Preplanning with Asset Protection Trusts
Asset protection trusts designed for long-term care purposes are special types of irrevocable trusts that remove assets from your estate so they are not considered when applying for VA Pension benefits or Medicaid benefits. We generally call these trusts Medicaid Asset Protection Trusts (MAPT’s) or Veterans Asset Protection Trusts (VAPT).
For Medicaid purposes, assets need to be transferred to the trust at least 5 years prior to the filing of a Medicaid application. There is currently no look-back period for VA Pension benefits. However, if qualifying for VA Pension is an important part of your long-term care plan, we suggest that you create and fund the trust immediately given pending changes to VA law.
MAPT’s and VAPT’s are sophisticated instruments that maintain as much control for the Trustmaker as possible, while still removing assets from the estate for eligibility purposes. MAPT’s and VAPT’s also generally maintain the favorable income and capital gains tax treatment that you enjoyed prior to transferring assets to the trust.
The ElderCare Law Firm Inc. can help you come up with a plan for asset protection trusts to ensure that your estate is protected. Contact us today to get started with your planning process.