What Does Your Attorney Do First?

Step 1: Conduct a Comprehensive Financial Assessment

Qualifying for Medicaid can be complex, with strict income and asset limits that vary depending on the type of care you need. Our Medicaid planning attorneys carefully assess your financial situation, help you structure your resources appropriately, and guide you through the documentation and application process to ensure your eligibility while protecting what matters most.

How Does Your Medicaid Planning Attorney Restructure Your Assets?

Step 2: Convert Countable Assets to Exempt Assets

Using Medicaid’s own rules, an experienced professional Medicaid planner recognizes specific assets that can be converted into assets that Medicaid will not count against your eligibility.

Some of the most common opportunities for converting countable assets into exempt assets include:

• Paying down or paying off the mortgage of your home.
• Making necessary repairs to the home, including, but not limited to, those needed for accessibility (bathroom updates, ramps, doorway widening, counter height adjustments, intercoms, etc.)
• Buying a new, more reliable vehicle.
• Prepaying funeral arrangements.

By investing in your own exempt assets, your countable assets are reduced but you receive the value of those funds rather than being required to pay for nursing home expenses.

Step 3: Maximize Spousal Protections

When one spouse needs Medicaid benefits to afford the cost of nursing home care, the non-applicant spouse still living at home is legally entitled to substantial protection from becoming impoverished. In New York, the non-applicant spouse, referred to as the “community spouse,” can retain up to $162,660 of the couple’s combined assets. This is known as the Community Spouse Resource Allowance (CSRA).

The community spouse is also entitled to a minimum monthly income that Medicaid will not count against the applicant spouse for eligibility purposes. In 2026, the Minimum Monthly Maintenance Needs Allowance (MMMNA) permits the community spouse to retain up to $4,066.50 of the couple’s combined income each month.

In some situations, it may be necessary to employ what is called “spousal refusal.” Under New York and federal law, a community spouse whose income or assets far exceed the Community Spouse Resource Allowance or the MMMNA is responsible for paying for the applicant-spouse’s care. In such a circumstance, the community spouse can declare their refusal to pay or make any of their assets available to repay Medicaid.

This strategy enables the community spouse to avoid spending down their assets. Legally, the State has a right to file suit against the refusing spouse, but rarely does so in practice. Instead, the State of New York Estate Recovery Program files a claim against the benefit recipient’s estate at the time of their death.

These issues may also intersect with rules explained in the Medicaid Estate Recovery Program guidance.

Families also frequently ask whether a parent must sell their house to pay for a nursing home. In many cases, the family home remains exempt for Medicaid eligibility purposes, particularly when a community spouse continues to live there, although additional planning may be needed to protect it from future estate recovery claims.

In most cases, the Estate Recovery claim can be negotiated down. Even if unsuccessful or if no negotiation takes place, the amount of Medicaid’s claim is typically twenty to thirty percent lower than what private individuals would have paid for the same nursing care.

Step 4: Implement Legally Compliant Transfer Strategies

Before implementing any transfer strategy, families should understand New York’s Medicaid gifting rules and five-year look-back period.

There are several strategies for retaining a Medicaid applicant’s assets that involve the transfer of those assets.  Such strategies include:

Caretaker Contracts

In many cases, family members have provided daily care for ill or aged relatives for months or years before their condition requires residential nursing home care. In these situations, an attorney can draft a caregiver agreement that retroactively compensates those family members for the valuable services they rendered. Such an agreement must be accompanied by documentation of the extent and duration of this care for Medicaid to recognize its validity.

Gift and Loan

If spending down your assets is required for you to become Medicaid eligible, you will be assessed a “penalty period.”  A gift and loan strategy acknowledges that an uncompensated transfer will result in the imposition of a penalty period. This strategy involves making a gift to a loved one equal to half of your excess assets and then drafting a promissory note to loan the remaining excess assets. The repayments from the loan, combined with the applicant’s monthly income are used to cover nursing home costs during a penalty period imposed by Medicaid. The promissory note must be actuarially sound, with equal monthly payments, and cannot be canceled upon the lender’s death.

In some situations, structured financial tools such as a Medicaid compliant annuity strategy may be considered when reducing spend down.

This plan permits you to provide a loved one with a financial gift and preserve approximately half of your assets, while still securing the care you need.

Each of these strategies requires the technical knowledge and practical experience that comes from years of working with clients who need reliable solutions when facing a Medicaid crisis. At Ely J. Rosenzveig & Associates, we can analyze your specific circumstances and determine which approaches will be most effective for you and your family.

Step 5: Preparing and Submitting a Strategic Medicaid Application

Once a plan is in place, you can begin preparing and submitting a comprehensive Medicaid application. This requires extensive documentation, including five years of financial records, medical documentation, property deeds, and detailed explanations of any transactions that might raise questions during Medicaid’s review.