Medicaid Asset Protection Trust [MAPT]: Rules, Cost & Risks

Barbara is 79. She’s lived in the same house for 43 years, has about $60,000 in savings, and just found out she needs full-time nursing home care after a fall. The facility near her costs roughly $9,700 a month. At that rate, her savings run out in about six months. Medicaid, the program most families end up relying on for long-term care, won’t pay a dime until she’s spent nearly all of it down to $2,000.

This is the exact problem a Medicaid Asset Protection Trust is built to solve. Set up early enough, it lets someone like Barbara keep her home and savings for her children while still qualifying for Medicaid to cover her care. Set up too late, or done incorrectly, it can backfire and delay her eligibility instead of protecting it.

This guide walks through exactly how these trusts work, who should consider one, what they cost, and where the rules trip people up.

Quick answer: A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust that removes assets from a person’s name so they no longer count toward Medicaid’s asset limit, while still protecting those assets for the person’s chosen beneficiaries. Because Medicaid imposes a 60-month look-back period on most transfers, a MAPT only works if it’s created at least five years before someone applies for long-term care Medicaid.

What is a Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust (also called a Medicaid Trust, Medicaid Planning Trust, or Home Protection Trust) is a legal arrangement where a person transfers ownership of their assets, often a home and savings, into an irrevocable trust. Because the trust, not the individual, technically owns the assets, they’re no longer counted when Medicaid calculates eligibility for long-term care coverage.

Three roles matter here:

• The grantor (also called the trustmaker or settlor): the person who creates the trust and puts their assets into it.
• The trustee: manages the trust and controls how its assets are used. This has to be someone other than the grantor or the grantor’s spouse, usually an adult child, a trusted relative, or a professional fiduciary.
• The beneficiary: the person who eventually receives what’s left in the trust, typically the grantor’s children. For the trust to work for Medicaid purposes, the beneficiary also can’t be the grantor.

How This Differs From a Revocable Living Trust

Family trusts and revocable living trusts serve a different purpose entirely, and mixing them up is one of the most common (and costly) planning mistakes. A revocable trust can be changed or canceled at any time, which means the grantor still effectively controls the assets inside it. Medicaid treats that control as ownership. Assets sitting in a revocable trust still count toward the $2,000 asset limit and still need to be spent down.

A MAPT only protects assets because it’s irrevocable. Once the trust is signed and funded, the terms can’t be changed, and the grantor gives up legal ownership and control for good. That trade-off, permanence in exchange for protection, is the whole point of the strategy, and it’s also the biggest thing people underestimate before signing.

Why Families Use Medicaid Asset Protection Trusts

Long-term care is expensive, and Medicaid’s eligibility rules are strict by design.

According to the CareScout Cost of Care Survey, one of the most widely cited nationwide surveys on long-term care pricing, the median annual cost of a private room in a nursing home runs well past $100,000 in most states, with several Northeastern and West Coast states running significantly higher. A couple with a paid-off house and a modest retirement account can burn through decades of savings in two or three years of care.

At the same time, Medicaid’s resource limit for an individual applying for long-term care is generally $2,000 in most states. That figure hasn’t moved with inflation in decades. States also set an income limit; in income-cap states, that threshold sits at roughly $2,982 a month for a single applicant in 2026. Anything above these limits has to be spent down, given away outright (which triggers its own penalties), or protected through a legitimate planning tool like a MAPT before an application can be approved.

A few things Medicaid does not count toward the asset limit, regardless of a trust: a primary residence (up to a state-specific equity limit), one vehicle, and personal items like wedding rings. Everything else, checking and savings accounts, CDs, stocks, a second property, generally counts unless it’s been properly protected in advance.

How a Medicaid Asset Protection Trust Actually Works

The 5-Year Look-Back Period

This is the rule that makes or breaks MAPT planning. When someone applies for long-term care Medicaid, the state reviews the previous 60 months of financial records to check whether assets were transferred out of the applicant’s name for less than fair market value. Moving money or property into a MAPT counts as exactly that kind of transfer.

If assets were moved into the trust less than five years before the Medicaid application, the state imposes a penalty period, a stretch of time during which Medicaid won’t pay for care, calculated by dividing the value of the transferred assets by the average monthly cost of nursing home care in that state. Transfer $150,000 with a $9,700 average monthly cost, and the penalty period runs roughly 15 months.

There are two state-level exceptions worth knowing:

• California currently has no asset limit for Medi-Cal, though the state began reimplementing a 30-month look-back period as of January 1, 2026, a shorter window than the federal 60-month standard used almost everywhere else.
• New York has no look-back period at all for community-based, in-home Medicaid services (though it does apply the standard look-back to nursing home Medicaid).

Because of this rule, the golden rule of MAPT planning is simple: do it while healthy, well before care is needed. A trust created after someone is already in crisis, needing care within the next few years, won’t help with eligibility and may create a costly penalty period instead.

What Assets Can Go Into a MAPT

Most types of property can be placed into a Medicaid Asset Protection Trust, including:

• A primary residence (the grantor can generally continue living in it after the transfer)
• A vacation or rental property
• Checking and savings accounts, CDs
• Stocks, bonds, and mutual funds

Two categories generally stay out of a MAPT. Retirement accounts (401(k)s and IRAs) usually aren’t moved into a trust because doing so triggers immediate income tax on the full balance; other Medicaid planning tools, like a Medicaid Compliant Annuity, typically handle retirement funds instead. And in Michigan specifically, a home placed into any type of trust, revocable or irrevocable, is treated as a countable asset, an exception to how most other states handle primary residences.

Income vs. Principal

If income-producing assets sit inside the trust (rental property, dividend-paying stocks), the grantor can usually still collect that income, while the underlying principal stays protected. That income does still count toward Medicaid’s monthly income limit, so a MAPT doesn’t help someone whose issue is too much income rather than too many assets.

Benefits of a Medicaid Asset Protection Trust

• Protects the full value of the trust, not just what’s needed to meet the asset limit, meaning the house, the savings, and whatever else was transferred all pass to beneficiaries.
• Shields assets from Medicaid Estate Recovery. After a Medicaid recipient dies, the state is federally required to attempt to recover what it paid for care from that person’s estate. Assets held in an irrevocable trust generally aren’t part of the probate estate, so they’re out of reach.
• Avoids the all-or-nothing math of a full spend-down, where every dollar above the limit has to be spent on care, medical bills, or exempt purchases before Medicaid will approve an application.
• Keeps a family home in the family rather than forcing a sale to cover care costs or repay the state after death.

Shortcomings and Real Trade-Offs

A MAPT isn’t a quiet workaround, and the downsides deserve equal attention:

• It’s permanent. Once the trust is funded, the grantor cannot get the assets back, change the trustee’s authority on a whim, or dissolve the arrangement if their situation changes.
• It doesn’t help with a crisis. Because of the 60-month look-back, a MAPT created after a diagnosis or hospitalization typically won’t prevent a penalty period.
• Setup isn’t free. Attorney fees for a properly drafted MAPT typically run $2,000 to $12,000, depending on the state, the complexity of the estate, and whether the trust is bundled with a broader estate plan.
• Capital gains exposure. Transferring a home into an irrevocable trust can affect the stepped-up basis rules that normally reduce capital gains tax for heirs, depending on how the trust is drafted.
• Loss of control, full stop. The grantor is trusting the trustee, and by extension the terms of the document, to manage the asset the way the family intended years or decades earlier.

Medicaid Asset Protection Trust vs. Other Planning Options

Strategy	Protects Assets?	Look-Back Applies?	Reversible?	Best For
Medicaid Asset Protection Trust	Yes, fully	Yes (60 months)	No	Healthy individuals planning 5+ years ahead
Outright gifting	Yes, but riskier	Yes (60 months)	No	Rarely recommended without legal guidance
Spending down assets	N/A (assets are used, not protected)	No	N/A	Those needing Medicaid soon, with fewer assets to protect
Medicaid Compliant Annuity	Converts assets to income	No (if structured correctly)	No	Married couples, or those needing care within the look-back window
Revocable living trust	No, for Medicaid purposes	N/A (doesn’t remove countable status)	Yes	Probate avoidance and estate organization, not Medicaid planning

Gifting assets directly to family members, without a trust, seems simpler but carries more risk. It still triggers the look-back rule, offers no legal protections for the grantor if a relationship changes, and can create capital gains and gift tax complications the trust structure is specifically designed to avoid.

Do Medicaid Asset Protection Trust Rules Vary by State?

Yes, significantly, and this is where generic advice from a national article can lead someone astray.

• California: Medi-Cal currently has no asset limit at all, an unusual exception nationally, though the state’s newly reimplemented 30-month look-back period (as of January 1, 2026) still applies to certain transfers.
• New York: no look-back period for community-based Medicaid (in-home and community services), though nursing home Medicaid still follows the standard 60-month rule.
• Michigan: treats a home placed in trust, revocable or irrevocable, as a countable asset, removing the exemption most other states offer.
• Wisconsin: allows irrevocable trusts to be altered or canceled if the trustmaker, trustee, and all beneficiaries unanimously agree, a flexibility most states don’t permit.

Given this variation, a MAPT drafted using another state’s template, or by an attorney unfamiliar with the client’s specific state, can unintentionally disqualify someone from the protection they were trying to secure.

Do You Need an Attorney to Set One Up?

In practice, yes. A Medicaid Asset Protection Trust has to satisfy both trust law and Medicaid eligibility rules in the specific state where the applicant lives, and the two don’t always overlap the way people assume. An attorney experienced in elder law will typically:

• Confirm the trust language qualifies as irrevocable under state Medicaid rules, not just under general trust law.
• Structure trustee and beneficiary designations correctly, since a grantor named as either can void the trust’s protection.
• Coordinate the trust with other documents already in place, such as a will, power of attorney, or advance directive.

A trust drafted incorrectly, even with good intentions, can leave a family believing assets are protected when Medicaid would still count them at the time of application.

What Does It Cost to Set Up a Medicaid Asset Protection Trust?

Attorney fees for a Medicaid Asset Protection Trust generally range from $2,000 on the low end to $12,000 for more complex estates, with the wide range coming down to a few factors:

• Whether the attorney bundles the trust with a pour-over will, power of attorney, and health care directives, or handles the trust as a standalone document
• How many properties or accounts need to be retitled into the trust’s name
• Geographic location (urban markets generally run higher than rural ones)
• The attorney’s experience level with Medicaid-specific trust drafting, as opposed to general estate planning

Set against the numbers above, roughly $100,000+ a year for nursing home care in many states, a $5,000–$8,000 trust that protects a $300,000 estate is a different kind of expense than it first appears.

Timing: Why Earlier Is Always Better

Because of the 60-month look-back period, the single biggest factor in whether a MAPT actually works is timing, not the quality of the drafting.

The ideal candidate is someone who’s healthy, doesn’t anticipate needing long-term care in the next several years, but wants to get ahead of the possibility. Waiting until after a diagnosis, a fall, or a hospital stay dramatically narrows what planning can accomplish. For anyone who needs Medicaid now or within the next five years, a MAPT typically isn’t the right tool, and other strategies (discussed below) tend to fit better.

Alternatives to a Medicaid Asset Protection Trust

For families who don’t have a five-year runway, or whose total assets fall well under the $100,000 range where a MAPT typically makes financial sense, other approaches include:

• Spending down countable assets on exempt purchases: home repairs, a vehicle, prepaid funeral arrangements, or paying off debt.
• Medicaid Compliant Annuities, which convert a lump sum into an income stream that doesn’t count as a resource, often used by a healthy spouse to protect savings when the other spouse needs immediate care.
• Irrevocable Funeral Trusts, which set aside a fixed amount for burial and funeral costs outside the countable asset calculation.
• Working with a Medicaid planner or elder law attorney on a crisis-planning strategy, which can still meaningfully reduce a family’s out-of-pocket exposure even without five years of lead time.

The Bottom Line

A Medicaid Asset Protection Trust works well for exactly one situation: someone in reasonably good health who wants to protect a home and savings from long-term care costs, and who’s willing to start the clock at least five years before they expect to need that care. Outside that window, or without state-specific legal guidance, the same tool that’s supposed to protect a family’s assets can end up delaying the Medicaid coverage they need.

The five-year look-back period doesn’t start until the trust is funded. The earlier that happens, the more options a family has later.

Talk with a licensed elder law attorney in your state to review your assets, your timeline, and whether a Medicaid Asset Protection Trust fits your situation. Many offer a free initial consultation to walk through the numbers before you commit to anything.

Frequently Asked Questions

What is a Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust used to remove assets like a home or savings from an individual’s name so those assets don’t count toward Medicaid’s eligibility limits, while still preserving them for the person’s chosen beneficiaries.

How does a Medicaid Asset Protection Trust work?

A grantor transfers ownership of assets into the trust, managed by a trustee (someone other than the grantor or their spouse), for the benefit of named beneficiaries, typically the grantor’s children. Because the transfer is irrevocable, Medicaid no longer counts those assets as belonging to the grantor, as long as the transfer happened more than 60 months before the Medicaid application.

What is the Medicaid look-back period?

It’s a 60-month (five-year) window before a Medicaid application during which the state reviews financial records for asset transfers made for less than fair value. Transfers within that window, including funding a MAPT, generally trigger a penalty period of Medicaid ineligibility.

Can I put my house in a Medicaid Asset Protection Trust?

Yes, in most states, and the grantor can typically continue living in the home after the transfer. Michigan is a notable exception, where a home placed in any type of trust is still treated as a countable asset.

Is a Medicaid Asset Protection Trust the same as a living trust?

No. A revocable living trust can be changed or canceled at any time, which means Medicaid still considers those assets under the grantor’s control and therefore countable. Only an irrevocable trust, correctly structured, removes assets from Medicaid’s eligibility calculation.

How much does it cost to set up a Medicaid Asset Protection Trust?

Attorney fees typically range from $2,000 to $12,000, depending on the state, the complexity of the estate, and whether the trust is bundled with other estate planning documents.

What happens if I apply for Medicaid within 5 years of creating the trust?

The state will likely impose a penalty period, a length of time Medicaid won’t cover care, calculated by dividing the transferred asset value by the average monthly cost of nursing home care in that state.

Can Medicaid take assets that are already in an irrevocable trust?

Generally no, as long as the trust was properly drafted, funded more than five years before the application, and the grantor has no ability to reclaim the assets. This is also why properly structured MAPTs are typically protected from Medicaid Estate Recovery after death.

Do I need a lawyer to create a Medicaid Asset Protection Trust?

It’s strongly recommended. Medicaid rules are state-specific and interact with trust law in ways that are easy to get wrong without legal training. An improperly drafted trust can fail to protect assets at all, defeating the purpose of creating one.