Medicaid Asset Protection Trust

Serving Palm Beach, Martin, St. Lucie, Broward, Okeechobee Counties and the Surrounding Communities


What is a Medicaid Asset Trust and can it help me?

As Florida Medicaid lawyers, we may recommend a Medicaid Asset Protection Trust for you if you:

  • Are concerned about preserving assets for your spouse or other family members.
  • May require Medicaid benefits for long-term nursing home care in the future, even if current health is not an issue.
  • Do not have long-term care insurance, or if you have not taken any other steps to cover long-term care nursing costs.
  • Have people you trust, such as adult children, who can serve as trustee(s).

A Medicaid Asset Protection Trust is an irrevocable trust. Properly managed and funded, after five years, all of the principal will be deemed an unavailable asset if you apply for Medicaid, and will be preserved for your family.

How Does a Medicaid Asset Protection Trust Work?

A Medicaid Asset Protection Trust is an irrevocable Trust that can be a highly effective asset preservation strategy. This strategy allows you to place in the Trust assets that Medicaid would otherwise consider to be available to you and would count against your eligibility.

You, the “trustor,” create the Trust and name one or more persons other than yourself or your spouse to manage the Trust. You are entitled to all of the income from the Trust for your lifetime. You may also make the income available to your spouse. Neither you nor your spouse may draw from the principal. However, you may direct the trustee to withdraw principal to give to others, including to you. This is the way you can get funds from the Irrevocable Trust if you need them.

You may give detailed instructions as to how the assets are managed. You may even retain the right to change the trustee at any time if the trustee is not managing the assets to your satisfaction, or for any other reason. You continue to have full use of any real estate placed in the Trust.

Although the Trust is irrevocable, you have the right to change the beneficiaries. In the unlikely event that you ever need to terminate the Trust, you may do so if the trustees and beneficiaries agree.

The principal generally stays in the Trust until your death, at which point the Trust assets pass directly to your heirs, without the expense and delays of probate.

Must All Assets be Placed in the Medicaid Asset Protection Trust?

You do not need to put everything you own into a Medicaid Asset Protection Trust. Our Florida Elder Law Attorneys generally recommend putting in only certain assets, such as liquid assets which are subject to capital gains and are drawing interest. As trustor, you can keep as much of your assets as you wish outside the Trust, in order to maintain your financial independence. Any assets that remain outside the Trust, however, should be held jointly or in a separate Living Trust (Revocable Trust) in order to avoid probate.

As you can see, The Medicaid Asset Protection Trust can be a highly effective asset preservation tool. It is also highly complex, and must be discussed with, and designed and drafted by, a certified and experienced Florida elder law attorney.

Contact the Karp Law Firm for assistance.


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