Are There Legal Options to Shield Assets from Nursing Home Costs?

The cost of nursing home care in New York can be financially overwhelming for middle-income families in Brooklyn, Queens, and Staten Island. With rates hovering around $171,276 per year in New York City in 2025, families are rightfully concerned about their savings and the legacy they hope to leave behind. Understanding the complex legal landscape is crucial for safeguarding your assets from being depleted by long-term care costs.

As a trusted resource for families in our community, Alatsas Law Firm is dedicated to providing you with the knowledge and tools you need to protect your future and that of your loved ones. Here’s a comprehensive guide on the legal options available to shield your assets from nursing home costs, including real-life strategies, local insights, and clear action steps.

Why Nursing Home Costs Threaten Family Assets

Nursing home care expenses in New York have reached record highs:

• NYC Average (2025): $171,276/year ($469/day)

• Long Island: $176,016/year ($482/day)

• Central NY: $146,352/year ($401/day)

(Source: NYSPLTC.gov, Willows Healthcare)

Most health insurance plans—including Medicare—do not cover long-term stays. Without planning, families must “spend down” their assets to qualify for Medicaid, the main government program that will pay for extended nursing care.

For many, this means:

• Draining retirement savings

• Losing the family home

• Leaving little to children or grandchildren

But with proper legal planning, you can avoid these pitfalls.

How Medicaid Works—and Its Impact on Your Assets

Medicaid is a state and federally funded program that pays for nursing home care for those with limited income and assets. In New York, an individual typically cannot have more than $30,182 in countable assets (2025 limit) to be eligible.

What Counts as an Asset for Medicaid?

• Countable: Savings, investments, real estate (besides your primary residence, in many cases)

• Not Countable: Personal belongings, certain pre-paid burial funds, primary home (with strict equity limits and only while you live there)

Medicaid’s “Look-Back” Period

Medicaid reviews your financial history for five years before your application. Any gifts or asset transfers made during that period can result in a penalty—delaying your eligibility for benefits.

Legal Strategies to Shield Assets from Nursing Home Costs

Effective Medicaid planning is complex and fact-specific. Here are proven tools, used by skilled elder law attorneys, to shield your assets:

Irrevocable Trusts

What Is It?

An irrevocable trust allows you to transfer ownership of assets (usually your home and investments) to a trust managed by someone you trust, with terms that cannot be changed by you.

How Does It Protect Assets?

• Removed from your estate: Assets in the trust are not counted by Medicaid after five years.

• Maintain control: You can still live in your home and receive income from trust assets, but you no longer have direct ownership.

Types of Trusts for Asset Protection

• Medicaid Asset Protection Trust (MAPT): Specialized for Medicaid planning.

• Irrevocable Income-Only Trust: Used to shelter property and generate income.

When to act: The sooner, the better. Trusts must be established at least five years before a Medicaid application to be fully protected.

Medicaid-Compliant Annuities

A carefully structured annuity can turn “countable” assets into an income stream that benefits a healthy spouse at home (the “community spouse”), helping married couples protect more of their assets.

Important: The annuity must meet strict Medicaid guidelines on payout period and beneficiary designation.

Life Estates

Transferring your home to a loved one while retaining a life estate gives you the legal right to live there for life. After you pass, ownership automatically transfers—outside of probate.

Benefits:

• Home is not subject to Medicaid estate recovery (after five years).

• Keeps property in the family.

Gifting Assets—and the Medicaid Look-Back Period

Gifting money or property to children or other relatives can help reduce your estate, but if you do so within five years of applying for Medicaid, you may trigger a penalty.

Exceptions:

• Gifting to a spouse, disabled child, or a caregiver child under the “caretaker child exception.”

Strategy: Plan gifts early, and get legal advice to document “exempt” transfers.

Long-Term Care Insurance

Purchasing long-term care insurance can cover some or all nursing home costs. Premiums are expensive and policies are harder to obtain as you age, but it’s an important option for those who can qualify and afford the annual cost.

Frequently Asked Questions (FAQs)

Q1: Will I lose my home if I go into a nursing home?
Not immediately. In New York, your primary residence is usually exempt while you live there. But after death, Medicaid may recover costs from your estate—including your home—unless you plan with trusts or life estates.

Q2: Can I just give everything to my kids?
Not without consequences. Medicaid’s five-year look-back can disqualify you if you transfer assets for less than fair market value.

Q3: I’m married. Can Medicaid take all of our assets?
No, New York law specifically protects a portion of assets for the at-home (“community”) spouse. Legal strategies such as spousal refusal can also enhance asset protection.

Q4: If I’m healthy now, when should I start planning?
As soon as possible! Early planning maximizes options and protection.

Case Example: Brooklyn Family Avoids Financial Ruin

Names changed for privacy.

Situation:
Nick and Maria, both in their early 70s, owned a home in Bay Ridge and had about $250,000 in savings. When Nick’s health declined, Maria feared she’d lose their savings and the house paying for a nursing home.

Actions:

1. Worked with Alatsas Law Firm to set up a Medicaid Asset Protection Trust—transferring their home and most savings into the trust.

2. Ensured all transfers were made outside the five-year look-back.

3. Maria, the “community spouse,” was able to keep a substantial portion of income and assets.

4. When Nick qualified for Medicaid, their home and nest egg remained safe for eventual inheritance by their children.

Result:
Nick received long-term care without impoverishing Maria or jeopardizing the family home.

Key Takeaways for Brooklyn, Queens, and Staten Island Families

• Act Early: Five years is the key timeline for most asset transfers.

• Use Professional Guidance: Mistakes can be costly. New York rules are complex and change frequently.

• Protect Your Spouse and Children: With proper planning, you can maintain your standard of living and pass on assets to your family.

How Alatsas Law Firm Can Help

Located right here in Brooklyn, the Alatsas Law Firm has nearly 30 years of experience guiding local families through Medicaid and asset protection planning. We ensure your:

• Wishes are respected

• Assets are secure

• Loved ones are protected from avoidable financial hardship

Ready for Peace of Mind?
Contact us today for a personalized consultation and estate review. Don’t wait until a crisis hits—start protecting your family’s future now.

Alatsas Law Firm: The community’s trusted partner in elder law and asset protection.

Further Reading & Resources

• NYS Medicaid Info

• NY State Partnership for Long-Term Care

• Download our “Asset Protection Checklist for New Yorkers”

Protecting your assets from nursing home costs is not only possible, but essential. With the right strategies and experienced guidance, your family’s legacy can be preserved—no matter what the future holds.