How to Protect Your Assets from Medicaid Eligibility Limits

If you make too much money to be eligible for Medicaid, here's something that might help. I'm Tyler, I'm a former financial advisor and portfolio manager. I make financial content for free so that you don't have to pay for it.

1. Establish a Medicaid Asset Protection Trust (MAPT)

You could establish an MAPT, or Medicaid Asset Protection Trust. Your assets are placed in the trust and shielded from Medicaid eligibility limits, preserving your legacy for your heirs. Even though the assets are in the trust, it could still provide supplemental income to you, the grantor, to improve your quality of life. Additionally, there are some potential tax advantages; you could reduce estate taxes and receive some protection from capital gains taxes, but only if it's a grantor trust.

2. Understand the Drawbacks

Now, let’s talk about the drawbacks. There's always nuance, my friends. You, the grantor, relinquish control over the assets, relying on an appointed trustee for management. You also need to have established and funded the trust five years prior to being considered for Medicaid. Finally, and perhaps most importantly, once the trust is established, it cannot be modified or revoked, limiting your ability to change your mind should you realize later in life that your son, to whom you were gonna leave all this money, was actually a ding-dong all along.

Conclusion

If any of this is helpful, tune into my new podcast, Your Money Guide on the Side, by clicking the link in my bio.

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