Let me share something I see all too often in my practice: families who've worked their entire lives to build a comfortable nest egg, only to watch it disappear within months of entering a nursing home. Just last week, I spoke with a Brooklyn couple in their early sixties who had saved diligently for retirement. When the husband's mother needed nursing home care, they were shocked to learn that it could cost upward of $15,000 per month in our area. Within two years, her life savings were gone.
If you're reading this, you're probably worried about the same thing happening to you or someone you love. And you should be thinking about it—not because the situation is hopeless, but because with proper planning, you can protect what you've worked so hard to build.
Understanding What You're Up Against
Nursing home care in New York is expensive, and it's getting more costly every year. The average monthly cost in Brooklyn can easily exceed $12,000 to $15,000, and specialized memory care facilities can run even higher. For most middle-income families, that kind of expense will drain a lifetime of savings in just a few years—or less.
Many people assume Medicare will cover these costs, but here's the reality: Medicare only covers short-term rehabilitative care in a nursing facility, typically up to 100 days under specific conditions. For long-term nursing home care, you're looking at either paying out of pocket or qualifying for Medicaid.
That's where asset protection planning becomes crucial. The good news is that New York law provides several legitimate strategies to protect your hard-earned money while still qualifying for Medicaid benefits when you need them.
The Five-Year Look-Back Period: Why Timing Matters
Before we dive into specific strategies, you need to understand the single most important rule in Medicaid planning: the five-year look-back period. When you apply for Medicaid coverage for nursing home care in New York, the state will examine every financial transaction you've made over the previous 60 months.
Any assets you gave away or transferred for less than fair market value during this period could result in a penalty—a period of time when you're ineligible for Medicaid benefits. The penalty is calculated by dividing the value of what you transferred by the average monthly cost of nursing home care in New York.
Here's what this means in practical terms: if you transfer $150,000 into an asset protection trust today and need nursing home care in three years, you'll face a penalty period. But if you wait until five years have passed since the transfer, those assets are protected and won't affect your Medicaid eligibility.
This is why I always tell clients: the best time to start planning was five years ago. The second-best time is right now.
Proven Strategies to Protect Your Assets
Medicaid Asset Protection Trusts (MAPTs)
For most families I work with in Brooklyn and the surrounding boroughs, a Medicaid Asset Protection Trust is the cornerstone of a solid protection plan. A MAPT is an irrevocable trust that removes assets from your name, which means Medicaid won't count them when determining your eligibility—as long as you set up the trust at least five years before applying for benefits.
The beauty of a MAPT is that you can transfer your home, savings, and other assets into the trust while still maintaining some important rights. For example, if you transfer your house into a MAPT, you can continue living there for the rest of your life. You can even receive income from assets in the trust, though you give up direct control over the principal.
I recently helped a Staten Island family place their two-family home into a MAPT. They continue to live on one floor and collect rent from the other, but the property is now protected from nursing home costs. Five years from now, if either spouse needs long-term care, that home won't be touched.
Spousal Protections and the Community Spouse Resource Allowance
If you're married, New York law provides important protections for the spouse who remains at home (called the "community spouse"). The community spouse is allowed to keep a significant amount of assets—in 2026, up to approximately $154,140—without affecting the other spouse's Medicaid eligibility.
Additionally, the community spouse can keep the home, one vehicle, and certain other exempt assets. There are also strategies like "spousal refusal" where the healthy spouse can legally decline to contribute their resources toward the cost of the other spouse's care, potentially preserving even more assets for the family.
Strategic Spending and Asset Conversion
Sometimes the answer isn't hiding assets—it's spending them wisely on things that won't count against you. Medicaid has a list of "exempt" assets that you're allowed to own regardless of value. These include:
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Your primary residence (with some equity limits)
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One vehicle
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Personal belongings and household items
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Prepaid funeral and burial arrangements
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Certain types of life insurance
I've worked with families who used what might otherwise be "excess" assets to make necessary home modifications for accessibility, prepay funeral expenses, pay off debt, or purchase a reliable vehicle. These expenditures improve quality of life while reducing countable assets for Medicaid purposes.
Life Estates and Other Transfer Strategies
A life estate allows you to transfer ownership of your home to your children or other beneficiaries while retaining the right to live there for the rest of your life. After the five-year look-back period passes, the home is protected from Medicaid recovery, yet you maintain your residence and even some tax benefits.
There are other strategic transfer options as well, including Medicaid-compliant annuities and certain types of gifts, but these require careful structuring to avoid triggering penalties. Each family's situation is unique, and what works for one household might not be appropriate for another.
Why Professional Guidance Is Essential
Here's something I want to be absolutely clear about: Medicaid planning is complex, and the stakes are incredibly high. Making a mistake—transferring assets at the wrong time, using the wrong type of trust, or failing to properly document transactions—can cost your family tens or even hundreds of thousands of dollars.
The Medicaid rules change periodically, and New York has some specific requirements that differ from other states. Working with an experienced elder law attorney who understands these nuances and stays current with the latest regulations isn't just helpful—it's essential.
At Alatsas Law Firm, I've spent nearly 30 years helping Brooklyn families navigate these exact challenges. I understand the cultural values and family dynamics that matter to the communities in Brooklyn, Queens, and Staten Island, and I work to create plans that protect your assets while honoring your family's wishes and values.
Start Planning Today
The most common regret I hear from families is: "I wish we had started planning sooner." Whether you're currently healthy and planning ahead, or facing an immediate need for care, there are strategies that can help protect at least some of your assets.
Don't wait until a health crisis forces your hand. The five-year look-back period means that the protection you put in place today will serve you best in the future. And even if you're already within that five-year window, there are still crisis planning strategies available that can preserve some of your life's work for your family.
Your hard-earned savings represent years of sacrifice, discipline, and dreams for your family's future. With thoughtful planning and the right legal strategies, you can ensure that your money serves your family—not just the nursing home.
What questions do you have about protecting your assets? Have you started your Medicaid planning, or are you still trying to figure out where to begin? I'd love to hear your thoughts and concerns in the comments below.
