Most people have heard scary stories about a family losing all their wealth to a nursing home, and I have seen a few examples myself. Planning ahead can protect you, and the Medicaid Asset Protection Trust ("MAPT") is a powerful tool to protect your wealth. But how does it work?
First, we have to understand that nursing home care and other long-term care is only paid for by Medicaid, special long-term care insurance, or "private-pay" (which means your own money). Standard health insurance policies and Medicare do not pay for nursing home care. Medicaid will pay for it, but Medicaid has income and resource limits, which means, if you have too much money, they will require you to spend your money first ("private pay") before Medicaid will start paying the bill. A nursing home in Western New York can cost approximately $14,000 per month. Your life savings can be drained quickly at that rate.