At our law firm, we often work with families who are concerned about the rising cost of long-term care and how it might affect their savings and estate. It’s a difficult reality—nursing home care in Michigan can cost over $100,000 per year, and Medicare does not cover long-term custodial care. Medicaid is the government program that helps with these expenses, but qualifying for Medicaid requires you to meet strict financial limits. That’s where Medicaid Asset Protection Trusts (MAPTs) come in. These trusts are a legal tool that allows individuals to qualify for Medicaid while preserving assets for their spouse, children, or other loved ones.

The Medicaid rules in Michigan are complex, and a mistake in planning can lead to costly penalties or ineligibility. Under federal and state law, including provisions in the Michigan Department of Health and Human Services (MDHHS) policy manuals and Michigan Compiled Laws, transferring assets can result in a penalty period if not done correctly or within the proper timeline. A properly drafted and funded Medicaid Asset Protection Trust can help shield your property from being counted against you while preserving your eligibility for long-term care benefits.

What Is A Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust is a type of irrevocable trust designed to remove certain assets from your personal ownership while allowing you to retain some control and benefit. Once the assets are transferred into the trust, they are no longer considered “countable” for Medicaid purposes after a specific period of time. This is known as the five-year lookback period. Under 42 U.S.C. § 1396p(c), any transfers to a trust within five years of applying for Medicaid may trigger a penalty, which delays your eligibility.

In Michigan, MDHHS uses the Bridges Eligibility Manual to determine countable assets. A MAPT helps move assets out of your name in a way that complies with Medicaid’s transfer rules. Once the five-year lookback period has passed, the assets in the trust are protected from being spent down to qualify for care. That means you can preserve a family home, savings, or other property for future generations while still becoming eligible for Medicaid benefits when you need them.

Who Should Consider A Medicaid Asset Protection Trust?

We typically recommend MAPTs for individuals or couples who are thinking ahead—ideally, at least five years before they may need long-term care. If you’re in your 60s or early 70s and healthy, now is the time to plan. Waiting until you are already in a care facility or facing a health crisis limits your options and could lead to asset depletion. If you own a home, have retirement savings, or want to preserve property for your children, a MAPT can be an effective solution.

Even if you’re older or already dealing with a health issue, there are still strategies we can use. However, the earlier you plan, the more options are available to protect what you’ve built.

How Do Medicaid Asset Protection Trusts Work In Michigan?

To set up a MAPT, we draft an irrevocable trust agreement under Michigan law. The trust must clearly state that it is not revocable and that the grantor cannot directly access the principal. Under MCL 700.7501 et seq., the trust is considered a legally recognized instrument for holding and managing property. You can name a trustee—often a trusted family member—who manages the assets according to the terms of the trust. You can also receive income from the trust if structured properly, but not principal.

We then work with you to transfer your assets into the trust. This may include your home, investment accounts, savings, or other property. Once those assets are in the trust, the five-year lookback clock begins. After five years, those assets are no longer considered when determining your eligibility for Medicaid.

Avoiding Common Mistakes

A common mistake we see is waiting too long to begin the process. If someone enters a nursing home within the five-year period, the transferred assets could trigger a penalty period that delays care. Another issue is incorrectly funding the trust. Simply signing a trust agreement is not enough—you must retitle the assets to the trust to gain protection. We make sure that all legal requirements under Michigan and federal law are followed and that your trust is properly funded and documented.

Medicaid Trust Frequently Asked Questions

Can I Still Live In My Home If It’s In A Medicaid Trust?

Yes, if you transfer your home into a properly structured Medicaid Asset Protection Trust, you can still live in the home for the rest of your life. The trust protects the home from being counted as an asset for Medicaid purposes, and after your death, it can pass to your beneficiaries without going through probate.

Can I Be The Trustee Of My Own Medicaid Trust?

No. For the trust to be valid for Medicaid planning purposes, you cannot be the trustee or have direct control over the principal. You must appoint someone else, usually a trusted family member, to serve as trustee. You may, however, retain the right to change the trustee if needed.

What Types Of Assets Can Go Into A Medicaid Asset Protection Trust?

You can place real estate, bank accounts, brokerage accounts, life insurance with cash value, and other non-retirement assets into the trust. We do not typically place retirement accounts like IRAs into the trust, but we work with financial advisors to make sure the plan coordinates with your entire portfolio.

Can I Create A Medicaid Trust After I’m Already In A Nursing Home?

It’s possible, but the planning becomes more limited. If you’re already in a facility or need care soon, we may look at other strategies, such as Medicaid-compliant annuities or partial gifting. However, a MAPT is generally most effective when created well in advance of needing care.

Does A Medicaid Trust Avoid Probate In Michigan?

Yes. Any assets in the trust pass directly to the named beneficiaries according to the terms of the trust, bypassing the probate process. This adds an additional layer of privacy and simplifies estate administration for your family.

Plan Ahead With Boroja, Bernier & Associates

If you’re concerned about protecting your assets from the cost of long-term care, we can help. At Boroja, Bernier & Associates, we create Medicaid Asset Protection Trusts tailored to your needs and compliant with Michigan law. Our goal is to protect your family’s future and give you peace of mind.

We serve clients throughout Oakland County and Macomb County from our offices in Troy and Shelby Township. Contact our Michigan Medicaid planning attorneys by calling 586-991-7611 to schedule a consultation. Let us show you how a Medicaid Asset Protection Trust may benefit you and your loved ones.