When I sit down with families in Brooklyn to discuss their estate planning concerns, one question comes up more than almost any other: "How can I protect what I've worked my entire life to build?" The anxiety in their voices is real, and it's completely understandable. After decades of hard work, paying mortgages, raising children, and saving for the future, the thought of losing everything to nursing home costs can feel devastating.
The short answer to whether you can protect your family's inheritance from Medicaid spend-down is yes—but it requires careful planning, the right strategies, and most importantly, time. Let me walk you through how this works and what you need to know to make informed decisions about protecting your legacy.
Understanding the Medicaid Spend-Down Dilemma
Before we dive into solutions, let's talk about what we're really dealing with. Medicaid, which covers long-term care costs that Medicare doesn't, has strict financial eligibility requirements. In New York for 2025, a single individual can only have $32,396 in countable assets to qualify for nursing home Medicaid. For many middle-income families in Brooklyn, that's less than what they have in their checking account, let alone their life savings.
This is where the "spend-down" comes in. Without proper planning, families are forced to deplete nearly all their assets—selling properties, draining savings accounts, cashing in investments—just to qualify for the care their loved one desperately needs. I've seen families lose homes that had been in their family for generations, college funds evaporate, and inheritances that were meant to provide security for the next generation simply disappear.
But here's what many families don't realize: Medicaid has a five-year "look-back" period. This means that any asset transfers made within five years before applying for Medicaid will be scrutinized. If you transferred assets for less than fair market value during this time, you could face a penalty period where you're ineligible for benefits. That's why starting early is absolutely crucial.
The Power of Medicaid Asset Protection Trusts
One of the most effective tools for protecting your inheritance is a Medicaid Asset Protection Trust, or MAPT. I know the term "irrevocable trust" can sound intimidating, but let me explain how it works in practical terms.
When you establish a MAPT, you transfer ownership of your assets—like your home, savings, or investments—into the trust. Once those assets are in the trust for five years, they're no longer counted as yours for Medicaid eligibility purposes. This means you can qualify for Medicaid benefits while protecting those assets for your children or other beneficiaries.
Let me share a real-world example from my own practice. Mrs. Lee, a widow from Brooklyn, came to see me when she was still healthy and living independently in the home she'd owned for 40 years. She was worried about what would happen if she needed nursing home care down the road. Together, we established a MAPT and transferred her home into it. Six years later, when she did need long-term care, her home was protected. Mrs. Lee received the quality care she needed through Medicaid, and when she passed, her children inherited the family home—just as she'd always hoped.
The key to Mrs. Lee's success was timing. She planned ahead, understanding that the five-year clock needed to start ticking well before she might need care.
How MAPTs Actually Work for Brooklyn Families
Here's what makes a Medicaid Asset Protection Trust so powerful: Once your assets are in the trust and the five-year look-back period has passed, New York's Medicaid program doesn't count them when determining your eligibility. The assets are technically no longer yours—they belong to the trust.
But you might be wondering: "If I don't own the assets anymore, what happens to them?" That's where the structure of the trust comes in. You name beneficiaries—typically your children or other loved ones—who will receive the assets after you pass away. In many cases, you can still receive income generated by the trust assets, though this needs to be structured carefully to avoid affecting your Medicaid eligibility.
For Brooklyn homeowners specifically, this is incredibly valuable. Your home is likely your most significant asset, and for most families, it represents not just financial value but emotional connection and family history. A MAPT allows you to keep that home in the family instead of being forced to sell it or having the state place a lien on it after your death through Medicaid estate recovery.
Other Strategies to Protect Your Assets
While MAPTs are powerful, they're not the only tool in the toolbox. Depending on your situation, other strategies might make sense:
Spousal Protection: If you're married, New York provides significant protections for the "community spouse"—the one who isn't receiving Medicaid. As of 2025, the community spouse can keep up to $157,920 in assets, plus your primary home (up to $1.1 million in equity), one vehicle, and certain other exempt assets. This means your healthy spouse won't be left impoverished while you receive care.
Medicaid-Compliant Annuities: These financial products can convert countable assets into an income stream, potentially helping you meet Medicaid's asset limits while still providing income for a healthy spouse. However, these need to be structured very carefully to comply with Medicaid rules.
Caregiver Agreements: If a family member is providing care for you, a formal caregiver agreement can allow you to compensate them fairly while legitimately spending down assets. This has to be done properly with written contracts and fair market value compensation.
Home Care Medicaid: Many people don't realize that New York offers Medicaid coverage for home care services, not just nursing homes. The look-back period for home care Medicaid is only 30 months (2.5 years) instead of five years, which can provide more flexibility for families who haven't planned as far in advance.
The Realities: What You Need to Know Before You Start
I always want to be honest with families about what to expect. Protecting your assets from Medicaid isn't a magic solution, and it comes with real considerations:
You lose direct control: Once assets go into an irrevocable trust, you can't simply take them back out if you change your mind. This is by design—if you could access the assets whenever you wanted, Medicaid would still count them as yours.
Timing is everything: That five-year look-back period isn't just a suggestion. If you transfer assets into a MAPT and then need Medicaid benefits before five years have passed, you'll face a penalty period where you're ineligible for benefits. The penalty is calculated based on the value of what you transferred divided by the average monthly cost of nursing home care in New York (currently around $13,000-$15,000 per month).
There are costs involved: Setting up a MAPT properly requires working with an experienced elder law attorney. While the upfront cost might seem significant—typically several thousand dollars—compare that to potentially losing hundreds of thousands in assets to spend-down requirements.
Income might still count: Even though assets in the trust aren't counted toward Medicaid eligibility, income generated by those assets might be. This is a complex area that needs careful structuring with your attorney.
When Should You Start Planning?
I had a family come to me recently whose father had just been diagnosed with Alzheimer's disease. They wanted to know if we could protect his assets. Unfortunately, because his condition was already progressing and he'd likely need care within a year or two, a MAPT wasn't going to be helpful due to the five-year look-back. We had to explore crisis planning options instead, which while still valuable, couldn't protect as much.
Compare that to another client who came to me at age 62, healthy and simply thinking ahead. We were able to put a comprehensive plan in place that protected virtually all her assets for her children.
The ideal time to start Medicaid planning is when you're healthy, in your 60s or early 70s, and thinking about the "what-ifs" rather than facing immediate need. That said, even if you're past that point, there are still strategies available—they're just more limited.
What Makes Brooklyn Families' Situations Unique
In my nearly 30 years practicing elder law in Brooklyn, I've come to understand the unique concerns of the families I serve. Many of my clients are first or second-generation Americans who sacrificed enormously to purchase homes and build stability for their families. The thought of losing that—of not being able to pass it on—goes against everything they've worked for.
I also see a strong cultural value placed on caring for aging parents within the family, rather than in institutions. Home care Medicaid planning often resonates more with these families because it aligns with their values while still protecting assets.
Additionally, Brooklyn real estate has appreciated significantly over the decades. Many of my clients purchased modest homes 30, 40, even 50 years ago that are now worth substantial amounts. That home equity is often the primary asset families want to protect, making MAPTs particularly valuable in our community.
Common Misconceptions I Hear Regularly
"I can just give my house to my kids." I hear this constantly, and it makes me wince a bit because while the instinct is right, simply deeding your house to your children creates more problems than it solves. Your children could face capital gains taxes, the house becomes vulnerable to their creditors and divorce proceedings, and you trigger that five-year look-back period anyway. A properly structured trust avoids these pitfalls.
"Medicare will cover nursing home care." Unfortunately, Medicare only covers short-term rehabilitation after a hospital stay, not long-term custodial care. That's why Medicaid planning matters—long-term care is what depletes family savings.
"Planning means I'm giving up." I understand the emotional resistance to planning for potential incapacity or nursing home care. It feels like admitting defeat or inviting bad luck. But I see it the opposite way: Planning is taking control. It's ensuring that if something happens, you've protected your family and maintained your dignity and choices.
Taking the First Step
If you're reading this and thinking about your own situation, here's what I'd recommend: Start by taking inventory. What assets do you have? What are your goals for those assets? Who do you want to inherit them? Then, consider your timeline. Are you planning proactively, or is there an immediate need?
At Alatsas Law Firm, we've helped countless Brooklyn families navigate these exact questions. The conversations we have in our office aren't just about legal documents and Medicaid rules—they're about families, legacies, and the futures you want to create for your children and grandchildren.
The beautiful thing about proper planning is the peace of mind it provides. I've had clients tell me they sleep better at night knowing their home is protected, that their life's work won't simply vanish, and that they've taken care of their family in the way they always wanted to.
Yes, you can shield your family's inheritance from Medicaid spend-down requirements—but only if you plan ahead with the right strategies and guidance. The question isn't whether it's possible; it's whether you'll take the steps necessary to make it happen for your family.
Your Next Steps
If this resonates with you and you're ready to explore what asset protection could look like for your specific situation, don't wait. The five-year clock doesn't start until you take action, and every month that passes is a month you could have been building protection for your family.
Consider what Mrs. Lee's children would have lost if she had waited. Think about what your own family stands to inherit—or lose. Then ask yourself: Is now the time to take control of your family's financial future?
What concerns you most about protecting your assets for the next generation? I'd love to hear your thoughts and experiences in the comments below. Every family's situation is unique, and your questions might help others who are navigating similar concerns.
