Understanding Long-Term Care & Asset Protection

INTRODUCTION

Medicaid is the primary payer for long-term care in New York. This guide provides the 2026 financial thresholds and rules to help you protect your legacy while securing necessary care.

TYPES OF MEDICAID PROGRAMS

* COMMUNITY MEDICAID: Often called “Home Care,” this covers home health aides, personal care assistants, and adult day care while you reside in your home or an assisted living facility.

* NURSING HOME MEDICAID: Known as “Institutional Medicaid,” this covers 24/7 skilled nursing facility care.

* MEDICAID FOR THE ABD: Provides standard health insurance for those 65+ or with a qualifying disability.

2026 FINANCIAL ELIGIBILITY LIMITS

To qualify, your “countable” income and assets must fall below these New York state thresholds.

SINGLE APPLICANT:

* Monthly Income Limit: $1,835.40

* Asset/Resource Limit: $32,396.00

MARRIED COUPLE (Both Applying):

* Monthly Income Limit: $2,488.60

* Asset/Resource Limit: $43,781.00

*Note for Nursing Home Residents: Once admitted, you are generally required to contribute all income toward the cost of care, keeping only a $50/month Personal Needs Allowance.*

THE “LOOK-BACK” RULES (CRITICAL CAVEAT)

New York treats asset transfers differently depending on the type of care you seek.

* NURSING HOME CARE: There is a strict 60-month (5-year) look-back period. Any gifts or transfers for less than fair market value made within 5 years of your application will trigger a “penalty period” of ineligibility.

* COMMUNITY/HOME CARE: The 30-month look-back is NOT in effect. As of early 2026, the proposed 2.5-year look-back for home care has still not been implemented by the New York State Department of Health.

* Advantage: Currently, individuals can transfer assets and qualify for Home Care Medicaid in the following month without penalty.

* Risk: This “window of opportunity” remains open for now but can be closed by the state with minimal notice.

EXEMPT ASSETS: WHAT YOU ARE ALLOWED TO KEEP

The following assets do not count toward the resource limit:

* PRIMARY RESIDENCE: Exempt up to $1,130,000 in equity if you or a spouse live there.

* RETIREMENT ACCOUNTS: IRAs and 401(k)s are exempt if they are in “payout status” (taking at least the Required Minimum Distribution).

* ONE VEHICLE: One car of any value is permitted.

* BURIAL FUNDS: An irrevocable burial trust of any amount or a designated $1,500 burial fund.

 

SPOUSAL PROTECTIONS (PREVENTING IMPOVERISHMENT)

If only one spouse needs care, the spouse staying at home (the “Community Spouse”) is allowed to keep significantly more.

* RESOURCE ALLOWANCE (CSRA): The spouse at home can keep up to $162,660 in assets.

* MONTHLY INCOME ALLOWANCE (MMMNA): The spouse at home is entitled to a minimum monthly income of $4,066.50.

 

PLANNING STRATEGIES FOR EXCESS INCOME & ASSETS

If you exceed the limits, you can still qualify using these legal tools:

* POOLED INCOME TRUSTS: Allows you to “spend down” excess monthly income on your own living expenses (rent, utilities) so it isn’t taken by Medicaid.

* SPOUSAL REFUSAL: A legal right in New York where a spouse refuses to make their income or assets available for the applicant’s care.

* MEDICAID ASSET PROTECTION TRUSTS (MAPT): An irrevocable trust used to protect a home or savings from the 5-year nursing home look-back.

IMPORTANT DISCLAIMER

Medicaid laws are complex and subject to frequent updates. This document is for informational purposes and does not constitute legal advice. Consult with an elder law attorney to create a plan tailored to your specific situation.

FALCONE LAW FIRM

www.falconeattorney.com | 631-607-4529

Offices in Commack, Hauppauge, and Melville

It is not easy accepting that your time on Earth is limited, but it is something you should discuss with your loved ones before it is too late. Unfortunately, far too many Americans 55 and over do not complete essential end-of-life planning tasks, which may lead to difficulties with family members and friends when you cannot make decisions for yourself due to your health. In this article, you will learn five essential estate planning steps you should take before you turn 55.

#2 Assign Power of Attorney

When you give someone power of attorney, you grant them certain rights to make informed decisions on your behalf. For example, a financial power of attorney can make financial transactions for you, such as paying your bills or taking out loans. Assigning this to someone before you become incapacitated will make handling your affairs easier. This is especially true for those suffering from degenerative brain diseases like Alzheimer’s or dementia. Failure to plan this early can force your loved ones to go to court for approval, which can waste time and money down the line.

#3 Establish Guardianship for Any Dependents

Whether you have a minor or adult dependent, they will need someone to care for them in your absence. Having legal guardianship in place for them with a trusted person will make your dependent’s life much easier after you pass on. There are a few different options available, such as guardianships for minors or guardianships for dependents with special needs.

#5 Choose an Executor

An executor is someone who will be in charge of carrying out your testament when you die. They can be a close friend, attorney, loved one, or any trusted individual you believe is capable of carrying out that task. Finding someone who can enforce your will is crucial to avoid unnecessary conflict between your beneficiaries or to ensure they will pay off your debts after you’re gone.

Learn More: What is Probate?

Start Planning Early – Our Attorneys Can Help

It may feel overwhelming to start thinking about estate planning. However, the earlier you have everything in order, the more peace of mind you and your loved ones will have once you have passed. So contact us to schedule a consultation with one of our estate planning experts today.