Medicaid Planning

Medicaid planning involves using legal strategies to help you qualify for Medicaid benefits while protecting your income, assets, and property.

This process often includes creating a trust, changing how assets are titled, and making sure your financial decisions meet federal and state Medicaid rules. The goal is to ensure you can afford long-term care without depleting your life savings.

Many people assume that Medicare covers long-term care, but that is not the case. Medicare may pay for a short period of rehabilitation in a skilled nursing facility, but it does not cover extended stays or in-home care.

Medicaid, on the other hand, can provide long-term coverage for those who qualify based on income and asset limits.

Without Medicaid, you may be responsible for paying out of pocket for nursing home care or a home health aide. These expenses can quickly consume your resources if you do not have a plan in place.

The best time to start Medicaid planning is well before you need care. In New York, asset transfers made within five years of applying for institutional Medicaid can result in a penalty period, which delays your eligibility. This is often referred to as the “look-back” period.

Planning in advance allows you to reposition or protect your assets before they affect your eligibility. However, if you are already facing a health crisis or nearing the need for care, it is still worth speaking with an attorney.

There may be immediate planning options available to protect part of your estate even if you are applying under pressure.

One such option is unique to New York, community Medicaid which has no look back period. Community Medicaid will provide care in your own home and New York State will pay for it.  But again, advance planning is most important.  Speak with an experienced Elder Law attorney.

Transferring assets directly to your children can cause serious problems if not done properly. Medicaid reviews your financial history for transfers made below fair market value within the look-back period.

These gifts can trigger a penalty, delaying your ability to receive benefits and leaving you responsible for care costs during that time.

A better approach may involve creating a Medicaid Asset Protection Trust, which allows you to transfer ownership of certain assets in a way that protects them after a waiting period. This must be done with legal guidance to meet Medicaid’s strict requirements.

A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust used to hold assets such as a home, savings, and investments. Once assets are placed in this trust, they are no longer counted toward your Medicaid eligibility after the look-back has passed.

This type of trust lets you protect family wealth while still allowing Medicaid to cover future care costs. The trust must be carefully drafted and administered to meet New York rules, so you should only create one with the help of a qualified estate planning attorney.

Your primary residence is treated differently from other assets in Medicaid calculations, but that does not mean it is automatically safe. While it may be exempt during your lifetime under certain conditions, the state can pursue estate recovery after your death to collect the cost of benefits.

Medicaid can place a claim against your home during probate unless the property is transferred to a qualified individual or held in a properly structured trust. Planning ahead can protect the family home and keep it out of Medicaid’s reach.

No. Medicaid planning is used by individuals and families with a wide range of financial situations.

Even if you have significant assets, long-term care costs can quickly erode your savings. Planning allows you to preserve what you have worked hard to earn while qualifying for benefits that help cover essential care.

Many Manhattan clients seek Medicaid planning to protect property, preserve inheritances, and reduce the burden on spouses or adult children.

Yes. If you are married, your spouse may be allowed to keep a certain portion of your combined income and assets, depending on the circumstances. This is designed to prevent one spouse from becoming impoverished while the other receives care.

Still, the rules are complex. Working with an attorney helps you structure your finances in a way that meets eligibility requirements while preserving resources for your spouse.