A Medicaid asset protection trust is an irrevocable trust that holds savings or a home so Medicaid may stop counting them when it decides eligibility for long-term care. An elder-law attorney drafts it and times the transfers into it. Federal law treats the part of the trust that could never be paid to the person as assets the person disposed of, so timing against the look-back bears on whether a penalty follows.
Most people searching for this kind of trust are not doing abstract estate planning. A parent's memory is slipping, or a husband or wife has had a fall and the rehab stay is turning into something longer, and the question at the kitchen table is whether the savings and the house can survive the cost of care, and what the spouse still at home will have to live on. This page walks through how these trusts work under federal Medicaid law, why the timing matters so much, and where each state's own rules take over.
What a Medicaid Asset Protection Trust Is
A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust set up to hold assets so they are not counted as available resources for Medicaid long-term-care eligibility. A countable asset is an asset Medicaid counts against its eligibility limit. An exempt asset is one it does not count.
The key word is irrevocable. Federal law, 42 U.S.C. § 1396p(d), sets the trust rules every state follows for a trust that the person or the person's spouse established (other than by will), or that someone acting for or at the direction of either established, using the person's assets. For a revocable trust, the whole trust counts as the person's resource, because the person can take it back. Payments from it to the person count as income. Any other payments from it count as transfers.
An irrevocable trust is treated differently, but only to the extent the person gives up access. Any part of the trust that could be paid to the person under any circumstances still counts as theirs. The part that could never be paid to them is treated as a transfer of assets on the date the trust is set up, or on the later date payment to them was cut off. The statute applies these rules regardless of the trust's purpose or the trustee's discretion, except for the trusts listed in 42 U.S.C. § 1396p(d)(4). Those include, each with its own conditions such as repayment to the State from amounts remaining at death, a trust for a disabled individual under age 65, certain pooled trusts for disabled individuals managed by a non-profit association, and, in certain States, a trust composed only of pension, Social Security and other income.
That is why drafting matters. A trust where the person keeps the right to revoke it, amend it to reach principal, or take principal back does not do what a MAPT is meant to do.
The Look-Back Period and How Transfers Into a MAPT Are Treated
The look-back period is the window before a Medicaid application during which the agency reviews gifts and other transfers. Federally, it is 60 months for any transfer made on or after February 8, 2006, under 42 U.S.C. § 1396p(c)(1)(B)(i). For someone in a nursing home, the look-back runs back from the first date the person is both institutionalized and has applied.
A penalty period is a stretch of time when Medicaid will not pay for nursing-facility care, an equivalent level of institutional care, or certain home and community-based waiver services. It is based on the value of assets given away for less than fair market value. Under 42 U.S.C. § 1396p(c)(1)(D)(ii), a penalty starts on the later of two dates. One is the first day of a month during or after which assets were transferred for less than fair market value. The other is the date the person is eligible for Medicaid and would otherwise be receiving institutional-level care on an approved application, but for the penalty. Either way, the start does not occur during any other period of ineligibility under that subsection.
That second date is what makes timing so important. The penalty clock does not start until the person is in care and otherwise eligible. So a transfer into a MAPT made four years before applying starts its penalty under the same rule as one made last month. Age within the window earns no discount on when the penalty starts. Only a transfer made before the look-back window falls outside it.
Not every transfer is penalized. A transfer to the person's spouse carries no transfer penalty, under 42 U.S.C. § 1396p(c)(2)(B)(i). Under 42 U.S.C. § 1396r-5(f), resources moved to a community spouse under a court support order are also outside the transfer rules. The statute lists other exceptions too.
Each state runs its own program, so how a state applies the look-back depends on that state's current rules. For related reading, see Medicaid crisis planning.
What an Elder-Law Attorney Does in MAPT Planning
In MAPT planning, the elder-law attorney's work usually follows a sequence. It starts with mapping every asset and how it is titled. Next comes sorting countable assets from exempt ones under the state's rules. Then come the timing questions against the look-back. Only after that is the trust document drafted. The last step is retitling accounts, deeds and other property into the trust so the transfers actually happen.
For married couples, the work also covers spousal-impoverishment protections. The community spouse is the husband or wife who stays at home while the other spouse gets institutional care. What that spouse keeps can change whether a trust makes sense at all, and in what amount.
The planning also looks at estate recovery. That is the process by which a state seeks repayment of long-term-care costs from a deceased Medicaid recipient's estate. More on what a Medicaid planning attorney does is on a separate page.
Medicaid Asset Protection Group is not a law firm and gives no legal advice. It provides information and facilitates inquiries. This page covers Medicaid for long-term care only. It does not cover Medicare, private long-term-care insurance or veterans' benefits.
How the Home Is Treated Under Medicaid Long-Term-Care Rules
Federal law does not exempt a home whatever its value. Under 42 U.S.C. § 1396p(f), a person whose home equity is above a set limit cannot get Medicaid coverage for long-term-care services. That limit does not apply when a spouse, a child under 21, or a blind or disabled child is lawfully residing in the home.
For 2026, the federal home-equity limits are a minimum of $752,000 and a maximum of $1,130,000. These figures appear in the 2026 standards chart of the CMS 2026 standards bulletin. A state's limit falls within that range, depending on that state's current rules.
Even when a home is exempt during life, it can be reached by estate recovery after the owner dies.
Whether a MAPT can hold the home, and what that changes, depends on the state's rules, on who lives in the house, and on how the trust is written. Moving a house into an irrevocable trust can be a transfer that falls inside the look-back, subject to the exceptions in 42 U.S.C. § 1396p(c)(2). For a related discussion of reducing countable assets, see Medicaid spend-down.