Medicaid Asset Protection Trust
Medicaid Asset Protection Trusts in North Carolina
Protect Your Hard-Earned Assets and Qualify for Medicaid Long-Term Care
When individuals or their loved ones face the prospect of long-term care, the cost can quickly erode a lifetime of savings. In North Carolina, long-term care through Medicaid can help cover nursing home or assisted living costs, but strict income and asset limits apply. Without proper planning, those savings and your family’s inheritance may be at risk. Medicaid Planning Assistance
A Medicaid Asset Protection Trust (MAPT) is an estate planning tool designed to protect assets while positioning you to qualify for Medicaid long-term care benefits — helping preserve your legacy for the ones you love.
What Is a Medicaid Asset Protection Trust?
A Medicaid Asset Protection Trust (MAPT) is a special type of irrevocable trust created during your lifetime. You transfer qualifying assets into the trust, and a trustee (someone you trust) manages those assets according to the trust terms. Because you no longer control or own the assets placed in the trust, Medicaid generally does not count them as part of your personal resources when determining eligibility.
This trust allows you to:
Potentially meet Medicaid’s asset limits while retaining access to income generated by trust assets (under certain terms).
Protect assets from Medicaid Estate Recovery after your death.
Avoid depletion of your estate by long-term care costs.
Why Planning Matters in North Carolina
Medicaid’s eligibility rules include a federal “look-back” period, which in all states — including North Carolina — is 60 months (five years) before you file an application. Transfers of assets for less than fair market value — including to a trust — made within this period may trigger penalty periods of Medicaid ineligibility.
For a MAPT to be effective for Medicaid planning:
The trust must be irrevocable. Revocable or living trusts do not shelter assets from Medicaid’s resource tests.
The trust must be funded and established well in advance (generally more than five years before a Medicaid application).
Without careful timing and proper legal structure, transfers can unintentionally jeopardize eligibility.
What Assets Can Be Protected?
Assets commonly transferred into a MAPT may include:
Primary residence and real estate
Investment accounts and securities
Checking and savings accounts
Other non-retirement assets
Notably:
Retirement accounts such as IRAs and 401(k)s are generally counted as resources for Medicaid once accessible and may require specialized planning.
Certain exempt assets (like a primary home up to a value limit and one vehicle) may already be treated differently under Medicaid rules — but without trust planning, estate recovery may still apply after death.
Medicaid Estate Recovery and Legacy Protection
Even when Medicaid covers long-term care costs, North Carolina law permits the state to pursue Medicaid estate recovery after a beneficiary dies — often against the home or other remaining assets.
A properly structured MAPT can remove assets from your probated estate, helping protect them from this recovery process and preserving more of your legacy for your family.
Is a Medicaid Asset Protection Trust Right for You?
A MAPT is not one-size-fits-all. It must be tailored to your circumstances, goals, and timing — and set up with precise legal language and compliance with both federal Medicaid rules and North Carolina regulations.
Who it may benefit:
Individuals younger than 65 who plan ahead.
Those with significant non-exempt assets.
Families intent on preserving a legacy while qualifying for Medicaid care down the road.
Who it may not be suitable for:
Individuals who need Medicaid immediately or soon without five years to satisfy the look-back period.
Why Work With an Elder Law and Estate Planning Attorney
.Medicaid rules and trust laws are complex and change over time. Mistakes can lead to ineligibility, penalties, or lost protections. Our experienced attorneys will:
Analyze your complete financial and family situation
Explain options including MAPTs and alternatives
Draft legally sound trust documents
Work with your financial advisors for integrated planning
Take the Next Step.
If you want to protect your assets and position yourself for future Medicaid eligibility, now is the time to plan. Delaying planning until care is needed may leave you with fewer options and higher costs.
Contact us today to schedule a consultation and get a personalized Medicaid asset protection strategy tailored to your goals.
Frequently Asked Questions
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A Medicaid Asset Protection Trust is a special type of irrevocable trust designed to help protect certain assets—such as a home or savings—while planning for future Medicaid eligibility. When properly structured, assets placed into the trust are generally not counted when Medicaid determines eligibility for long-term care benefits.
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Yes. Medicaid Asset Protection Trusts are permitted in North Carolina when drafted correctly and in compliance with federal Medicaid rules and North Carolina Medicaid regulations. However, they must be carefully designed—improper trust language or timing can cause serious eligibility problems.
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A revocable living trust does NOT protect assets from Medicaid. Because you retain control over assets in a revocable trust, Medicaid still considers them available resources.
A MAPT, by contrast, is irrevocable, meaning you give up certain control in exchange for asset protection and potential Medicaid eligibility benefits. -
Common assets that may be transferred into a MAPT include:
A primary residence
Additional real estate
Non-retirement investment accounts
Checking and savings accounts
Brokerage accounts
Some assets—such as retirement accounts—require special planning and are often handled outside the trust.
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You will give up direct ownership and control, but a properly drafted MAPT can still allow:
Continued use of your home
Income generated by trust assets to be paid to you (depending on structure)
Control through a trusted third-party trustee
The goal is protection—not hardship—while meeting Medicaid’s rules.
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In many cases, yes. North Carolina may seek reimbursement for Medicaid benefits after death through estate recovery, often against the home. Assets held in a properly structured MAPT are typically outside the probate estate, which can help protect them from recovery.
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MAPTs are often appropriate for:
Individuals planning ahead for possible long-term care
Homeowners who want to protect their house for family
Gen-X adults planning for aging parents
Married couples concerned about protecting a spouse
They are not one-size-fits-all and should be tailored to each family.