Can I Transfer My Annuity to a Medicaid Asset Protection Trust (MAPT)?

If you're planning for long-term care, you may be wondering whether an annuity can be transferred to a Medicaid Asset Protection Trust (MAPT). The answer is: sometimes — it depends on the type of annuity.

When Can You Transfer an Annuity to a MAPT?

You may transfer an annuity to a MAPT only if all three are true:

1. It’s a non-qualified annuity (funded with after-tax dollars — not IRA/401(k))

2. It hasn’t been annuitized (still in growth/accumulation phase)

3. It’s assignable (the contract allows ownership changes)

If any of these aren’t met, the transfer may be blocked or trigger penalties.

What You Shouldn’t Transfer

Qualified annuities — those inside an IRA or 401(k) — should not be transferred. Doing so counts as a full withdrawal and triggers immediate income tax.

Annuitized annuities also usually can’t be transferred because most are non-assignable.

Will It Trigger Taxes?

Transferring a non-qualified annuity to a MAPT usually does not trigger tax immediately. Taxes will only apply when the annuity pays out in the future — and only on the gains.

Why Does This Matter?

Transferring your annuity to a MAPT:

• Starts the 5-year Medicaid lookback clock

• Helps protect the asset from being counted for future Medicaid eligibility

• Keeps tax deferral benefits if done properly

Contact The Law Office of Jin-Wook Kim, P.C. to update your plan and ensure your digital life is properly accounted for.