For many families, the home is the heart of their financial security. When facing the possibility of long-term care, it’s natural to wonder:
“Can I just transfer my home to my children so Medicaid doesn’t take it?”
The answer is complicated — and the wrong move can cost you thousands of dollars in penalties or even disqualify you from Medicaid coverage.
Here’s what every New York homeowner should know before signing a deed to their child.
Medicaid’s 5-Year Lookback Rule in New York
New York’s Medicaid program reviews your finances for five years before your application date.
If you gift or transfer assets (including your home) during that period, Medicaid will treat it as if you still owned the asset — and can impose a penalty period where you are ineligible for benefits.
For example:
If your home is worth $600,000 and you deed it to your child within five years of applying for Medicaid, Medicaid may delay coverage for many months — leaving you to pay privately for care until that period ends.
That’s why timing and strategy are everything.
Risks of Transferring Your Home Outright
Many families try to “DIY” a transfer — signing a quick deed to a son or daughter to avoid nursing-home costs. Unfortunately, this can create serious problems:
- Medicaid Penalties – The transfer counts as a gift under the lookback rule.
- Loss of Control – Once the house is in your child’s name, it legally belongs to them. If they divorce, get sued, or have financial issues, your home is at risk.
- Tax Consequences – The child may lose valuable capital-gains exemptions or step-up in basis, resulting in major tax liability later.
- Family Disputes – Outright transfers often create tension or resentment among siblings.
Safer Alternatives: Medicaid Asset Protection Trust (MAPT)
Instead of gifting your home, an irrevocable Medicaid Asset Protection Trust (MAPT) can offer powerful protection without the risks of outright transfer.
When structured properly:
- You can live in your home for life.
- You maintain control through a trustee of your choice.
- The transfer starts the 5-year clock for Medicaid eligibility.
- After the 5 years, the home is protected from nursing-home recovery.
- Your children still inherit the property, often with a step-up in tax basis that minimizes taxes.
This approach protects both your eligibility and your legacy.
When a Crisis Has Already Happened
Even if you or a loved one is already in a nursing home, there are still options.
We often use “crisis Medicaid planning” tools, such as:
- Partial asset protection transfers
- Caregiver agreements
- Spousal refusal planning
- Promissory-note strategies
These can still preserve a significant portion of assets — but should only be done with the help of an experienced elder-law attorney.
Serving Families Across Long Island & New York City
At Kirshblum Taber PC, we’ve helped hundreds of homeowners across Nassau, Suffolk, Queens, Brooklyn, Manhattan, and the Bronx protect their homes and qualify for Medicaid long-term care.
We’ll review your assets, explain your options, and build a custom strategy that keeps your property safe and your family cared for.
Schedule Your Medicaid Planning Consultation
Don’t risk your home with a hasty transfer. Speak with a New York elder-law attorney who knows how to do it right.
Call 516-908-8842 or request a consultation online to get started.