Medicaid Planning Attorney Holding Building Blocks to Protecting AssetsA Medicaid Asset Protection Trust (MAPT), also known as an Irrevocable Income Only Trust or Medicaid Trust, can protect the assets of someone applying for Medicaid benefits, so they are able to meet the financial requirements for Medicaid-paid long-term care. A MAPT is a useful estate planning tool should you or your spouse require long-term care, and this type of trust can help pay for a nursing home or assisted living without your having to drain your savings and assets. A MAPT acts as an irrevocable trust, and you can transfer assets into it; however, once transferred, you can’t take those assets out. Because you want to be careful when choosing assets, it’s important to get legal help from a skilled, experienced New York estate planning attorney.

Understanding MAPTs

Seniors 65 and older can receive Medicare, and this federal health insurance provides health coverage for many types of expenses. However, it doesn’t cover long-term care in a nursing home or in an assisted living facility. You can obtain coverage for long-term care paid for by Medicaid, but you must meet certain financial requirements. The primary purpose of a MAPT is to protect your assets inside the trust, so after a look back, Medicaid, and not your personal assets, will pay for your long-term care needs.

Assets You Can Place in an MAPT and Still Be Eligible for Medicaid

  • Stocks and bonds
  • Cash
  • Vehicle
  • Bank accounts
  • CDs
  • Pensions
  • Vacation home property
  • Income from rental property
  • Investments

The Five-Year Look Back in New York

A look-back period is the amount of time when Medicaid looks at the financial transactions of the person applying for benefits. Medicaid looks back five years to determine if the applicant transferred assets for less than fair market value, gave away money or resources to friends and relatives, or gifted assets, all to qualify for Medicaid benefits. If the applicant has done any of these things within that five-year period, a penalty period will be imposed—a period of time when the applicant who transferred assets will not qualify for Medicaid. Medicaid wants to prevent applicants from giving away their assets and appearing that they’ve spent all their money simply to qualify for benefits.

As of 2023, New York doesn’t have a five-year look-back period for Medicaid. But plans are in place to implement this look-back period in 2024. When this happens, applicants will be required to submit financial documents dating back 2.5 years.

Why You Need an Attorney to Help Establish an MAPT in New York

When you need long-term care, the costs can be astronomical, and you may wonder how you’ll ever pay for a nursing home or assisted living. Even if you qualify for Medicaid, the application process can be confusing and complicated. Even though you do not have to hire a lawyer to submit an application to Medicaid, it’s beneficial to have a legal advocate who understands your situation and can speak with the Medicaid caseworker if necessary.

Additionally, it’s crucial to hire an attorney with experience in New York Medicaid law. If you submit your application for Medicaid without transferring the correct assets first, or you don’t understand how much money you’re allowed to keep, you may end up paying a great deal of money in out-of-pocket costs.

Benefits of Having a New York Estate Planning Attorney

  • An attorney handles all your paperwork and will communicate with the Medicaid caseworker.
  • An attorney will lead you through the application process, get your paperwork filed on time, and know where to file it.
  • An attorney will communicate with you on the status of your application.
  • An attorney can help avoid a denial of benefits.
  • An attorney will be there to help with an appeal.
  • An attorney understands the regulations, guidelines, and statutes that can impact how your application gets processed.
  • An attorney will ensure that your MAPT is legally binding.