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MAPT Overview Flowchart

This document provides an overview of a Medicaid Asset Protection Trust. The trust protects assets from being counted for Medicaid purposes after a lookback period expires and allows lifetime beneficiaries to access funds as needed. It describes standard characteristics like being irrevocable and defective as to income, and options like choosing lifetime beneficiaries and trustees. It also outlines tax implications and what happens to the principal and trust at the death of the grantor.

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Dalmary Vazquez
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213 views1 page

MAPT Overview Flowchart

This document provides an overview of a Medicaid Asset Protection Trust. The trust protects assets from being counted for Medicaid purposes after a lookback period expires and allows lifetime beneficiaries to access funds as needed. It describes standard characteristics like being irrevocable and defective as to income, and options like choosing lifetime beneficiaries and trustees. It also outlines tax implications and what happens to the principal and trust at the death of the grantor.

Uploaded by

Dalmary Vazquez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Medicaid Asset Protection Trust Overview

PURPOSE:
Protect trust assets from being counted for Medicaid purposes (after the lookback period expires). Allow lifetime beneficiaries to
access trust funds as needed.

STANDARD CHARACTERISTICS: OPTIONS:


• Self-Settled Medicaid Asset Protection Trust • Income to Grantor
• Irrevocable • Choice of lifetime
• Grantor - No Access to beneficiaries
Principal • Choice of Trustee
• Typically defective as to • Limited Power of
income Appointment for Step
• Gift for Medicaid purposes Up in Basis
(penalty imposed, subject to During Grantor’s Lifetime • Grantor Trust Powers
lookback period) • Trust Protector
• Residuary Beneficiaries

Changes to
Income Principal Trustee
Trust?

• Paid to grantor, lifetime • May be paid to lifetime • May only be made by a Trust • Appointed by the grantor
beneficiaries, or neither. beneficiaries under the Protector in the absence of a (usually not the grantor).
• May accumulate in the trust. terms set by the grantor. limited power of appointment. • May be interested
(also a beneficiary) or
independent.
• Responsible for making
Taxes distributions of income
or principal.

• Income taxed to the grantor (regardless of who


receives it) if grantor trust provisions chosen.
• Gift tax return may be filed at the time of funding
(may be a completed gift trust).
• When principal distributions are made, gift tax
return must be filed (if not previously filed).
WHO ARE THE LIFETIME
BENEFICIARIES?
• Anyone the grantor
chooses (except the At the death of the grantor
grantor).
• Often it is one or more
children, other family
members, or close
• If a joint trust, assets remain in
friends of the family.
trust under the same terms.
• If an individual trust, assets pass
to the residuary beneficiaries
either outright or in trust.

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