Medicaid Asset Protection Trust can be a crucial legal instrument for safeguarding assets while preserving Medicaid eligibility. Medicaid is a vital healthcare program for low-income individuals. It can cover various medical expenses, including long-term care like nursing home services.
However, there are strict eligibility requirements in Florida. Assets like your home, bank accounts, and retirement plans can count against it. That is where a Medicaid Asset Protection Trust can come in handy.
This post will cover the basics of Medicaid Asset Protection Trusts in Florida.
A Closer Look at Medicaid Asset Protection Trust in Florida
What is a Medicaid Asset Protection Trust (MAPT)?
A Medicaid Asset Protection Trust is a legal tool that allows individuals to exclude assets from being counted against Medicaid eligibility. Along with that, it protects the assets from estate recovery. Here’s how it works:
1. Creating the Trust
You start by working with an attorney to set up the trust. This trust is “irrevocable,” which means you can’t easily change or cancel it.
2. Transferring Assets
You transfer your assets into the trust. These assets can include cash, property, investments, and more. Once in the trust, they are no longer considered yours for Medicaid purposes.
3. Look-Back Period
Medicaid looks back five years to see if you’ve transferred any assets. If you have, it could affect your eligibility during that period. That means it’s better to plan ahead.
4. Waiting Period
After you’ve created the trust and transferred assets, there’s a waiting period before you can qualify for Medicaid. You’ll need to use other resources to cover your care costs during this time.
5. Trust Income
Although the trust safeguards your assets, its generated income can still finance your care. However, this income is typically less than what your assets would generate.
6. Medicaid Eligibility
Assets in the trust become ineligible for Medicaid after the waiting and look-back periods conclude. You can then apply for Medicaid benefits to cover your long-term care.
Why is it Important in Florida?
Florida, like many states, has strict Medicaid rules. Without careful planning, your assets might disqualify you from coverage. A Medicaid Asset Protection Trust allows you to navigate these rules, protect your assets, and secure the care you need.
A MAPT can be a valuable tool in planning your long-term care. However, the rules surrounding these trusts are complex. When setting up Medicaid Asset Protection Trusts, you should work with a lawyer specializing in estate planning or elder law.