What Is a Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust (MAPT) is a specialized irrevocable trust that allows individuals in North Carolina to protect their assets from being counted for Medicaid eligibility while still qualifying for long-term care benefits.

Medicaid provides crucial support for nursing home care, assisted living, and certain home-based care services, but eligibility rules require applicants to meet strict income and asset limits. A properly structured MAPT can legally shield assets like real estate, investments, and savings from Medicaid’s look-back period, helping families preserve wealth for heirs.

How Medicaid Asset Protection Trusts Work in North Carolina

  1. Irrevocable Trust Creation
    The grantor transfers ownership of assets into the MAPT. Once transferred, the assets are no longer considered part of the grantor’s estate for Medicaid eligibility purposes.
  2. Trust Administration
    A trustee — who cannot be the grantor — manages the trust assets. The grantor can still receive certain benefits, like income generated by the trust, depending on the terms.
  3. Medicaid Eligibility
    After transferring assets into the trust and waiting out the Medicaid five-year look-back period, the grantor may qualify for Medicaid benefits without those assets being counted against eligibility limits.
  4. Protection for Heirs
    Assets remaining in the trust after the grantor’s death can pass to beneficiaries, preserving wealth for children or other loved ones.

Benefits of a Medicaid Asset Protection Trust

  • Protects Assets from Nursing Home Costs
    Preserves real estate, investments, and other assets that would otherwise be spent down to qualify for Medicaid.
  • Maintains Medicaid Eligibility
    Ensures long-term care benefits for the grantor without jeopardizing financial security.
  • Preserves Wealth for Family
    Assets in the trust can be distributed to heirs, allowing families to maintain generational wealth.
  • Peace of Mind
    Offers a structured, legally compliant way to plan for long-term care expenses.

Considerations and Risks

  • Irrevocable Nature: Once assets are transferred into the trust, they cannot be removed by the grantor.
  • Look-Back Period: Medicaid enforces a five-year look-back period. Transfers made during this period may affect eligibility.
  • Professional Guidance Required: MAPTs are complex. Errors in drafting or asset transfer can result in disqualification from Medicaid benefits or legal challenges.

Why Work With an Estate Planning Attorney

Designing a Medicaid Asset Protection Trust in North Carolina requires careful legal and financial planning. An experienced estate planning attorney can:

  • Draft a trust tailored to your goals and family situation
  • Ensure compliance with North Carolina and federal Medicaid rules
  • Coordinate the trust with other estate planning tools, like wills and revocable trusts
  • Help navigate Medicaid applications and eligibility requirements
  • Protect assets for heirs while securing long-term care benefits

Final Thoughts

A Medicaid Asset Protection Trust is a powerful tool for North Carolina residents who want to plan for long-term care without losing their lifetime savings. Proper planning ensures both eligibility for Medicaid and preservation of assets for your family.

At Lohr Law Firm, we help clients across North Carolina establish Medicaid Asset Protection Trusts and comprehensive estate plans that protect wealth, secure long-term care, and provide peace of mind.

Contact Lohr Law Firm today at (919) 348-9211 or evan@lohrnc.com to schedule a consultation and learn how a Medicaid Asset Protection Trust can safeguard your assets and your family’s future.