Q: My mom will receive $75k from inheritance. She is on Medicaid in long term care. Can we set up a MAPT now for her?
My grandparents trust from their home. Mom has Been in long term care for 2 years. In 2017, trust attorney said she could put her inheritance in a trust when time comes as mom is on Medicaid. She asked me who would administer, I specified my brother. Now we are being told they are cutting a check to the nursing home in the next few months. Trust is in Indiana. Long term care facility is in IL. There wouldn't be a Medicaid look back period if she's already established, right? My grandparents set up the trust so that the state wouldn't get the money and it would go to family.
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A: This is a complicated area of law with lots of moving parts and not suitable for a general forum like this. That said, a transfer to a Medicaid asset protection trust would create a penalty period. It is entirely possible that the previous attorney was referring to a different type of trust. Whether a different type of trust would work in this situation depends in part on your mother’s age and other factors. You really should contact an experienced Elder law attorney for advice on this. The potential solutions are numerous.
A: The trust you appear to be referencing is not a MAPT, but rather a special needs trust. This can either be a first party special needs trust or a third party special needs trust depending on where the funds are coming from. If your grandparents established a third party special needs trust for your mother and that is where her inheritance is, then provided it is set up correctly it should not jeopardize her Medicaid benefits. However, this is a very complicated area of law and it is best to have an attorney familiar with Medicaid and estate planning review the documents in place to determine the impact of the inheritance on your mother's benefits.
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