Medicaid Asset Protection Trusts MAPTs Daniel Timins Esq

Medicaid Asset Protection Trusts [“MAPTs”] Daniel Timins, Esq. , CFP® Law Offices of Daniel Timins 477 Madison Avenue, Suite 240 New York, NY 10022 (212) 683 -3560 www. Timins. Law. com

The Object: Get on Medicaid while Maintaining Family Assets • Barriers: • Asset Limit: $13, 800 (minus retirement plans) • Income Limit: $767 / mo. (minus $ going to SNTs) • Transfer Look Backs: • Home Care = 1 month • Institutional = 5 years • DSS now scrutinizing trusts and Medicaid recipients vigorously • Outsourcing legal work to law firms • Denying many Income Only Trusts

MAPTs to the Rescue • What is a “Medicaid Asset Protection Trust”? • An irrevocable trust (a form of an Income Only Trust) • Primary residence and assets shielded from Medicaid • 5 year look back still required • THE DIFFERENCE: • Most IOCs allow Medicaid recipient to take ALL income (thus fully Medicaid recoverable) • Income from MAPT can go to parent OR child • But if income goes to a parent on Medicaid then ONLY that month’s payment is recoverable by DSS • Though it is illegal, child could (hypothetically) “sneak’ his withdrawals back to parent

The MAPT Process 1. Parent creates the Trust today Child(ren) is Trustee today 2. Parent places home and majority of funds in Trust now (minus 5 years of living expenses) 3. 5 year Look Back period begins 4. After 5 years MAPT pays home expenses, and Social Security pays for other expenses 1. (I. e. leave more money in MAPT) 5. Upon Medicaid application parent has less than $13, 800 in assets AND house and MAPT assets are protected

“Do’s” With MAPTs • Transfer house and most assets • Pay for home repairs and improvements • Pay real estate taxes & home owners insurance • Make gifts to other people from MAPT • A MAPT can be changed (“Decanted”) even though it is irrevocable

“Don’ts” With MAPTs • Pay telephone or utility bills from MAPT • Use MAPT funds for personal expenses • Purchase a car with MAPT assets • Don’t take principal or capital gains • Don’t transfer IRAs to MAPT • Don’t let children return MAPT gifts to parent or to MAPT