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Medicaid Planning with Kane & Crowell Attorneys at Law

Irrevocable Medicaid Asset Protection Trusts

As the cost of long-term care continues to rise, many individuals in Tennessee are exploring strategies to protect their assets while ensuring they qualify for Medicaid benefits. The Irrevocable Medicaid Asset Protection Trust (IMAPT) is an effective tool for achieving this. We can help you safeguard your assets by explaining this special type of trust, how it functions, its benefits, and the specific considerations for Tennessee residents.

What is an Irrevocable Medicaid Asset Protection Trust?

An Irrevocable Medicaid Asset Protection Trust protects your assets from being counted as resources when determining Medicaid eligibility. Once you place assets into this trust, you no longer own them, shielding them from Medicaid’s asset calculation.

Things to Know About Irrevocable Medicare Asset Protection Trusts

  1. Irrevocable. Once established, you cannot alter, amend, or revoke the terms of the trust. This ensures the assets within the trust are no longer considered your property.
  2. Trustee and Beneficiaries. The individual creating the trust (grantor) appoints a trustee to manage the trust assets. The trustee can be a trusted family member, friend, or professional. The beneficiaries are typically the grantor’s children or other heirs.
  3. Medicaid Look-Back Period. Medicaid has a five-year look-back period, meaning it may still count any assets you transfer into an IMAPT within five years of applying for Medicaid towards your resources. And, this could impact your eligibility.

Benefits of an Irrevocable Medicare Asset Protection Trust

  1. Asset Protection. By transferring assets into an IMAPT, you can protect your savings, investments, and property from being depleted by long-term care costs.
  2. Medicaid Eligibility. Properly structured, an IMAPT can help you meet Medicaid’s stringent financial eligibility requirements.
  3. Preservation of Wealth. This trust allows for the preservation of wealth for future generations, ensuring that heirs can inherit assets without paying for your medical care.
  4. Income Production. The trust’s principal is protected and can still generate income for the beneficiaries, potentially providing financial support to your family.

Considerations for Tennessee Residents

  1. State Regulations. Tennessee has specific regulations and guidelines governing Medicaid and asset protection trusts. Working with an attorney experienced in Tennessee Medicaid laws is crucial to ensure compliance.
  2. Look-Back Period. The five-year look-back period is strictly enforced. Therefore, any transfers made during this period can result in a penalty, delaying Medicaid eligibility. Planning well in advance is essential.
  3. Trust Administration. The chosen trustee must manage the trust according to Tennessee law and the terms outlined in the document. This will include maintaining records, filing tax returns, and ensuring the appropriate use of the assets.
  4. Tax Implications. When transferring assets into an IMAPT, tax implications should be considered.

Establishing an IMAPT in Tennessee

Creating an Irrevocable Medicaid Asset Protection Trust involves several steps:

  1. Consult an Attorney. Draft the trust document with an Estate Planning or Elder Law attorney who understands Tennessee Medicaid laws.
  2. Select a Trustee. Choose a reliable and competent trustee to manage the trust.
  3. Fund the Trust. Transfer assets into the trust. This could include cash, stocks, bonds, real estate, and other valuable property.
  4. Adhere to Legal Requirements. Ensure all transfers comply with Tennessee laws and Medicaid regulations to avoid penalties.

Ensuring Your Medicaid Eligibility

An Irrevocable Medicaid Asset Protection Trust can be a powerful tool if you are looking to safeguard your assets and ensure Medicaid eligibility for long-term care. We will help you plan ahead to secure your financial future and provide for your heirs without sacrificing quality care. Our purpose will be to provide expert guidance essential to navigating this type of trust.

Experienced Attorneys in Lebanon, TN, Who Are Here to Help You

At Kane & Crowell, Attorneys At Law Estate Planning. Our experienced attorneys guide you through the complexities of the trust process. We aim to provide solutions that align with your unique circumstances and aspirations. Contact us today to secure your legacy and ensure a prosperous future. Contact us at (615) 784-4800. We look forward to speaking with you.