home in irrevocable trust may be countable asset
☐ California: Asset limit returning January 1, 2026; look-back elimination by July 2026
☐ New York: Higher asset limits ($33,038)
☐ Connecticut: Lower asset limit ($1,600)

State-Specific Checklist

☐ Reviewed state Medicaid manual provisions on trusts
☐ Verified treatment of home in irrevocable trust
☐ Confirmed income limit applicability
☐ Checked for state-specific look-back exceptions
☐ Verified Medicaid estate recovery rules

Post-Execution Requirements

Immediate Actions After Trust Creation

☐ Trust document signed and notarized
☐ Trustee acceptance signed
☐ Trust funded with initial property
☐ Property deeds transferred and recorded (if real property)
☐ Bank/investment accounts re-titled in trust name
☐ Trust EIN obtained (if required)
☐ Copies provided to all parties

Ongoing Administration

☐ Trustee maintains accurate records of all transactions
☐ Annual trust accounting prepared
☐ Income distributions documented
☐ Trust tax returns filed (if applicable)
☐ Insurance maintained on trust property

Required Supporting Documents

☐ Property deeds for transfer
☐ Bank account information
☐ Investment account statements
☐ Life insurance policy documents
☐ Vehicle titles (if transferring)
☐ Appraisals for valuable property
☐ Gift tax returns (Form 709) if required

Professional Consultation Requirements

Attorney Review Required For:

☐ Drafting the actual trust document
☐ State-specific compliance review
☐ Medicaid eligibility analysis
☐ Tax implications assessment
☐ Integration with overall estate plan

Other Professional Consultations

☐ Certified Public Accountant (tax planning)
☐ Certified Financial Planner (asset management)
☐ Medicaid planning specialist
☐ Elder law attorney

Cost Considerations

Warning Signs - When MAPT is NOT Appropriate

☐ Need for Medicaid coverage within 5 years
☐ Insufficient assets outside trust for living expenses
☐ Health crisis is imminent
☐ Significant debt that could be affected
☐ Complex family dynamics requiring flexibility
☐ Assets primarily consist of retirement accounts

Signatures and Acknowledgments

Grantor Acknowledgment:

I, _________________________, acknowledge that I have received legal counsel regarding this Medicaid Asset Protection Trust, understand that it is irrevocable, and that assets transferred cannot be retrieved.

Signature: _________________________ Date: _______________

Trustee Acceptance:

I, _________________________, accept appointment as Trustee and agree to administer the trust in accordance with its terms and applicable law.

Signature: _________________________ Date: _______________

Witness Signatures:

1. Signature: _________________________ Date: _______________
   Print Name: _________________________

2. Signature: _________________________ Date: _______________
   Print Name: _________________________

Notary Acknowledgment:

State of _________________________
County of ________________________

On this _____ day of _____________, 20____, before me personally appeared _________________________, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged that they executed the same for the purposes therein contained.

_________________________________
Notary Public

My Commission Expires: _______________

Resources and References

• State Medicaid Agency Contact: _________________________________
• Elder Law Attorney: _________________________________________
• Medicaid Planning Assistance: https://www.medicaidplanningassistance.org
• State Bar Elder Law Section: _________________________________

This template is for informational purposes only and does not constitute legal advice. Consult with a qualified elder law attorney before establishing any Medicaid Asset Protection Trust.