📌 Don’t Let the State Take Your Home
Many Brooklyn homeowners mistakenly believe that once they qualify for Medicaid, their home is safe. But that’s not always the case.
Under New York law, Medicaid has the right to place a lien on your home or seek estate recovery after you pass away—especially if you've received long-term care services.
At Alatsas Law Firm, we help New York families legally protect their homes by using irrevocable trusts. This blog explains how a trust can keep your most valuable asset safe from Medicaid and ensure it passes to your loved ones—not to the state.
🧾 What Is a Medicaid Lien?
When someone over 55 receives Medicaid benefits for long-term care—such as in-home aides or nursing home services—New York State can try to recover the cost of that care after the recipient dies.
This process is called estate recovery, and it often targets:
- Your primary residence
- Jointly owned property
- Real estate left in your name alone
If no protections are in place, your family may be forced to sell the house to pay back Medicaid.
📌 This isn’t just theoretical. Estate recovery claims in Kings County routinely exceed six figures.
🚫 Common Misconceptions
|
Myth |
Reality |
|
“I qualified for Medicaid, so my home is safe.” |
Medicaid won’t take your home while you’re alive—but it may after you pass. |
|
“I added my kids to the deed—problem solved.” |
Adding children to the deed can trigger gift taxes and won’t protect against a lien. |
|
“I have a will leaving the house to my son.” |
A will does not avoid probate or shield assets from estate recovery. |
🏠 Why Your Home Is At Risk
The average home in Brooklyn is worth $700,000 or more. If it’s in your name when you pass:
- Medicaid may file a lien against the property
- Your heirs may have to sell it to satisfy the debt
- The family loses generational wealth
Luckily, there’s a legal way to prevent this—using a Medicaid Asset Protection Trust (MAPT).
🔐 What Is a Medicaid Asset Protection Trust?
A Medicaid Asset Protection Trust (MAPT) is a type of irrevocable trust that allows you to transfer your home (and potentially other assets) out of your name and into the trust—protecting it from Medicaid estate recovery.
Key features:
- You can live in the home for life
- You keep any property tax exemptions (STAR, Enhanced STAR, etc.)
- Your children or beneficiaries inherit the property without probate
- After 5 years, the home is protected from nursing home Medicaid
- After 2.5 years, it may be protected from home care Medicaid
🔗 Learn more about qualifying for Medicaid in NY »
🧠 How does the Five-Year Look-Back Work?
When applying for nursing home Medicaid, New York imposes a 5-year look-back period. This means:
- Any transfers made within 5 years may result in a penalty period
- The trust must be set up and funded at least 60 months before applying for institutional care
Planning ahead is key. The earlier you create a MAPT, the sooner your home becomes fully protected.
"Establishing a Medicaid Asset Protection Trust is a strategic approach to secure your assets while ensuring eligibility for Medicaid benefits. This trust allows individuals to preserve their financial legacy for future generations, providing peace of mind and financial security." – Theodore Alatsas, Esq., Experienced Medicaid Planning Attorney in Brooklyn
📌 Timing is everything—this is not a tool for last-minute crisis planning.
🏘 What Assets Can You Put Into the Trust?
The most common assets protected in a MAPT include:
- Your primary residence
- Vacation homes or rental properties
- Savings or investment accounts (with caution)
- Business interests (in some cases)
We typically recommend starting with the home, since it’s often your most vulnerable and valuable asset.
⚖️ What Happens After You Transfer the Home to the Trust?
Once you place your home in a Medicaid trust:
- You still live there and maintain full use
- You don’t lose property tax benefits
- You name your children or heirs as the beneficiaries
- The home avoids probate after death
- It is not counted as part of your estate for Medicaid purposes (after 5 years)
This gives you the best of both worlds: security during your life and protection for your family after.
🛡 Who Controls the Trust?
You choose a trustee—usually an adult child, relative, or trusted friend. You cannot be the trustee yourself, but you can:
- Retain the right to live in the home
- Control how property taxes are paid
- Remove and replace trustees if needed
- Set detailed instructions about selling or maintaining the property
We carefully draft trust documents to ensure you maintain maximum control within legal limits.
📍 Brooklyn Case Study: Saving the Family Home from Medicaid Recovery
Evelyn, a 72-year-old widow from Midwood, came to us after seeing a friend’s home lost to a Medicaid lien.
We helped her:
- Create a Medicaid Asset Protection Trust
- Transfer her $950,000 brownstone into the trust
- Retain her Enhanced STAR exemption
- Name her two sons as beneficiaries
Five years later, she needed long-term care—but her house was off limits to Medicaid. When she passed, her sons inherited the home without going through probate or losing it to the state.
🔍 Can You Still Sell the Home If It’s in the Trust?
Yes—your trustee can sell the home with your consent. Proceeds can be:
- Reinvested into another property within the trust
- Held in the trust for your benefit
- Used to pay for care (without triggering Medicaid penalties)
We help structure the trust to allow this flexibility without losing Medicaid protections.
❌ What Not to Do
- Don’t gift the house outright to your children. This creates tax problems and exposes the home to their creditors or divorce.
- Don’t rely on joint ownership alone. It won’t protect the property from Medicaid recovery.
- Don’t wait until you’re already in a nursing home. By then, it’s likely too late for a trust to help.
🧾 Other Tools to Use Alongside a Trust
- Power of Attorney: Ensures someone can manage finances
- Health Care Proxy: Allows someone to make medical decisions
- Will: For any assets not included in the trust
- Living Will: Clarifies end-of-life care decisions
🔗 Learn more about essential estate planning documents »
💬 Real Client Testimonial
“Teddy helped me set up a Medicaid trust so my home wouldn’t be taken if I needed care. I now sleep better knowing my daughter will inherit the house no matter what.”
— Harold M., Bay Ridge
🏁 Protect Your Brooklyn Home Before It’s Too Late
Your home is your legacy. With proper planning, you can ensure it stays in your family—and out of the hands of Medicaid or creditors.
At Alatsas Law Firm, we’ve helped hundreds of New York homeowners:
- Preserve their property
- Qualify for Medicaid
- Protect their family’s inheritance
📍 Serving all of Brooklyn, including Gravesend, Park Slope, Dyker Heights, Sheepshead Bay, and more.
📞 Call (718) 233-2903 or
🔗 Schedule your Medicaid trust consultation »
