Can a Trust Protect Your Home From Medicaid?

For many Georgia families, the home is the most valuable asset they own. It carries financial weight and, often, deep personal significance. So when long-term care becomes a concern and Medicaid eligibility enters the conversation, a natural question arises: can placing your home in a trust keep it safe from Medicaid's reach?

The answer depends entirely on what kind of trust is used and when it is set up.

How Medicaid Evaluates Your Assets

Medicaid is a needs-based program with strict eligibility requirements. To qualify, an applicant's countable assets must fall below a certain threshold. Medicaid reviews an applicant's finances carefully and, in most states, scrutinizes asset transfers made within the five years before the application date — a period known as the look-back period.

If assets were transferred during that window — including into a trust — Medicaid may impose a penalty period during which the applicant is temporarily disqualified from receiving benefits. This is why timing matters as much as the type of trust.

In Georgia, a primary residence is often treated differently from other assets. Homes below a certain equity threshold, or homes occupied by a spouse or qualifying dependent, may be exempt from the asset calculation during the applicant's lifetime. However, Medicaid's Estate Recovery Program can still make a claim against the home after the beneficiary's death to recoup costs paid for long-term care.

Revocable Trusts Do Not Provide Medicaid Protection

A common misconception is that placing a home in any trust offers protection from Medicaid. In reality, a revocable living trust — the most widely used type — does not shield assets from Medicaid.

The reason is straightforward: with a revocable trust, the person who created it retains the power to modify or dissolve it at any time. Because the grantor still controls the assets, Medicaid considers those assets available and counts them against the eligibility limit.

Revocable trusts do serve other valuable purposes — most notably, avoiding probate and streamlining the transfer of assets to heirs. But Medicaid protection is not one of their functions.

Irrevocable Trusts and the Medicaid Asset Protection Trust

An irrevocable trust is a different matter. Once assets are transferred into an irrevocable trust, the grantor gives up ownership and control. Because the assets no longer belong to the individual, they are generally not counted as available resources for Medicaid eligibility purposes.

A Medicaid Asset Protection Trust, commonly referred to as a MAPT, is a specific type of irrevocable trust designed expressly for this purpose. When a home is placed into a MAPT, the grantor relinquishes legal ownership — but the trust can be structured to allow the grantor to continue living in the home for the rest of their life. This means the protection strategy does not require the homeowner to leave their residence.

Additionally, homes held in a properly structured MAPT are generally shielded from Medicaid's Estate Recovery Program, preserving the asset as an inheritance for the next generation.

The Five-Year Look-Back Rule and Why Timing Is Everything

The critical limitation of the MAPT strategy is the five-year look-back period. Because Medicaid reviews asset transfers going back five years from the date of application, a home placed into a MAPT within that window may still be counted — or may trigger a penalty period that delays benefit eligibility.

This means the MAPT must be funded well in advance of when long-term care services are expected to be needed. Waiting until a health crisis arises is often too late. The earlier a family begins this planning, the more flexibility they have and the greater the protection they can secure.

Other Strategies Worth Considering

A MAPT is not the only tool available for families concerned about Medicaid and asset preservation. Depending on the circumstances, other approaches may be appropriate or complementary:

• Certain annuity structures can convert countable assets into an income stream in a way that may preserve Medicaid eligibility

• Caregiver child exemptions may apply in some situations, allowing a home to transfer to an adult child who provided care

• Spousal protections under Georgia and federal law offer specific rights for a community spouse when one partner enters a care facility

Every family's situation is different. What works well in one case may not be appropriate in another, which is why individualized legal advice is essential before taking any action.

Getting the Structure Right

The legal details matter enormously in Medicaid planning. A trust that is improperly drafted or inadequately funded can fail to achieve its protective purpose — or worse, can trigger unintended consequences that compromise both Medicaid eligibility and the estate plan. Working with an attorney experienced in Georgia Medicaid rules and elder law planning ensures the strategy is structured correctly, documented properly, and executed within the required timelines.