Medicaid Asset Protection Trust Attorneys in Plymouth, Michigan

At Steslicki & Ghannam PLC, our Plymouth estate planning attorneys represent clients throughout Michigan and are passionate about protecting their futures, including those interested in a Medicaid Asset Protection Trust (MAPT).

A MAPT is a legal arrangement allowing our clients to qualify for long-term care benefits from Medicaid while protecting their assets from being depleted if that care is needed.

It is a powerful tool that can help preserve your family’s assets while increasing your chances of qualifying for Medicaid. However, it’s important to note that your household assets must be under a certain level to be eligible for Medicaid. The rules about asset levels are strict, and there is a five-year look-back period to see if an individual qualifies.

When it comes to long-term care Medicaid, the key is to plan well in advance. We can help.

How Do Michigan Medicaid Asset Protection Trusts Work?

First, multiple parties are involved in developing and maintaining a MAPT, and strict rules govern who is eligible to fulfill the roles and how the trust money can be used.

• The individual who creates the MAPT is called a grantor.
• The trustee is the party who manages the trust and controls its assets. The trustee can be the grantor until they no longer have the capacity to manage their affairs, then it must be transferred to another party.
• A beneficiary is also named and is the person who will benefit from the trust after the grantor passes away.

The trust shields the grantor’s assets from being counted for Medicaid eligibility, making them eligible if they wouldn’t be otherwise, ensuring they receive the care they need, whether at home or in a nursing home.

What Type of Assets Can Go into a Medicaid Asset Protection Trust?

A MAPT must be designed as irrevocable for exemption from Medicaid’s asset limit. This means that the trust cannot be canceled or changed. Once the assets are transferred into the trust, they no longer belong to the grantor, nor can they regain ownership. Still, they can receive all income, including interest, dividends, rental income, and capital gains that the trust assets may generate.

Assets that can be transferred to a MAPT include:

• Personal assets, including jewelry, heirlooms, and other valuables.
• Qualified retirement and investment accounts.
• Specific life insurance policies.
• The primary residence or the spouse’s primary residence.
• Vehicles.

The more you and your family understand the nuances, eligibility requirements, and benefits of creating a MAPT, the better equipped you will be to make informed decisions about your current and future needs. We can help. Contact our skilled Medicaid Asset Protection Trust attorneys in Plymouth today to schedule an appointment to discuss your long-term care plans.

What are the Benefits of a Medicaid Asset Protection Trust?

Because there are specific asset limit requirements for Medicaid eligibility, a MAPT allows you to protect your assets without “spending down.” Instead, the assets are protected and passed along to the beneficiaries named in the trust after your death.

When a Medicaid recipient passes away, Michigan attempts to collect reimbursement for the long-term care it paid for. This is done via the deceased’s estate. However, if your home and other assets are in a MAPT, the state cannot come after those assets, nor can any other creditors.

Other benefits of creating a MAPT include:

• Access to Supplemental Funds

Depending on the assets the trust protects, some may pay supplemental income, including interest, dividends, rental income, or capital gains. These payouts can provide resources for uncovered medical expenses and help enhance your lifestyle.

• Designating a Beneficiary of the Trust

A MAPT also allows you to designate the beneficiary who will receive what remains of the trust when you die, eliminating the need for probate. Moreover, because the funds will remain in the trust when you pass away, your beneficiary’s inheritance will be protected from creditors and is not eligible to be counted during the equitable distribution of assets during divorce proceedings.

You can also stipulate how your beneficiary may use the trust, for example, for education or to pay off a mortgage on their home.

• Tax Benefits

Your MAPT can be structured to minimize estate taxes since the trust removes your assets from your taxable estate. Because estate taxes are only incurred by estates of over $12,000,000, this advantage benefits only those with high-net-worth estates.

Assets may also be revalued at death, potentially reducing or eliminating capital gains tax for heirs.

How Far in Advance Do I Need to Plan for a Medicaid Asset Protection Trust in Michigan?

MAPTs require careful planning, as Medicaid has a “look back period” for eligibility. This refers to a period, typically five years, during which Medicaid examines an individual’s financial transactions to determine if any assets were transferred for less than fair market value. This scrutiny helps prevent individuals from transferring assets to others to qualify for Medicaid benefits while still having significant assets.

As long as the trust is created and assets transferred five years before the grantor applies for Medicaid long-term care benefits, Medicaid will not penalize the donor for transferring assets, and the trust’s existence will not impact Medicaid eligibility.

Do I Need an Attorney to Set Up a Medicaid Asset Protection Trust in Michigan?

While having an attorney to set up a Medicaid Asset Protection Trust in Michigan is not legally required, consulting with a lawyer is highly recommended.

Medicaid rules and regulations are complex and can change quickly. Our experienced MAPT attorneys in Plymouth understand the intricate details of state and federal laws governing Medicaid eligibility and asset protection trusts. We can ensure the trust is structured correctly to comply with all legal requirements.

In addition, we provide the following:

• Tailored Advice

Every individual’s financial situation is unique, and we can provide personalized advice based on your specific circumstances. We can help you determine if a Medicaid asset protection trust is the right option for your needs and assist in drafting the trust document accordingly.

• Avoiding Mistakes

DIY approaches to legal matters can lead to mistakes that may have significant consequences, such as Medicaid ineligibility or triggering unintended tax liabilities. Our Plymouth MAPT attorneys can help you navigate the process smoothly and avoid pitfalls.

• Maximizing Benefits

Our knowledgeable attorneys can help you maximize the benefits of a Medicaid Asset Protection Trust while ensuring compliance with Medicaid regulations. We can advise on strategies to protect assets while qualifying for Medicaid benefits to cover long-term care costs while accessing supplemental income from the trust.

• Peace of Mind

A well-designed and properly implemented MAPT can offer peace of mind to both the grantor and beneficiaries by protecting assets, ensuring Medicaid eligibility, maintaining control over assets, safeguarding inheritances, and avoiding the complexities of probate.

You will know that your Medicaid Asset Protection Trust has been set up correctly and according to applicable laws and regulations.

Contact Our Experienced Medicaid Asset Protection Trust Attorneys in Plymouth, Michigan

At Steslicki & Ghannam PLC, our Plymouth Medicaid Asset Protection Trust lawyers are dedicated to providing customized estate planning strategies for clients throughout Michigan. If you have questions about whether a MAPT suits you and your family or are ready to take the next estate planning step, contact our skilled attorneys today to get your questions answered so you can make informed decisions about your future.