The Medicaid Asset Protection Trust (MAPT) is a very valuable tool to employ in elder law and estate planning in order to protect assets and property from Medicaid, to establish eligibility for government benefits without having to necessarily spend down the assets, and to pass on property to future generations free of probate. It is not suited to every client, however, it has numerous substantial benefits and we, at the Law Offices of James Yastion, PLLC, will discuss with you whether the MAPT is an appropriate estate planning and asset protection tool.
The MAPT is a special kind of irrevocable trust that grants the creator of the trust (called the “grantor”) access to the income generated by the trust but restricts access to principal. The reason for this restriction is the idea that creditors including Medicaid should not have access to principal if the grantor does not have access. Often times clients transfer the primary residence into the MAPT since the above restriction does not have any practical effect on what can be done with the home. The grantor retains the right to occupy the property and keeps all real property tax exemptions including STAR and veteran’s exemptions. Clients often transfer other assets into the MAPT as well including stocks, bonds and bank accounts.
The watchword for the MAPT is flexibility. There numerous terms of the trust that add great flexibility to off-set the restrictions. For example, the trust assets can be freely sold or exchanged for assets of equal value, real property in the trust can be sold and new property can be purchased within the trust, the grantor can remove the trustee and name a new trustee, and the grantor can change the beneficiaries. Finally, although the MAPT is irrevocable, it can be fully or even partially revoked by a certain procedure.
In sum, the MAPT is a very flexible and effective estate planning and elder law tool to be utilized in many cases in order to preserve, protect and pass on in the most efficient way assets to your children and beneficiaries.
Please contact the Law Offices of James Yastion, PLLC at (845) 255-4400 to schedule an initial consultation to discuss what is the best estate planning solution for you and your family.