Medicaid Planning and Your New York Estate (5-Year Look-Back)

Medicaid planning is the process of legally arranging your assets so that, if you ever need long-term nursing-home care, you can qualify for Medicaid without spending your entire life savings first — and in New York, the single most important rule to understand is the 5-year look-back. When you apply for institutional (nursing-home) Medicaid, the state reviews the 60 months before your application for any assets you gave away or transferred for less than fair value. The most reliable way to protect assets ahead of that window is an irrevocable trust created and funded more than five years before you need care. If that sentence feels intimidating, take a breath: this guide is written for first-timers. We’ll walk through the basics in plain language, show you how the pieces of a New York estate plan fit together, and explain exactly why timing matters so much.

The reassuring truth is that Medicaid planning is not about hiding money or gaming the system. It is about using ordinary, legal tools — the same trusts, wills, and powers of attorney that make up any comprehensive New York estate plan — in the right order and at the right time.

Why the 5-Year Look-Back Exists

When you apply for nursing-home Medicaid in New York, the program checks whether you have given away assets to artificially qualify. It looks back five years (60 months). Transfers made inside that window can trigger a penalty period — a stretch of time during which Medicaid will not pay for your care, calculated based on the value of what you transferred.

Transfers made more than five years before you apply are outside the look-back and do not count against you. This is the heart of Medicaid planning: act early, and the clock works in your favor. Wait until a crisis hits, and your options narrow considerably.

The essentials takeaway: The 5-year look-back rewards planning ahead. The best time to set up protection is before you need it — ideally years before.

The Irrevocable Trust: Your Main Medicaid Tool

Under EPTL Article 7, New York recognizes two broad families of trusts, and the difference between them is everything when it comes to Medicaid.

• A revocable living trust lets you keep full control and avoid probate, but because you can revoke it and take the assets back, Medicaid still counts those assets as yours. A revocable trust offers no Medicaid protection and no estate-tax savings.
• An irrevocable trust is the workhorse of Medicaid planning. Once you transfer assets into a properly drafted irrevocable trust and the 5-year look-back clears, those assets are generally no longer counted as available resources. Irrevocable trusts are used for tax reduction, asset protection, and Medicaid qualification.

A common structure is the Medicaid Asset Protection Trust (MAPT) — an irrevocable trust that can hold your home and savings, often while still letting you live in the house and receive trust income, with your children or other loved ones as beneficiaries.

For individuals with disabilities, New York also recognizes the Supplemental (Special) Needs Trust under EPTL §7-1.12, which preserves eligibility for Medicaid and other needs-based benefits while still providing for the beneficiary’s extra quality-of-life expenses.

Learn more on our trusts overview page.

Revocable vs. Irrevocable — The Quick Comparison

Feature	Revocable Living Trust	Irrevocable Trust (e.g., MAPT)
Can you change or cancel it?	Yes, anytime	No (limited exceptions)
Avoids probate?	Yes	Yes
Protects assets from Medicaid?	No	Yes — after the 5-year look-back
Estate-tax savings?	No	Possible
Statutory basis	EPTL Article 7	EPTL Article 7

How Medicaid Planning Fits Your Whole Estate Plan

Medicaid planning is one piece of a coordinated whole. A complete New York estate plan brings together four core documents that work in concert:

1. A Will — Governed by EPTL §3-2.1, a valid New York will requires two attesting witnesses, the testator’s signature at the end of the document, and publication (declaring to the witnesses that it is your will). Without a will, you die intestate, and EPTL Article 4 dictates who inherits — which may not match your wishes. See our wills page.
2. Trust(s) — As above, the irrevocable trust is the Medicaid tool, while a revocable trust handles probate avoidance.
3. A Durable Power of Attorney — Under GOL §5-1513, New York’s power of attorney is durable by default (it survives your incapacity), using the 2021 statutory short form. This document lets a trusted agent manage your finances — including, critically, the asset transfers and trust funding that Medicaid planning may require. Visit our power of attorney page.
4. A Health Care Proxy — Authorized by New York Public Health Law Article 29-C, this appoints an agent to make your medical decisions if you cannot. It is separate from the financial POA — you need both.

When these documents are drafted together, your Medicaid plan, your wishes for your heirs, and your medical and financial decision-making all line up.

A Note on the New York Estate Tax

Medicaid planning protects against long-term-care costs; the New York estate tax is a separate concern that affects larger estates. For 2026, the basic exclusion is $7,350,000 for deaths on or after January 1, 2026 through December 31, 2026. New York has a notorious “cliff”: an estate exceeding 105% of the exclusion — $7,717,500 — loses the entire exemption and is taxed from the first dollar. Rates are progressive, from 3% up to 16%.

New York has no gift tax, which makes lifetime gifting attractive — but be aware that gifts made within 3 years of death are added back to the taxable estate. For a deeper look, read our NY estate tax guide.

Frequently Asked Questions

Q: How long before I need care should I set up an irrevocable trust?
A: More than five years. The Medicaid look-back is 60 months, so assets transferred to a properly funded irrevocable trust more than five years before you apply for nursing-home Medicaid are generally outside the look-back. Earlier is always safer.

Q: Will I lose access to my home if I put it in a Medicaid trust?
A: Not necessarily. A well-drafted Medicaid Asset Protection Trust can let you continue living in your home and receive trust income, while protecting the asset’s value for your beneficiaries. The exact terms depend on your situation.

Q: Does a revocable living trust protect my assets from Medicaid?
A: No. Because you can revoke it and reclaim the assets, Medicaid still counts them as available. Only an irrevocable trust (after the look-back clears) provides Medicaid asset protection.

Q: Is Medicaid planning legal in New York?
A: Yes. It uses ordinary legal tools — irrevocable trusts under EPTL Article 7, durable powers of attorney under GOL §5-1513, and coordinated estate documents — to qualify within the rules. The key is planning ahead of the 5-year look-back.

Take the First Step

You don’t have to understand every rule before you begin — that’s our job. The most important move is to start early, while the 5-year clock is still on your side. Whether you’re protecting a family home, planning for a loved one with special needs, or simply want your New York estate plan in order, Morgan Legal Group can help you build a plan that fits.

Schedule a consultation with Russel Morgan, Esq. to discuss your Medicaid and estate planning options across New York State. Book your 30-minute consultation here →

For a broader look at how everything connects, see our New York statewide estate planning guide.