Medicaid Asset Protection Trusts can help Long Islanders keep their home and pay for care
William Bennett, a retired doctor who lives in Huntington, worked closely with a lawyer on his late mother-in-law’s MAPT for which his wife served as trustee. He said good legal advice is crucial. Credit: Rick Kopstein
Nicholas Deninno wishes he’d learned about elder care planning sooner.
When one of his parents started experiencing declining health, the 56-year-old Carle Place resident realized that the family needed to plan for the possibility of long-term care, which can cost five figures per month on Long Island.
Today, he has peace of mind.
“If long-term care becomes necessary, there is a plan in place to help preserve those assets for the family rather than seeing them potentially consumed by care costs,” Deninno said.
For his family, the solution was a Medicaid Asset Protection Trust, known as a MAPT, an irrevocable trust designed to help people qualify for Medicaid coverage for home care and nursing care while preserving assets for beneficiaries. The asset threshold for both community (home care) and chronic care (institutional/nursing home) Medicaid is $33,038 for a single applicant, and up to $44,796 for a couple. That limit is easily surpassed on Long Island simply by owning a home. In April, the median home sale price was $852,000 in Nassau County and $714,900 in Suffolk, Newsday has reported.
A MAPT, after a five-year look-back period, may help someone avoid selling a home to pay for long-term care. Medicare does not cover that cost.
“If you’re sitting on a home worth $600,000 to $800,000 that’s real wealth, and it can disappear quickly in a skilled nursing facility,” warned Nicole Israel, a trusts and estates planning attorney in Manhattan.
THE BENEFITS OF A MAPT
Chances are you will need long-term care. According to the U.S. Department of Health and Human services, someone turning age 65 today has almost a 70% chance of requiring those services and supports during their lifetime.
“You want to protect the value of your home from the cost of long-term care, whether you’re receiving care in your home or a nursing home,” said Daniel Bernard, an estate planning attorney with Bernard Law in Hauppauge. Care gets very expensive, very fast. Who can afford to pay $10,000 a month, month after month?”
The numbers can be staggering.
“On Long Island, a nursing home can be as high as $20,000 a month, assisted living if you need a high level of care, $16,000, and depending on how much care you need if you’re getting home care, $5,000 to $8,000 a month,” said estate planning attorney Cheryl Fratello of Fratello Law in Smithtown. “Long-term care can be devastating financially.”
With those kinds of costs, “Just about anyone who owns a home on Long Island should consider a MAPT,” Bernard said. “Maybe if you’re in that small group of incredibly wealthy people with more than $7 million [taxable estate], then you likely have enough money for long-term care and don’t need one.”
A MAPT allows a person to continue living in their home and, unlike a typical irrevocable trust, preserves tax benefits.
“Never put retirement accounts like 401(k)s and IRAs in a MAPT,” said estate attorney James Burdi. “Not only might you trigger income tax, but these accounts are considered exempt for Medicaid purposes.” Credit: Debbie Egan-Chin
HOW IT WORKS
A MAPT can do more than help protect assets while pursuing Medicaid eligibility. It can also shield assets from Medicaid estate recovery claims after death. Under the federal Medicaid Estate Recovery Program, states are required to seek reimbursement from a deceased Medicaid recipient’s estate for long-term care, nursing facility services and related medical costs. However, the state generally can only recover assets that pass through probate — those held solely in a person’s name without a designated beneficiary.
Typically, people place assets such as their home, savings and investment accounts in the trust. Just as important is what not to transfer. “Never put retirement accounts like 401(k)s and IRAs in a MAPT,” explained James Burdi, an estate planning attorney and partner with Vishnick McGovern Milizio in Lake Success. “Not only might you trigger income tax, but these accounts are considered exempt for Medicaid purposes.”
Transferring your assets into the trust means you’ll need to get a new deed naming the trust as owner on your home and get it recorded with the county clerk. If you’re moving over your bank account, you’ll need to do something you likely haven’t done in a while — visit a branch in person — to complete the bank’s or brokerage firm’s trust transfer forms.
Like many financial products, MAPTs can be complex. Even though your home is no longer in your name you can still live there. You can still receive investment income. If you want to sell your home, the trustee will handle the transaction. The proceeds of the sale will go into the trust, or they could be used to buy another home. There’s more good news. You can retain your property exemptions like those for seniors and veterans, and capital gains exclusions. Upon your death, a MAPT typically preserves the step-up basis, meaning your heirs will pay less tax on the inheritance.
“You’re not giving up everything,” said Charles Massimo, senior vice president and financial adviser at Wealth Enhancement in Deer Park.
Another advantage is that trust assets can pass directly to beneficiaries, avoiding probate.
“The trusts’ assets can flow to the intended beneficiaries,” said Wendy Goidel, an attorney specializing in estate planning and elder law with Goidel Law Group in Melville. “You avoid probate, you won’t have to deal with the delay and expense.”
Wendy Goidel, an attorney specializing in estate planning, said a MAPT protects assets for survivors and for the next generation — “the intended beneficiaries.” Credit: Rick Kopstein
DRAWBACKS AND LOOK-BACKS
One challenge for some people is the loss of control. “A MAPT is an irrevocable trust, your assets are no longer freely available to you,” Burdi said.
For that reason, Burdi advised against transferring too much into a trust. “You still want to be able to have money to fix the roof, to go on vacation,” he said. “Have at least six months of expenses outside of your trust that you can easily access.”
Fratello put it more bluntly, “You can’t take money out of a trust like it’s a checking account,” she said. “There are mechanisms in place for distribution; it has to be done the right way. Mismanagement of the trust can be detrimental; you can lose your protection.”
Perhaps the most important feature to understand is the five-year look-back period.
“If you put assets in today and die within five years, it will look as if you didn’t put them in and they’re put back in your estate,” explained Massimo.
In practical terms, assets transferred into a MAPT within five years of applying for Medicaid still count against eligibility. Applicants should also expect to be scrutinized. “Expect forensic accounting to be done,” Bernard said. “Medicaid will look through every transaction you made over the last five years to see where your money went, to see if you gave money away.”
The look-back period applies to Medicaid for institutional care, but not for community, or home-based, care. That could change. “There was legislation passed a few years ago that calls for a 30-month look-back period for home-based services. It hasn’t taken effect yet, but it’s on the horizon, and it could be in effect next year,” Fratello warned.
Nicholas Deninno set up a Medicaid Asset Protection Trust for his parents, Annette and Nicola. Credit: Nicholas Deninno
PLANNING EARLY
Seven years ago, when Deninno’s parent’s health started to decline, he and his brother, who is trustee of the MAPT, began exploring options. “We wanted to protect the assets they had worked their entire lives to build.”
They put the family home in a MAPT. “The biggest challenge was learning how complex Medicaid planning can be with eligibility requirements and legal considerations most families are unfamiliar with,” Deninno said.
Fortunately, he said, “Our attorneys took the time to explain everything clearly and set realistic expectations.”
Setting up a MAPT isn’t cheap — they can range from a few thousand dollars to more than $5,000, depending on the assets and the client’s situation. “It was worth the investment, compared to the potential cost of long-term care and the value of the assets being protected,” Deninno said.
William Bennett, an 80-year-old recently retired doctor, worked closely with a lawyer on his late mother-in-law’s MAPT. His wife served as trustee.
They set up a MAPT to get Medicaid coverage for in-home care for his wife’s mother, and he feels good about their decision. “The benefits started quickly and more than paid for themselves,” said the Huntington resident. “This would have been particularly difficult and time consuming if it weren’t for the excellent legal help we got.”
Then there’s Rosemary DeNatale’s story.
The 70-year-old Jackson Heights resident is the primary caregiver for her aunt Marie, who is in her 80s. After her aunt left a nursing home in 2022, DeNatale established a MAPT for her aunt and secured Medicaid coverage for home care. But her aunt’s health continued to decline. She returned to a nursing home in 2023 after an accident and again in 2025 after losing the use of her legs.
To cover mounting nursing home costs, DeNatale was forced to draw from the trust, depleting much of its cash. She is now applying for Medicaid institutional-care coverage and navigating the program’s five-year look-back period.
“Right now, we’re in no-man’s land,” DeNatale said. “I had to go to the bank to get 60 months of statements.”
DeNatale’s experience underscores what experts say about the need to plan early.
“I tell clients: Call me when you don’t think you need me yet,” said Israel. “That’s usually exactly the right time.”
ATTORNEYS' KEY ADVICE
Get good legal help
This is not the time to try to DIY or use a distant family member who just happens to be an attorney. "You want good advice from a lawyer who does this every day," said attorney James Burdi. Go for someone with expertise in estate planning and elder law. You can find lawyers through the Suffolk and Nassau County Bar Association. The New York State Bar Association has a dedicated section for attorneys focused on Medicaid planning and other elder law areas.
Choose your trustee carefully
"The trustee will have control and make decisions," attorney Cheryl Fratello said. The best person might be your child, another relative, a trusted friend or an accountant. "They should have financial acumen," said attorney Wendy Goidel.
Look into a MAPT sooner rather than later
Timing is everything. The trust has to be set up before you need care, ideally in your 60s or early 70s, when you're healthy and have time on your side.
"The single biggest mistake I see families make is waiting until a parent is already in a nursing home to call me, and by then, it's often too late to protect anything," attorney Nicole Israel said.
