I remember the call from my neighbor Maria last spring. Her voice was shaking as she explained that her mother had just been diagnosed with Alzheimer's, and the reality of long-term care costs hit her like a freight train. "I don't want Mom to lose everything she worked for," she told me, tears welling up. "But I have no idea where to start."
If you're reading this, you might be feeling that same overwhelming anxiety. The thought of your parents needing long-term care—and the financial devastation that can come with it—is terrifying. In Brooklyn and throughout New York, nursing home costs can exceed $15,000 per month, and that number keeps climbing. Without proper planning, a lifetime of savings can vanish in months.
But here's what I want you to know: you're not powerless. With the right legal strategies and early planning, you can protect your parents' assets while ensuring they receive the quality care they deserve. Let me walk you through what you need to understand about Medicaid planning—and the practical steps you can take today.
Understanding the Medicaid Landscape in New York
Before we dive into strategies, it's crucial to understand how Medicaid works in New York, because the rules here are unique—and they're constantly evolving.
As of 2025, to qualify for Community Medicaid (which covers home and community-based care), a single individual must have income below $1,800 per month and assets under $32,396. For nursing home Medicaid, the financial thresholds are similar, but the planning considerations are quite different.
What catches most families off guard is something called the "look-back period." For nursing home Medicaid in New York, this period extends 60 months—that's five full years—before your parent applies for benefits. During this time, Medicaid scrutinizes every financial transaction to ensure no assets were transferred simply to qualify for benefits. Any gifts, transfers, or sales for less than fair market value during this period can trigger penalties that delay eligibility.
Here's the silver lining: Currently, Community Medicaid (which allows seniors to receive care at home rather than in nursing homes) has no look-back period. Though New York has proposed implementing a 30-month look-back for home care services, it's been postponed multiple times and remains in limbo as of late 2025. This creates a valuable window of opportunity for families who act now.
The Five-Year Rule: Why Time Is Your Most Valuable Asset
Let me be blunt about something many families learn too late: Medicaid planning isn't something you do when your parent is already in crisis. The five-year look-back period means that the most effective strategies require planning well before you think you'll need them.
Think of it this way—if your father transfers his home into a trust today and then needs nursing home care in three years, Medicaid will still penalize that transfer because it happened within the five-year window. But if he does the same planning today and doesn't need care for six years, those assets are protected.
This is why I always encourage families to have these conversations earlier rather than later. Yes, it feels uncomfortable to discuss your parents' mortality and potential decline. But waiting until there's an emergency means losing access to your most powerful planning tools.
The penalty for transfers made during the look-back period isn't just a slap on the wrist. Medicaid calculates a penalty period during which your parent will be ineligible for benefits, leaving the family responsible for the full cost of care. In New York, they divide the amount transferred by the regional rate (around $15,540 per month in 2025) to determine how many months of ineligibility your parent will face.
Medicaid Asset Protection Trusts: Your Strongest Shield
If I could recommend only one planning strategy to families, it would be establishing a Medicaid Asset Protection Trust (MAPT). This legal tool has become the gold standard for protecting assets in New York, and for good reason.
Here's how it works: Your parents transfer assets—typically their home, savings, or investment accounts—into an irrevocable trust. Once the five-year look-back period has passed, these assets are no longer counted when determining Medicaid eligibility. Your parents can continue living in the home (if that's what was transferred) and even receive income from trust investments, but the principal is protected from nursing home costs.
What makes this strategy so powerful? Unlike an outright gift to family members, a properly structured MAPT ensures the assets are managed according to your parents' wishes, protected from creditors and lawsuits, and distributed to beneficiaries after your parents pass away—all while avoiding Medicaid estate recovery.
At Alatsas Law Firm, we've helped countless Brooklyn families implement these trusts successfully. The key is understanding that "irrevocable" doesn't mean inflexible. While your parents do give up direct ownership and control, an experienced elder law attorney can structure the trust with provisions that address common concerns like the need for a change in trustees, distribution of income, and protection against potential family conflicts.
The trade-off is real, though. Once assets go into an MAPT, your parents can't simply take them back out. That's why this strategy works best for families who are genuinely planning for the long term and have other resources to cover immediate needs.
Income Planning: When Your Parents Make "Too Much" for Medicaid
What happens if your mother receives $2,200 per month from Social Security and a pension, but the Medicaid income limit is $1,800? This is where income planning strategies become essential.
One of the most valuable tools in New York is a Pooled Income Trust (also called a Medicaid Payback Trust or (d)(4)(C) trust). These trusts are administered by nonprofit organizations and allow individuals to deposit their excess income each month. The trust then uses these funds to pay for approved expenses like medical bills, insurance premiums, home maintenance, and other costs that improve your parent's quality of life.
The beauty of this approach is that it's available even after your parent applies for Medicaid—no five-year waiting period. Your mother could potentially qualify for benefits within a month or two by enrolling in a Pooled Income Trust.
For married couples, income planning gets more complex but also offers more opportunities. Spousal protections built into Medicaid law ensure that the healthy spouse (called the "community spouse") isn't impoverished when their partner needs nursing home care. The community spouse can retain a higher income allowance and more assets, but navigating these rules requires careful calculation and often the use of spousal annuities or other tools to maximize what both spouses can keep.
Strategic Spending: Making Your Parents' Assets Work for Them
Before you even consider transferring assets or creating trusts, look at what your parents can spend down in ways that improve their lives while also moving toward Medicaid eligibility.
Not all spending is created equal in Medicaid's eyes. Here are some smart ways to use assets:
Home improvements and repairs: If your parents own their home, investing in accessibility modifications, necessary repairs, or improvements doesn't count against them for Medicaid purposes. In fact, it can make aging in place more feasible while reducing countable assets.
Prepaying funeral expenses: Irrevocable funeral trusts or prepaid burial plans are exempt from Medicaid's asset calculations, regardless of amount. This ensures your parents' final wishes are honored while protecting these funds.
Purchasing exempt assets: A more reliable vehicle, household furnishings, or personal items for daily living don't count toward Medicaid's asset limits. If your father is driving a 20-year-old car that's constantly breaking down, buying a dependable newer vehicle is both practical and strategic.
Paying off debts: Credit cards, mortgages, medical bills—eliminating legitimate debts reduces countable assets without triggering penalties.
The key word here is "legitimate." Medicaid's rules are designed to prevent people from artificially impoverishing themselves just to qualify for benefits. Caseworkers can spot questionable spending patterns, so all expenditures should genuinely benefit your parents or satisfy real obligations.
Protecting the Family Home: Your Parents' Most Valuable Asset
For most middle-income families in Brooklyn, the family home represents the single largest asset—and the one with the most emotional value. The thought of losing it to pay for nursing home care is heartbreaking.
The good news is that New York has several provisions that protect the home, but they come with important caveats.
First, understand that while your parent is living, their primary residence is generally exempt from Medicaid's asset calculations regardless of value (though there is an equity limit of $1,072,000 as of 2025). This means your mother can qualify for Medicaid while still owning her home.
The challenge comes after. New York's Medicaid Estate Recovery Program attempts to recoup costs from a deceased recipient's estate, and the home is often the primary target. However, estate recovery is waived in several situations:
-
When a spouse still lives in the home
-
When an adult child who is blind or permanently disabled lives there
-
When an adult child lived in the home for at least two years immediately before their parent entered a nursing home and provided care that delayed institutionalization
Beyond these automatic exemptions, the most reliable way to protect the home is through that Medicaid Asset Protection Trust we discussed earlier. By transferring the home into a MAPT more than five years before needing nursing home care, your parents remove it from their estate entirely, eliminating the risk of estate recovery.
An alternative is establishing a life estate, where your parents retain the right to live in the home for their lifetime while transferring ownership to you or another family member. This partial transfer can offer some protection, though it's generally not as comprehensive as a properly structured trust.
The "Half a Loaf" Strategy: When Time Isn't On Your Side
What if your parent needs nursing home care soon—say, within the next year or two—and you haven't done any planning? Are all these strategies off the table?
Not necessarily. There's an advanced technique known as "half a loaf" planning that can still provide some protection, even with the five-year look-back looming.
Here's the concept: Let's say your father has $200,000 in countable assets and needs nursing home care relatively soon. If he does nothing, he'll spend down all $200,000 paying for care (at roughly $15,000 per month) before Medicaid kicks in—that's about 13 months.
With the half a loaf strategy, your father might gift $100,000 to family members and use the remaining $100,000 to pay for care during the penalty period that gift creates. The math works out so that when the money runs out, the penalty period also ends, and Medicaid coverage begins. The result? Your family has preserved $100,000 instead of losing everything.
This strategy is complex, involves precise calculations based on New York's specific regional rates, and absolutely requires working with an experienced elder law attorney. It's not appropriate for every situation, and if done incorrectly, it can backfire spectacularly. But for families facing an immediate crisis, it's worth exploring.
Document Everything: The Paper Trail That Protects You
Here's something that surprises many families: When your parent eventually applies for Medicaid, the caseworker will request extensive financial documentation—typically five years' worth of bank statements, investment records, property deeds, and documentation for every significant transaction.
Start gathering these documents now. Create a comprehensive file that includes:
-
Bank and investment account statements
-
Deeds and titles to property and vehicles
-
Insurance policies
-
Pension and Social Security information
-
Tax returns
-
Records of any significant gifts or transfers
If there were legitimate large expenses or transfers during the past five years (paying for a grandchild's education, helping a family member in crisis, major home repairs), gather proof of these expenditures. Being able to document the reason for every significant financial transaction will make the application process infinitely smoother.
I've seen applications delayed for months—leaving families in financial limbo—simply because they couldn't produce adequate documentation for a few questionable-looking transactions that were actually completely innocent.
Working With Experienced Legal Guidance
I'll be honest with you: Medicaid planning is one of the most complex areas of elder law. The federal government sets baseline rules, but each state adds its own layers of regulations, and then there are constantly evolving policy interpretations from local Medicaid offices.
What works in Manhattan might not work in Brooklyn. A strategy that was perfectly legal last year might be problematic today. The wrong approach can result in devastating penalties, denied applications, and the loss of assets you were trying to protect.
This isn't the time for DIY legal work or advice from well-meaning friends who "went through this with their parents." Every family's situation is unique, involving different types of assets, family dynamics, health conditions, and goals. You need an elder law attorney who specializes in Medicaid planning, stays current on regulatory changes, and has extensive experience with New York's specific requirements.
At Alatsas Law Firm, we've been helping Brooklyn families navigate these complex waters since 1996. We understand not just the legal technicalities but also the cultural sensitivities and family dynamics that make each situation unique. Our clients often tell us that what they value most isn't just our legal expertise—it's the peace of mind that comes from knowing they've protected their parents while following all the rules.
Taking Action: Your Next Steps
If you're feeling overwhelmed, that's completely normal. Medicaid planning requires confronting uncomfortable realities about aging, illness, and mortality—none of which are easy conversations to have with your parents or siblings.
But here's what I want you to take away from this: taking action now, even small steps, is exponentially better than waiting until crisis strikes.
Start with these immediate actions:
Have the conversation with your parents about their assets, their wishes for care, and their concerns about protecting what they've built. Yes, it's awkward. Do it anyway.
Gather financial documents so you have a clear picture of your parents' complete financial situation.
Consult with a qualified elder law attorney who can evaluate your specific circumstances and recommend strategies tailored to your family's needs and timeline. Most firms, including ours, offer initial consultations where you can ask questions and understand your options without any obligation.
Consider beginning the planning process even if your parents are currently healthy. Remember: the five-year look-back period makes early planning exponentially more effective than waiting.
Review and update regularly. Medicaid rules change, your parents' health and financial situation evolves, and the strategies that made sense five years ago might need adjustment today.
The Peace of Mind You Deserve
Maria, my neighbor whose story I shared at the beginning, took action. She consulted with an elder law attorney within weeks of her mother's diagnosis. Together, they implemented a strategic plan that protected her mother's home and a significant portion of her savings while ensuring she'd qualify for Medicaid when needed.
Two years later, when her mother's condition progressed to the point where she needed full-time care, the planning Maria had done made all the difference. Her mother received excellent care in a quality facility covered by Medicaid, the family home was protected for Maria and her siblings, and they weren't financially devastated by the experience.
"I was so scared when we started this process," Maria told me recently. "But knowing that Mom is taken care of and that we didn't lose everything she worked for—I can't tell you what a weight off my shoulders that is."
That's what proper Medicaid planning can do. It won't make the difficult emotional aspects of your parents' aging any easier. But it can give you the profound relief of knowing you've done everything possible to protect their legacy while ensuring they receive the care they deserve.
You don't have to figure this out alone. The right legal strategies, implemented at the right time, can make all the difference between financial devastation and security for your entire family.
Your parents worked their whole lives to build something meaningful. With thoughtful planning, you can honor that legacy while making sure they're cared for with dignity in their later years. That's not just smart financial planning—it's one of the most loving things you can do for the people who raised you.
Ready to explore your options? Reach out to a qualified elder law attorney who understands the unique challenges facing Brooklyn families. The conversation you have today could protect everything your parents worked to build—and give your entire family peace of mind for the future.
