What is an Irrevocable Medicaid Asset Protection Trust (MAPT) in NC?

An Irrevocable Medicaid Asset Protection Trust (MAPT) is a legal strategy in North Carolina that protects assets from being counted when determining Medicaid eligibility. Medicaid becomes a concern for most people:
- after they reach the age of 65 and
- Consider the need for long-term care (e.g. nursing home)
To be eligible for Institutional Medicaid or Nursing Home Medicaid in NC, an individual must have an income that is
less than the amount Medicaid pays for Nursing Home Care. In 2024, Medicaid pays between $6,381–$9,087 per month or $76,572-$109,044. Additionally, assets of the individual must be worth no more than $2,000 (for a single applicant) or $3,000 (for married applicants who are both applying). There are 2 main exclusions to the $2k or $3k asset limit:
- the primary residence, and
- one motor vehicle.
To reduce all other assets to be under the $2k or $3k asset MAXIMUM, individuals transfer ownership of property, stocks, and savings accounts through gifts or by selling them and also a Medicaid Asset Protection Trust (MAPT).
The Key to Planning is Timing:
Medicaid has a 60-month look-back period, where Medicaid reviews all of your financial transactions for five years prior to the date of your application for Institutional Medicaid or Nursing Home Medicaid in NC. Transfers within the 60-month period made for less than fair market value (i.e. a gift or a super discount) will be disallowed and counted as assets, usually pushing the individual over the $2k or $3k asset MAXIMUM for eligibility purposes.
So, if you plan or expect to possibly be going to a nursing home in 5 years (e.g. 2030), you would want the MAPT to be created in 5 years in advance (e.g. 2025).
Some potential drawbacks of a MAPT:
- The advanced timing required to create a MAPT, usually five years in advance
- The Trust is Irrevocable, meaning it is a permanent transfer where an owner is giving up control over the assets
- The legal costs of setting up a MAPT
How do you get started?
First, Contact an estate attorney to review your assets, liabilities, and overall retirement plan. The estate attorney can explain the process, assist with creating a trust and will, and explain asset transferring and your ultimate goals.
Second, time matters, and starting as soon as you can is important.
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