Medicaid Lawyer Queens, Brooklyn & NYC

Medicaid Planning

Medicaid planning is the work of arranging what you own so that long-term care gets paid for without your family losing the house and the savings behind it. It is lawful, it is done in the open, and the rules reward families who start early far more than families who start in a crisis.

Everything below is what that work actually consists of. If you would rather talk it through than read it, call (347) 766-2685 — the consultation is free.

Medicaid Asset Protection Trust (MAPT) - Always Irrevocable!

A Medicaid Asset Protection Trust is the main vehicle New York families use to protect a home and savings from long-term care costs. You transfer assets into the trust, you give up ownership of them, and once the look-back period has run they are no longer counted against you when Medicaid decides whether you qualify.

It has to be irrevocable, and that is the part people hesitate over. They are right to take it seriously: once it is signed and funded you cannot simply undo it and take the principal back. But that permanence is not a side effect — it is the entire reason Medicaid stops treating the assets as yours. A revocable trust achieves nothing here, because anything you can take back is still counted as available to you.

What a well-drafted trust does preserve is considerable. You can go on living in the house. You can keep the income the trust produces. You can usually keep the right to change who eventually inherits — and that clause matters more than it sounds, because it is often what preserves the step-up in cost basis for your children on a later sale. Leave it out and the family can face a capital gains bill that dwarfs whatever the trust saved.

The drafting decisions — who serves as trustee, which assets go in and which stay out, whether income is payable to you, who the remainder beneficiaries are — each carry a Medicaid consequence and a tax consequence, and they do not always point the same way. This is where a template downloaded online costs far more than it saves. We set these up as part of our Medicaid planning and asset protection practice, and we will tell you plainly if we think the trade is not worth it for you.

Which Assets Medicaid Counts

Before anything is moved, everything gets counted. Some assets are countable for Medicaid purposes, some are exempt, and some are treated differently depending on how they are titled and who else is named. Getting that wrong at the start undermines every step that follows.

We go through the house, the bank and brokerage accounts, retirement accounts, life insurance with cash value, any business interest, and anything held jointly with a child or a sibling. Joint accounts are where families are caught out most often — the entire balance is frequently presumed to belong to the applicant unless it can be shown otherwise, even where the money was never theirs.

Medicaid Spend-Down

If your assets sit above the limit, they have to come down before Medicaid will pay. The question is what they come down on. Spending on things that benefit you and your family is treated very differently from giving money away, and that difference decides whether you are penalised.

Permitted spending generally includes paying off a mortgage, necessary home repairs and modifications, a reliable vehicle, prepaid funeral arrangements, and outstanding debts and medical bills. Gifting to relatives is the route families reach for instinctively, and it is the one most likely to create a penalty period. Speak to us before you move money, not afterwards — undoing a transfer is far harder than structuring one.

Spousal Protection

When one spouse needs care and the other does not, the healthy spouse is not expected to be left with nothing. Federal and New York rules set aside a protected amount of income and resources for the spouse who remains at home, and those figures are adjusted every year.

New York also recognises spousal refusal, which is not available in every state and can be a powerful tool where the standard allowances fall short. It carries consequences of its own and is not right for every couple, so we assess it as part of the plan rather than treating it as a default setting.

Protecting the Family Home

The house is usually what families are most frightened of losing, and it is usually the asset that can be protected — provided the planning is done in time. A primary residence is treated differently from other assets, and there is more than one route: a trust, a life estate deed, or a transfer to a protected class of relative such as a caretaker child or a sibling with an equity interest.

Each route carries different consequences for tax, for control, and for what happens if you later want to sell. There is no single right answer, and anyone who offers you one without looking at your deed and your family circumstances is guessing.

Medicaid Look-Back Period

For nursing home Medicaid, New York reviews the five years (60 months) before your application. Assets given away inside that window create a penalty period during which Medicaid will not pay, calculated from the value transferred.

For home care and other community Medicaid the position is different, and widely misunderstood. New York passed a 30-month look-back for community Medicaid in 2020, but it has never been implemented and still awaits federal approval. That does not make gifting safe. The statute's own start date is backdated to October 2020, which means transfers made today could still be counted if the rule is eventually switched on. Anyone telling you home care has no look-back is only half right, and the missing half is the half that costs money.

Medicaid Income & Asset Limits

New York sets income and asset limits that change every year. For 2026, a single applicant is generally limited to $1,836 per month in income and $33,038 in countable assets. Married couples and community spouses are assessed under separate and more generous allowances.

Being over the limit does not mean you are disqualified. Income above the allowance can often be directed into a pooled income trust and still spent on your household bills, and excess assets can frequently be restructured. Over the limit is a planning problem, not a final answer.

Medicaid Estate Recovery

After a Medicaid recipient dies, New York can seek to recover what it paid — but only from assets that pass through the probate estate. The state's attempt to widen that definition to non-probate assets expired in December 2011 and was never revived. Property held in trust, jointly owned property, life estates and accounts with named beneficiaries all fall outside it.

Recovery is also deferred while a surviving spouse is living. In practice this means the same planning that qualifies you for benefits usually removes the exposure to recovery as well — which is the argument for doing it properly the first time. Our Medicaid estate recovery practice handles claims that have already been brought.