A Medicaid Asset Protection Trust in New York is an irrevocable trust that holds your home, savings, and investments so those assets don’t count against Medicaid’s strict resource limits when you apply for long-term care coverage. Once assets are inside, you can’t take them back, and the transfer has to happen at least five years before you apply for nursing home Medicaid. In exchange, a properly drafted MAPT can shield hundreds of thousands of dollars from being spent down on care that costs $13,800 to $15,700 per month in New York.
How the Trust Shelters Your Assets
The mechanic that makes a MAPT work is the split between income and principal. Any income the trust assets generate — interest, dividends, rental payments — still flows to you as the grantor, and Medicaid treats that income as available to help pay your share of care costs. The principal is different. The home, cash balances, and investments held by the trust are legally out of your reach. Because you have no right to withdraw or use them, Medicaid can’t count them as an available resource.
For that shield to hold, the trust has to be irrevocable. Under New York law a lifetime trust is presumed irrevocable unless its terms say otherwise, but MAPT documents spell this out plainly so no Medicaid caseworker can argue the point. You can’t dissolve it, rewrite its core terms, or pull assets back. A family member or another trusted person serves as trustee. If you kept direct control, the Department of Social Services would treat the entire principal as available to you and the arrangement would be worthless.
The trust document also needs to name beneficiaries (typically children or other family members) who will receive the assets when you die, and it should reserve you the right to live in any real property the trust holds for the rest of your life. That reserved right preserves several tax benefits discussed further down.
Why the 2026 Eligibility Limits Force the Issue
For 2026, New York allows an individual applying for Medicaid (including nursing home coverage) to hold only $33,038 in countable assets. A couple is capped at $44,796. Monthly income limits are $1,836 for an individual and $2,489 for a couple. A primary residence is exempt only up to $1,130,000 in equity; above that number, Medicaid won’t cover nursing facility care unless the equity is brought down or the property is moved into a trust before the look-back window closes.1New York State Department of Health. GIS 26 MA/03 – 2026 Medicaid Levels
Almost anyone with a paid-off home, a retirement account, or a modest brokerage balance blows past the $33,038 resource cap. The MAPT is designed to move those assets off the ledger so they no longer block eligibility.
The Five-Year Look-Back and the Penalty Period
Moving assets into a MAPT does not produce instant eligibility. New York Social Services Law § 366 imposes a 60-month look-back on anyone applying for nursing home Medicaid. When you apply, the Department of Social Services reviews every asset transfer you made in the five years before the application date, and any transfer into a MAPT during that window triggers a penalty period during which Medicaid will not pay for your nursing facility care.2New York State Senate. New York Code SOS 366 – Eligibility
The penalty is calculated by dividing the total value of transferred assets by the regional average monthly cost of nursing care. New York publishes those regional divisors each year. For 2026 they range from $13,765 per month in the Western region to $15,675 per month in Rochester, with New York City at $15,282 and Long Island at $15,193.3New York State Department of Health. GIS 25 MA/14 – 2026 Transfer Penalty Regional Rates
Here’s how the math plays out. If you transferred $300,000 into a MAPT and applied for nursing home Medicaid in New York City within five years, the penalty would be $300,000 ÷ $15,282, or roughly 19.6 months. During those 19.6 months, you pay for care yourself. Fractional months count. This is why the standard advice is to create and fund a MAPT at least five years before you expect to need nursing home care. Once 60 months pass, the transferred assets are invisible to Medicaid. The same five-year window applies under federal law through the Deficit Reduction Act of 2005.4Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
Home Care Has a Different, Currently Unenforced Look-Back
The rules are not the same for Community Medicaid, which pays for home care rather than nursing home placement. New York enacted a 30-month look-back for community-based long-term care as part of the Medicaid Redesign Team II reforms in 2020, with enforcement originally set for January 1, 2021. Enforcement was pushed back, first because federal COVID-era maintenance-of-effort rules blocked Medicaid cuts, then because of administrative delays.5New York State Department of Health. 30-Month Lookback for Community Based Long Term Care Services
As of early 2026 the 30-month home care look-back remains unenforced. Transfers into a MAPT do not currently trigger penalties for anyone applying for home care services. The state has not repealed the rule, only delayed it, and once it takes effect the penalty will be calculated the same way as the nursing home penalty. If you’re setting up a MAPT now, plan as if the rule will eventually be enforced.
Protections for Married Couples
When one spouse needs nursing home care, New York doesn’t require the other spouse to become impoverished. Federal spousal impoverishment rules let the community spouse (the one staying at home) keep between $74,820 and $162,660 in 2026, based on half of the couple’s total countable resources at the time the institutionalized spouse enters care. The community spouse also gets a minimum monthly maintenance needs allowance of $4,066.50 as an income floor.1New York State Department of Health. GIS 26 MA/03 – 2026 Medicaid Levels
A MAPT works alongside those protections. If a couple transfers assets into a trust more than five years before either spouse applies, those assets aren’t counted at all — not toward the institutionalized spouse’s resource limit and not toward the community spouse’s allowance calculation. The community spouse ends up with both the trust assets (preserved for the family) and the spousal resource allowance. For couples whose assets sit well above $162,660, a MAPT is often the only way to preserve the surplus.
Setting Up and Funding a MAPT
Creating a MAPT is a two-phase process: drafting and execution, followed by funding. The document is drafted by an elder law attorney and tailored to your assets, family, and goals. Most New York elder law firms charge $3,000 to $7,000, with real property in the mix pushing toward the higher end.
Once drafted, you and the trustee sign in front of a notary. The execution date starts the look-back clock, but only for assets actually transferred into the trust. An executed but unfunded trust protects nothing.
Funding means retitling. For financial accounts you contact each institution with a copy of the trust or a certificate of trust and change the account into the trust’s name. The trust needs its own Employer Identification Number, which you can get for free from the IRS.6Internal Revenue Service. Get an Employer Identification Number
Before drafting starts, gather current statements for every account you plan to move: bank accounts, brokerage accounts, CDs, and life insurance policies. You’ll also need full legal names, addresses, and Social Security numbers for every proposed trustee and beneficiary. These go into a schedule attached to the trust that inventories the transferred assets.
Deeding the House Into the Trust
Moving a home into a MAPT requires recording a new deed with the county clerk in the county where the property sits. The attorney prepares a deed transferring title from you individually to the trustee of the trust. Along with the deed, Form RP-5217 (Real Property Transfer Report) and Form TP-584 (Combined Real Estate Transfer Tax Return) are filed. The RP-5217 filing fee is $125 for residential and farm properties and $250 for all other property types.7New York State Department of Taxation and Finance. Filing Fees for Form RP-5217-PDF, Real Property Transfer Report With county recording charges added, expect total recording-related costs of $200 to $400 for a straightforward residential transfer. Because there is no sale consideration, the transfer generally does not trigger real estate transfer tax, but TP-584 still has to be filed.
The look-back clock starts only when the deed is actually recorded. Until the county clerk stamps and files it, the property is still yours in Medicaid’s eyes. When the five-year window is tight, a delay of even a few weeks matters.
Keeping Your STAR Exemption
Transferring your home into a MAPT does not automatically cost you the STAR exemption, Enhanced STAR for seniors, or veterans’ exemptions. The key is that the trust must give you a lifetime right to occupy the home. As long as you remain a life tenant or hold a reserved right of occupancy, the assessor still treats you as the owner for exemption purposes. If the assessor asks for proof, you supply the trust pages showing the reserved life estate, not the whole trust.
Income Tax and the Step-Up in Basis
A well-drafted MAPT is a grantor trust for federal income tax purposes. You, not the trust, report and pay tax on income the trust generates. Interest, dividends, and capital gains flow through to your personal Form 1040. Depending on the trust’s income, a New York fiduciary return (Form IT-205) may also be required. This may sound like a downside, but it’s the design working as intended, because grantor-trust treatment preserves a major tax benefit at death.
When you die, assets held in a grantor trust receive a stepped-up basis to fair market value on the date of death under federal law.8Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent Say you bought your home for $200,000 and it’s worth $600,000 when you die. If you had given the house to your child outright during your lifetime, your child would inherit your $200,000 basis and owe capital gains tax on $400,000 of appreciation at sale. With the home in a properly structured MAPT at your death, your child’s basis resets to $600,000, and a sale at that price produces no capital gains tax. For families holding appreciated New York real estate, that single feature can save tens of thousands of dollars.
Assets That Do Not Belong in a MAPT
Not everything should go in. Some transfers create tax bills that outweigh any Medicaid benefit.
IRAs, 401(k)s, and other tax-deferred retirement accounts are the biggest trap. You can’t transfer them directly. The account has to be liquidated first, and liquidation triggers income tax on the entire balance in the year of the transfer. A $300,000 IRA could produce a six-figure tax hit that pushes you into top brackets, and the transfer of the after-tax proceeds still starts a five-year clock. Better strategies exist — spending down the IRA for living expenses, doing Roth conversions over several years, or using specific beneficiary designations — but those require individualized planning. The blanket rule is not to move retirement accounts into a MAPT without understanding the full tax cost first.
Money you need for daily life should also stay out. You cannot access the principal once it’s in the trust. Keep enough in your own accounts to cover living costs, emergencies, and the income share you’ll owe toward care if you go on Medicaid. Most families fund the MAPT with the bulk of their savings and the home while keeping a personal checking account and several years of reserves.
Timing Decides Whether This Actually Works
The five-year look-back means the value of a MAPT depends almost entirely on when you set it up. Transfer assets into the trust and then need nursing home care three years later, and the penalty calculation can leave you responsible for hundreds of thousands of dollars in care costs with no Medicaid coverage. New York nursing home rates run $165,000 to $188,000 per year depending on the region.9New York State Partnership for Long-Term Care. Estimated Average New York State Nursing Home Rates A 20-month penalty period at those rates translates to roughly $275,000 to $315,000 out of pocket before Medicaid starts paying.
People who set up a MAPT in their late 50s or early 60s, while healthy and not yet thinking about long-term care, get the most from it. The trust sits quietly, the look-back window eventually closes, and when care is needed the assets are fully protected. Those who wait until a health crisis is on the horizon often find that the penalty makes the trust useless for nursing home coverage, though the current gap in home care enforcement may still offer some protection for community-based services.
A MAPT is not reversible and it is not free. For New York families with a home and moderate savings, it remains one of the few tools that can keep a lifetime of assets from being consumed by the cost of long-term care.