How to Protect Your Long Island Home From Nursing Home Costs

For most families in Nassau and Suffolk County, the house is the single largest asset they own — and the one most at risk. Not from foreclosure, and not from the market, but from the cost of long-term care. A year in a New York nursing home now runs well over $180,000, and on Long Island the monthly bill commonly exceeds $15,000. Medicaid will pay for that care, but only after it counts your assets — and your home is on the list.

The good news: with planning done early enough, you can keep your Long Island home in the family and still qualify for Medicaid when the time comes. The tool that does it is an irrevocable Medicaid Asset Protection Trust (MAPT), and the most important factor in whether it works is when you set it up.

As a Long Island estate planning attorney with 27 years of experience, I help families across Nassau and Suffolk County build the trusts, wills, and powers of attorney that protect a home before a health crisis turns it into a creditor's target. Here is how the pieces fit together.

Why Your Home Is at Risk in the First Place

When someone needs nursing-home care and applies for institutional Medicaid in New York, the state looks at two things: income and resources. Your primary residence is normally treated as an exempt resource while you are alive and intend to return home — so it usually does not block eligibility on day one.

The problem comes later. Under New York Social Services Law § 369 and federal law, Medicaid has the right to recover what it paid for your care from your estate after you die. That is called Medicaid estate recovery, and the home that passed through your probate estate is exactly what they recover against. In practice, this means the state can place a claim — often a lien — against the house your children expected to inherit.

A Medicaid Asset Protection Trust solves this by changing who owns the home well before any of this happens.

What a Medicaid Asset Protection Trust Actually Does

A MAPT is an irrevocable trust authorized under New York's Estates, Powers and Trusts Law (EPTL). You (the "grantor") transfer the deed to your home into the trust — a step our Real Estate Law practice handles routinely. Once the trust has owned the home long enough to clear the look-back period, that home no longer counts as your resource for Medicaid and no longer passes through your probate estate — so it is shielded from both Medicaid eligibility rules and estate recovery.

Crucially, a properly drafted New York MAPT lets you keep the parts of ownership that matter most to you:

• You keep the right to live in the home for life. The trust reserves a life use, so no one can put you out of your own house.
• You keep the income. If the home is ever sold, you can be the income beneficiary of the trust.
• You keep your STAR and senior property-tax exemptions, because you retain a life interest.
• You preserve the step-up in basis at death. When the trust is drafted so the home stays in your taxable estate for tax purposes (using a retained limited power of appointment), your children inherit it at its date-of-death value — which can eliminate tens of thousands of dollars in capital-gains tax if they later sell.

What you give up is control over the principal: you cannot sell the home and pocket the proceeds yourself, and you generally cannot revoke the trust on your own. That trade-off is the entire point — it is what removes the asset from Medicaid's reach.

The 5-Year Look-Back: Why Timing Is Everything

Here is the rule that decides whether all of this works.

When you apply for institutional (nursing-home) Medicaid in New York, the state reviews every transfer you made during the five years (60 months) before your application. This is the five-year look-back, governed by Social Services Law § 366 and 18 NYCRR § 360-4.4. Any uncompensated transfer in that window — including funding a MAPT — creates a penalty period during which Medicaid will not pay for your care.

That is why a MAPT is a plan-ahead tool, not an emergency tool. Transfer the home into the trust today, and after 60 months it is fully protected. Wait until a parent is already declining and the clock has not run, and you may face a penalty.

New York has also enacted a separate 30-month look-back for Community Medicaid (the home-care program that pays for aides so a person can stay at home). Its start date has been postponed repeatedly, but it is expected to take effect — which is one more reason not to wait. The cleanest position is to have your home protected and your documents in place before you need any kind of care.

Why a Trust Beats Simply "Putting the Kids on the Deed"

The most common mistake I see on Long Island is a parent who adds an adult child to the deed, or signs the house over outright, thinking it solves the Medicaid problem. It usually creates new ones:

• It exposes the home to your child's risks — their divorce, their creditors, their lawsuit, their bankruptcy. Your house is now legally entangled with their life.
• It is still a transfer that triggers the same five-year look-back, so it buys you nothing on timing.
• It can cost your family in capital-gains tax, because an outright gift carries over your low cost basis instead of getting the step-up at death.
• It surrenders your control completely — you can't undo it, and you've made yourself a guest in your own home.

A properly structured MAPT accomplishes the protection goal while avoiding every one of those traps.

The Documents That Need to Go With the Trust

A trust does not stand alone. For the plan to hold up if you become ill or incapacitated, you also need:

• A durable power of attorney with a Statutory Gifts Rider. Under New York General Obligations Law § 5-1501, a standard power of attorney does not authorize gifting or Medicaid-planning transfers above the statutory limit. Without the Gifts Rider, your agent cannot do the very planning you'd want done if you suddenly couldn't act for yourself.
• A health care proxy and living will, so the person you trust can make medical decisions and your wishes about end-of-life care are honored.
• A will, even with a trust in place — it names a guardian for any minor or disabled dependents and acts as a backstop for any assets that never made it into the trust.

When these documents are aligned, your family avoids the two worst outcomes: a forced sale of the home to pay for care, and a paralyzing trip to court because no one had legal authority to act. If a dispute later arises over the trust or estate, our Trust & Estate Litigation practice can step in to defend the plan you put in place.

Where This Gets Handled on Long Island

Probate and estate administration for Nassau County residents run through the Nassau County Surrogate's Court in Mineola, and for Suffolk County residents through the Suffolk County Surrogate's Court in Riverhead. A well-funded MAPT keeps your home out of those proceedings entirely — which means less delay, less cost, and far less exposure for the people you leave it to.

The Bottom Line

If you own a home in Nassau or Suffolk County and you want it to pass to your family instead of a nursing home, the most important thing you can do is start the clock now. A Medicaid Asset Protection Trust, drafted correctly and funded early, is the difference between keeping the house and losing it.

When you call this office, you speak directly with me — Thomas A. Sirianni, Esq. — not a paralegal or an intake service. If you'd like to talk through whether a trust makes sense for your family, call (516) 314-1343 for a free consultation.