Nursing Home Asset Protection FAQs

Since Medicare was established to address the medical needs of seniors, you would assume that the program would cover a stay in a nursing home. Unfortunately, nursing homes provide custodial care, and Medicare will not pay for this type of care.

You may be surprised to hear that seven out of ten people that are over 65 years of age will eventually need living assistance. Just over half of them will require paid long-term care of some kind, and 35 percent will reside in nursing homes.

It is 12 months, but 52 percent of people that receive paid long-term care get the assistance for more than a year. Thirteen percent of individuals that need paid living assistance receive the care for more than five years.

In Manhattan, you can expect to pay over $150,000 for a year in a private room in a nursing home. This is a lot of money to come up with late in your life, and a married couple may be looking at two different sets of nursing home bills.

This may happen if you take no steps in advance to prepare for possible long-term care costs. Fortunately, there is a solution in the form of Medicaid eligibility if you position your assets wisely.

At the time of this writing in 2023, the Medicaid asset limit for an individual is $30,182 and $40,821 for a married couple in New York. You may hear that it is just $2000, and this is true in most states, but New Yorkers get a bit of a break.

Your home is not a countable asset, and Medicaid is not concerned about household items and personal possessions that are not particularly valuable. Wedding rings, engagement rings, and heirloom jewelry are exempt along with one motor vehicle.

You can have $1500 saved for final expenses, and you can have $1500 of whole life insurance. Term life insurance does not have a cash value, so you can have unlimited term life, and prepaid burial plots are not counted.

The answer is yes and no. You can certainly give assets to your children, but you will not necessarily qualify for Medicaid.

Uncompensated transfers trigger a penalty period.  It is a five-year look back period, so you are ineligible for up to 60 months after you divest yourself of assets.

This is a good question, and fortunately, there is a viable solution. You can convey income-producing assets into an irrevocable trust. While you are living independently, you can accept distributions of the trust’s earnings as usual.

Of course, you would not be able to access the principal after you convey resources into the trust. If you apply for Medicaid at least five years after you fund the trust, the assets would not count.

Yes, there is a Medicaid estate recovery mandate. As a solution, you can transfer your home into the trust. You would still be able to live in the home rent-free as usual, but it would not be in your possession. As a result, it would not be part of your estate, so it would be protected.

Yes, in New York there is community Medicaid.  If you qualify, this allows you to stay at home and receive up to 24 hour care paid for by New York State.