Medicaid planning is the coordinated legal work of restructuring how you own assets — most often by moving them into an irrevocable trust — so that, after New York’s five-year look-back period has passed, those assets no longer count against you when you apply for Medicaid to pay for a nursing home or long-term care. Because the look-back examines transfers made in the sixty months before a Medicaid application, the single most important truth about Medicaid planning in New York is this: it works best when it is done early. At Morgan Legal Group, we treat Medicaid planning not as a standalone document but as one service inside a fully integrated estate plan — drafted, signed, and coordinated so that protecting your assets from long-term care costs never undermines your will, your trusts, your power of attorney, or your health care proxy.
This article explains how the five-year look-back works, why an irrevocable trust is the centerpiece of most plans, and — because this is a services-overview — the full breadth of documents our firm prepares so that your Medicaid strategy fits cleanly into the rest of your estate.
What the 5-Year Look-Back Actually Means
When you apply for institutional (nursing home) Medicaid in New York, the agency reviews your financial transfers going back sixty months. Assets you gave away or moved into a protected structure during that window can trigger a penalty period — a span of time during which Medicaid will not pay for your care. Transfers completed before the look-back window opened are not penalized.
This is why timing controls everything. An asset transferred into a properly drafted irrevocable trust today begins its own five-year clock. Wait until a health crisis arrives, and the planning options narrow sharply. The look-back rewards foresight and punishes delay.
A few principles we explain to every client:
- Outright gifts are risky. Giving assets directly to children can expose them to your child’s divorce, creditors, or lawsuits — and still triggers the look-back.
- The right trust is irrevocable, not revocable. A revocable living trust under EPTL Article 7 avoids probate but offers no Medicaid protection, because you retain control. Only an irrevocable trust removes the assets from your countable estate.
- Income and principal can be separated. A well-drafted Medicaid asset protection trust can let you keep the income from your assets while shielding the principal.
The Irrevocable Trust: Centerpiece of the Plan
Under EPTL Article 7, New York recognizes both revocable and irrevocable trusts. For Medicaid planning, the irrevocable trust does the heavy lifting: it is used for tax reduction, asset protection, and Medicaid qualification subject to the five-year look-back. Once assets are properly transferred in, they are no longer “available” to you for Medicaid purposes after the look-back runs.
A related tool is the Supplemental Needs Trust (SNT) under EPTL 7-1.12, which preserves means-tested government benefits for a disabled beneficiary — allowing an inheritance to enhance their life without disqualifying them from Medicaid or SSI.
It is worth being precise about what a trust does and does not do:
| Trust Type | Avoids Probate | Medicaid Protection | Estate-Tax Use |
|---|---|---|---|
| Revocable Living Trust (EPTL Art. 7) | Yes | No | No |
| Irrevocable Trust (EPTL Art. 7) | Yes | Yes (after 5-yr look-back) | Yes |
| Supplemental Needs Trust (EPTL 7-1.12) | Yes | Preserves benefits | Varies |
A revocable trust is excellent for avoiding probate and managing assets, but it provides no estate-tax savings and no Medicaid shelter. Choosing the wrong instrument is one of the most common and costly mistakes we correct.
The Full Suite of Documents We Prepare
Medicaid planning never stands alone. A comprehensive New York estate plan coordinates a will, one or more trusts, a durable power of attorney, and a health care proxy so that each document supports the others. Here is the breadth of what Morgan Legal Group drafts and assembles for clients statewide:
1. The Will (EPTL §3-2.1)
Your last will and testament directs who receives assets that pass through probate and names your executor. New York requires strict formalities under EPTL §3-2.1: two attesting witnesses, the testator’s signature at the end of the document, and publication (declaring the document to be your will). Dying without a valid will means intestacy — your property is distributed under EPTL Article 4, by a statutory formula that may not match your wishes at all.
2. Trusts (EPTL Article 7)
As described above, we draft revocable trusts for probate avoidance and irrevocable trusts for Medicaid and asset protection, plus Supplemental Needs Trusts under EPTL 7-1.12 where a beneficiary’s benefits must be preserved.
3. The Durable Power of Attorney (GOL §5-1513)
The power of attorney lets a trusted agent manage your finances if you cannot. Under General Obligations Law §5-1513, New York’s power of attorney is durable by default — it survives incapacity — and the 2021 statutory short form is the modern, bank-friendly standard. A robust POA with gifting authority is essential to Medicaid planning, because your agent may need to complete transfers if you lose capacity.
4. The Health Care Proxy (Public Health Law Article 29-C)
The health care proxy appoints an agent to make medical decisions on your behalf when you cannot speak for yourself, under New York Public Health Law Article 29-C. It is legally distinct from the financial power of attorney — one governs your money, the other governs your medical care.
For a guided walk-through of how all of these fit together, see our estate planning overview.
Where Estate Tax Fits In
Medicaid planning protects against long-term care costs; estate-tax planning protects against a different threat. For 2026, New York’s basic exclusion amount is $7,350,000 for deaths on or after January 1, 2026 through December 31, 2026. New York also imposes a notorious “cliff.” If your taxable estate exceeds 105% of the exclusion — $7,717,500 — you lose the entire exemption and are taxed from the first dollar, at progressive rates from 3% to 16%.
Two more points often surprise clients:
- New York has no gift tax. You can make lifetime gifts without a separate New York gift tax.
- But gifts made within three years of death are added back to your taxable estate for New York estate-tax purposes.
Because irrevocable trusts serve both Medicaid and estate-tax goals, coordinated planning lets a single strategy address both risks. See our New York estate tax guide for the numbers in detail.
Frequently Asked Questions
Does a revocable living trust protect my home from Medicaid?
No. A revocable trust under EPTL Article 7 avoids probate but offers no Medicaid protection because you retain full control over the assets. Only a properly drafted irrevocable trust shelters assets, and only after the five-year look-back has passed.
What happens if I need care before five years pass?
You may face a penalty period during which Medicaid will not pay for your care. This is precisely why early planning matters — but even in a crisis, options such as spousal transfers, exempt transfers, and other strategies may still help. Speak with an attorney as soon as a need is foreseeable.
Can I keep income from assets I put in a Medicaid trust?
Often yes. A Medicaid asset protection trust can be structured so you retain the income while the principal is protected, depending on your circumstances and the trust’s terms.
Do I still need a will if I have trusts?
Yes. A will under EPTL §3-2.1 catches assets outside your trusts, names guardians for minor children, and appoints your executor. Without one, intestacy under EPTL Article 4 controls. We coordinate the will with your trusts so nothing falls through the cracks.
Speak With Morgan Legal Group
Medicaid planning rewards those who act early and coordinate every document. Russel Morgan, Esq. and the team at Morgan Legal Group prepare the full suite — wills, trusts, powers of attorney, and health care proxies — drafted to work together and serving clients across New York State. For statewide context, see our New York statewide guide.
Ready to protect your estate? Schedule a 30-minute consultation with Russel Morgan, Esq.
Further reading from Morgan Legal Group: the New York estate planning guide.