Medicaid

How Do Medicaid Asset Protection Trusts Work?

Written by Lorraine Roberte

Published on September 23, 2026

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Key takeaways:

A Medicaid asset protection trust (MAPT) is a special kind of estate planning tool that can help you qualify for Medicaid’s long-term care coverage. Assets in an MAPT usually don't count against Medicaid eligibility.
An MAPT can also protect your home and savings after your death. The assets in the trust will go to your loved ones instead of being used to repay the state — which can happen if your Medicaid agency pursues what’s known as estate recovery.
You need to plan ahead to use an MAPT. Assets you don’t want to be counted against your Medicaid eligibility usually have to be in the trust for at least 5 years before you apply for long-term care coverage. Once the assets are in the trust, you no longer own them.

Long-term care costs can drain a person’s life savings. In 2025, a semiprivate nursing home room averaged more than $9,500 per month, and long-term care isn’t covered by Medicare. Some people have long-term care insurance and use other end-of-life planning tools to help with the costs. One option is to get long-term care coverage through Medicaid if you meet the strict financial requirements for eligibility.

When established far enough in advance, a Medicaid asset protection trust (MAPT) can help you qualify for Medicaid even if you have accumulated savings and property. Once you move assets into the trust, you no longer own them. As a result, they don’t count toward your resource limit for Medicaid, which can allow you to qualify for long-term care coverage.

Here’s information to help you decide if an MAPT could be right for you.

What is a Medicaid asset protection trust (MAPT)?

An MAPT is a type of irrevocable trust — a legal arrangement that typically can’t be changed or canceled — that can help you keep certain assets from being counted against your Medicaid eligibility. MAPTs help people who would otherwise not qualify for Medicaid meet eligibility standards for long-term care coverage. The goal of having an MAPT is to preserve family assets while accessing government resources to pay for long-term care.

Once assets are transferred into an MAPT, they belong to the trust rather than you. This benefits you because the assets won't count toward the Medicaid asset limit — which is capped at $2,000 for individuals and $3,000 for married couples in most states. A trustee, who must be a person other than you, manages the trust according to its rules.

MAPTs are typically used by older adults planning for long-term care. These adults often have Medicare, but no coverage for long-term care. Qualifying for Medicaid may mean they’ll have both types of coverage.

What is the Medicaid countable asset limit?

Medicaid has strict financial requirements for long-term care coverage. In most states, you can only have $2,000 or less in countable assets if you’re single — or $3,000 or less if you’re married — to qualify. Some states have a higher or lower limit.

Not all assets count toward the limit. Your countable assets include any money you have in bank accounts and, if applicable, the value of your second car. Your primary vehicle is excluded — as is your primary residence, in most cases.

How do you set up a Medicaid asset protection trust?

It's best to set up your MAPT with a licensed elder law attorney or certified Medicaid planner who knows your state regulations. Medicaid rules are complex and vary by location.

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If you don’t follow the proper procedures — for example, if you don’t set up your MAPT correctly or early enough — your trust assets might still count toward your financial resources. And you may need help with assets outside your MAPT, because how you handle them can also impact whether you qualify for Medicaid. For instance, if you transfer ownership of your home to your child, you may incur a penalty or a period of time when you are denied Medicaid eligibility.

The cost of working with an elder law attorney for Medicaid planning ranges from $3,000 to $15,000. You also may have access to a local legal aid office that offers free or low-cost services.

How do you transfer assets into an MAPT?

Transferring assets into an MAPT involves legally renaming or "retitling" them so that the trust becomes the new owner.

For example, you would move real estate property into your MAPT by signing a new deed that names the trust as the owner. You would then record that deed with the appropriate local government entity, such as a clerk’s office or a recorder of deeds. For a financial account, you would work with your bank or investment firm to place the account in the trust’s name.

How much does an MAPT cost?

An MAPT can cost $2,000 to $12,000 to set up. The price will depend on factors such as the value of assets included in the trust, where you live, and your attorney’s experience. Some attorneys will only set up an MAPT for you as part of a comprehensive estate planning package. Depending on the value of the assets you’re seeking to protect, an MAPT may not be worth the cost.

An MAPT also comes with ongoing expenses, such as tax preparation fees if an accountant prepares your trust’s tax return. The administrator must file a tax return if the trust earns $600 or more in a year from its assets.

What are the pros and cons of a revocable trust?

A revocable trust, also called a living or family trust, is a common estate planning tool. But a revocable trust will not protect your assets from being counted against your Medicaid eligibility. Here are pros and cons you should consider before setting up a revocable trust.

Pros

With a revocable trust, you:

Keep control of your assets: You stay in charge of the trust’s assets. You can change or cancel the trust at any time.
Avoid probate: Assets in the trust go straight to your named beneficiaries when you pass away.
Have a smoother handoff if your health fails: Someone of your choosing can take over managing the trust if your health doesn’t allow you to continue as the administrator.

Cons

On the other hand, a revocable trust:

Does not help with Medicaid eligibility: Assets in the trust are still considered countable for Medicaid eligibility purposes, because you control them.
Doesn’t provide tax savings: Assets in a revocable trust are still taxed as part of your estate, and any income from the assets is still recognized on your personal income tax return.
Does not protect you from debtors: You can still lose trust assets to debt claims or lawsuits.

What are the pros and cons of an irrevocable trust?

With an irrevocable trust like an MAPT you give up ownership of transferred assets, but you protect them from creditors, lawsuits, and estate recovery. Here are some pros and cons to consider before setting up an irrevocable trust, namely for Medicaid asset protection.

Pros

An irrevocable trust for Medicaid asset protection:

Helps you qualify for Medicaid: Assets you put in the trust don’t count against your Medicaid eligibility if you transferred them at least 5 years before applying.
Protects you from debt collectors: You don’t own the assets in the trust, so they are usually safe from personal lawsuits and creditors.
Preserves your home and legacy: A properly drafted irrevocable trust can protect your home from Medicaid estate recovery after your death. Your home will go to your heirs or designated beneficiaries instead of being used to repay the state for your long-term care.

Cons

However, with an irrevocable trust for Medicaid asset protection, you:

Lose control of assets: Once you put assets in the trust, you don’t own them anymore, and neither you nor your spouse can serve as the trustee.
Have higher costs: Irrevocable trusts cost more to set up and maintain than revocable trusts. And you can be taxed on any income you receive from the trust.
Have a (nearly) airtight arrangement: Changing the trust will likely require sign-off from your beneficiaries or a court. Even then, only certain changes are allowed.
May be subject to changing regulations: You could be in a different position if rules for Medicaid or MAPTs change in the future.
May have to navigate complex tax rules: Moving assets into the trust may result in capital gains taxes. Ask your elder law or estate planning attorney about this during your estate planning conversations.

How does the “look-back period” affect Medicaid eligibility?

In most states, Medicaid reviews your financial records — such as your bank statements and, if applicable, property transfers — from the 5 years before you apply for long-term care coverage. This is called the “look-back rule,” or “look-back period.”

The look-back period is designed to prevent people from relinquishing assets for less than the fair market value in order to qualify for Medicaid long-term care coverage. Rules vary by state and territory.

If you give away assets, sell them for less than they’re worth, or move them into an irrevocable trust during the look-back period, Medicaid can delay your coverage. In this case, you would have to pay for your care until those costs equal what you gave away or transferred. But there are exceptions. For example, there may be certain people to whom you can transfer assets without a penalty.

Is a Medicaid asset protection trust right for you?

Creating an MAPT may help you achieve your long-term care planning goals if:

You're making arrangements at least 5 years in advance. An MAPT will work best if you set it up long before you need care. If you need Medicaid sooner, a Medicaid planning strategy like creating a funeral trust might be more helpful.
You have more financial resources than Medicaid allows, but less than you need to cover care. An MAPT can help if your assets put you over the Medicaid asset limit, but you won’t be able to get enough value from them to pay for long-term care in a facility, or at home.
You want to leave something to your family. An MAPT can protect inheritances and prevent your assets from estate recovery after your death.
You're comfortable giving up control. You must accept that the assets in an MAPT are no longer yours and that someone else will manage them.

How are assets held by a Medicaid asset protection trust treated for Medicaid eligibility?

Assets in a properly structured MAPT do not count against your Medicaid eligibility, as long as you transferred them before the look-back period.

However, any money you get from the trust, such as interest or dividends, counts toward the Medicaid monthly income cap for long-term care coverage. In most states, that limit is $2,982 per month in 2026 for an individual.

How do you transfer assets through a Medicaid asset protection trust?

You pass on assets through an MAPT by naming beneficiaries, such as your children. When you die, the trust assets will go directly to them. This means avoiding probate, a legal process that involves a court reviewing a deceased person's will and appointing an executor or personal representative responsible for paying debts and distributing assets to beneficiaries.

You can change your MAPT’s beneficiaries after you set it up, but only if the trust’s terms include a clause that allows this.

The bottom line

A Medicaid asset protection trust (MAPT) is an irrevocable trust that can help you qualify for Medicaid to pay for long-term care. If set up correctly, an MAPT safeguards your assets and prevents them from counting against your Medicaid eligibility. You can still derive income from the MAPT, within limits, and assets will transfer to your beneficiaries when you die instead of being used to repay the government for your long-term care (known as estate recovery).

Some MAPT disadvantages include giving up control of your assets and facing strict limits on changing or canceling the arrangement. Setting up an MAPT works best if you don’t expect to need long-term care in the next 5 years. You may consider consulting an elder law attorney or certified Medicaid planner to see if an MAPT may be the right fit for your needs.

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Written by:

Lorraine Roberte

Lorraine has been writing in-depth insurance and personal finance content for 3 years. She has written hundreds of articles on these topics, with her work appearing on such sites as the Balance, the Simple Dollar, ConsumerAffairs, and I Will Teach You To Be Rich.

Edited by:

Cindy George, MPH

Cindy George, MPH, is the senior personal finance editor at GoodRx. She is an endlessly curious health journalist and digital storyteller.

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References

American Bar Association. (n.d.). The probate process.

American Council on Aging. (2025). How Medicaid planning trusts protect assets and homes from estate recovery.

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