Elder Law — New York City
A Medicaid Asset Protection Trust removes your home and savings from Medicaid's reach — permanently — after the 5-year look-back period. It is the most powerful advance long-term care planning tool available under New York law.
The Medicaid Asset Protection Trust — commonly known by the acronym MAPT — is an irrevocable trust designed specifically to protect assets from Medicaid's long-term care spend-down requirements under New York Social Services Law. When a New York resident transfers their home, investment accounts, or other significant assets into a properly drafted MAPT, those assets are removed from the grantor's countable resource calculation for Medicaid purposes once the 60-month look-back period has elapsed. A MAPT established today, if the grantor does not require nursing home Medicaid for at least five years, provides complete protection for the transferred assets — shielding them from both Medicaid spend-down and New York's estate recovery program.
The legal foundation of the MAPT under New York law rests on the principle that assets in an irrevocable trust to which the grantor has no right of principal are not "available resources" for Medicaid purposes. The grantor typically retains the right to all income generated by the trust (interest, dividends, rental income), the right to reside in any trust-owned real property, and in some cases a limited power of appointment over trust assets at death. The grantor does not retain the right to demand return of principal or to revoke the trust. A trustee — typically an adult child or trusted family member — holds legal title to the trust assets and administers them according to the trust document. Upon the grantor's death, the trust remainder passes to designated beneficiaries without probate, without Medicaid estate recovery, and (with proper drafting) with a stepped-up income tax basis under IRC Section 1014.
Russel Morgan, Esq. has drafted Medicaid Asset Protection Trusts for clients across all five New York City boroughs — Manhattan, Brooklyn, Queens, the Bronx, and Staten Island — as well as Nassau, Westchester, and Suffolk counties. Each MAPT is tailored to the client's specific asset structure, family circumstances, and tax situation. Special considerations apply to New York City co-op apartments, multi-family investment properties, retirement accounts (which generally cannot be held in trust), and assets with built-in capital gains that must be carefully managed within the MAPT framework. Morgan Legal Group coordinates MAPT planning with broader estate planning to ensure the trust integrates seamlessly with the client's will, powers of attorney, and other planning documents.
The trust must be irrevocable to remove assets from the Medicaid countable resource calculation. Any retained power to revoke or amend causes the assets to remain countable.
The grantor cannot retain any right to receive principal distributions from the trust. Income rights are permitted; principal access by the grantor defeats the Medicaid protection.
A properly structured MAPT allows the grantor to receive all income generated by trust assets — interest, dividends, rent — without affecting Medicaid eligibility.
Assets transferred to the MAPT must remain there for at least 60 months before a Medicaid application to avoid a penalty period. Early establishment is essential.
Because MAPT assets pass outside of probate, New York's Medicaid estate recovery program — which is limited to probate assets — cannot reach trust property after the grantor's death.
With careful drafting, MAPT beneficiaries may receive a stepped-up income tax basis in trust assets at the grantor's death under IRC §1014, minimizing capital gains on later sale.
A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust established under New York law specifically to protect assets — most commonly the family home and investment accounts — from being counted as resources for Medicaid long-term care eligibility purposes. Once assets are transferred to a properly drafted MAPT, the grantor relinquishes legal ownership and control over the trust principal. This means the grantor can no longer sell, mortgage, or revoke the trust assets without the trustee's cooperation. However, the grantor typically retains the right to receive all income generated by the trust assets during life, and may retain the right to occupy the trust-owned home. Because the grantor no longer owns the trust principal, after the 60-month Medicaid look-back period has run, those assets are not counted toward the Medicaid resource limit. New York requires the look-back period to expire before trust assets are excluded from the Medicaid calculation. The trust must be properly structured under New York's Estates, Powers and Trusts Law and must not give the grantor any right to trust principal that would cause it to be counted as a resource. Russel Morgan, Esq. has drafted hundreds of MAPTs for New York City families, ensuring every trust is structured to withstand Medicaid scrutiny while protecting the family's legacy.
Transferring a New York City cooperative apartment into a Medicaid Asset Protection Trust is significantly more complex than transferring a traditional house or condominium, and requires careful coordination with the specific co-op corporation's policies and proprietary lease terms. Unlike a condominium or house, a co-op owner does not own real property outright — they own shares in the cooperative corporation and hold a proprietary lease for their unit. Transferring these shares to a trust requires the approval of the co-op board, which may or may not be forthcoming. Many New York City co-op boards have policies restricting ownership by trusts, require financial review of the trustee, or have specific consent and subletting provisions that interact with trust ownership in complex ways. In some cases, the co-op proprietary lease explicitly prohibits transfer to a trust without board consent. Despite these complexities, many New York City co-ops can successfully be held in trust with the right approach. Russel Morgan, Esq. has extensive experience navigating New York City co-op transfer requirements and works directly with co-op boards, managing agents, and counsel to facilitate trust ownership where permitted. For co-ops where trust ownership is not feasible, alternative Medicaid planning strategies are available.
If you need nursing home Medicaid before the 60-month look-back period has elapsed since the transfer of assets to a MAPT, those assets will be counted as a disqualifying transfer, resulting in a penalty period of Medicaid ineligibility. The penalty period is calculated by dividing the value of the transferred assets by the New York State-established average monthly nursing home cost (the regional penalty divisor, approximately $14,000–$15,000 per month for New York City). For example, if you transferred a $500,000 home to a MAPT and need Medicaid 24 months later, you might face a penalty period of approximately 33–35 months of ineligibility. This underscores the critical importance of beginning MAPT planning as early as possible — ideally when you are in good health and well before any care need arises. If the look-back issue cannot be avoided, Morgan Legal Group employs crisis planning strategies to minimize the penalty period and cover care costs during the ineligibility period, including spousal transfers (for married clients), exempt asset conversions, and in appropriate circumstances, a Medicaid-compliant annuity. Many New York families establish MAPTs in their late 50s or early 60s to ensure the look-back period has fully run well before care needs arise.
Yes, placing your home in a Medicaid Asset Protection Trust significantly affects your ability to sell or refinance the property — and understanding this trade-off is essential to making an informed decision about MAPT planning. Once the home is owned by the trust, the grantor no longer has the legal authority to sell or mortgage the property independently. Any sale or refinance requires action by the trustee and is governed by the trust document terms. Typically, the trust document provides that the trustee may sell the trust property, and that proceeds of a sale remain in the trust. If the home is sold, the sale proceeds can be reinvested in a new primary residence titled in the trust — preserving the continuous look-back period protection — or retained as cash or investments within the trust. Importantly, New York may allow the grantor to continue to exclude capital gains on the sale of a principal residence under IRC Section 121 (the $250,000/$500,000 exclusion) if the grantor retained a life estate or certain use rights in the home. This income tax consideration must be carefully analyzed as part of the MAPT design. Morgan Legal Group drafts MAPT documents that balance Medicaid protection with practical flexibility, including appropriate trustee powers and investment instructions tailored to each client's needs across all NYC boroughs.
The clock starts ticking the day the trust is funded. Every year of delay reduces your protection. Speak with Russel Morgan, Esq. today about establishing a Medicaid Asset Protection Trust.
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