For most New Yorkers, the “American Dream” is simple: work hard, buy a home, pay off the mortgage, and leave that home to your children. But in 2026, a looming financial threat puts that dream at risk for anyone over the age of 65.
That threat is the catastrophic cost of Long-Term Care. In New York City and Long Island, a nursing home now costs between $18,000 and $24,000 per month. That is over $250,000 a year. Medicare pays $0 for this custodial care. If you do not have millions in cash or expensive insurance, you must pay out of pocket until you are destitute. Only then will Medicaid step in.
This means your home—your most valuable asset—is effectively a “piggy bank” for the nursing home. But it doesn’t have to be.
As a New York estate planning attorney with over 30 years of experience, I, Russel Morgan, have helped over 1,000 families use a specific legal tool to secure their legacy: the Medicaid Asset Protection Trust (MAPT). In this comprehensive guide, I will explain exactly what this trust is, how it works in the 2026 regulatory environment, and how it allows you to qualify for care without losing everything you have built.
What is a Medicaid Asset Protection Trust (MAPT)?
A MAPT is a specialized form of Irrevocable Trust designed specifically to comply with New York State and Federal Medicaid laws. Its primary purpose is to separate you (the “Grantor”) from the ownership of your assets (the “Principal”) so that Medicaid cannot count those assets when determining your eligibility for care.
The “Legal Fiction”
To qualify for Medicaid, you generally cannot have more than ~$31,175 in assets. If you own a $1.5 million home in Queens, you are not eligible.
However, if you transfer that home into a MAPT, the law views it as follows:
- You no longer own the home (so you are “poor” enough for Medicaid).
- The Trust owns the home.
- But: You still have the right to live there for the rest of your life.
It is the best of both worlds: you get the government benefits, and your family keeps the house.
How the MAPT Works: The 3 Key Players
Understanding the structure is critical to alleviating fears about “losing control.”
1. The Grantor (You)
You create the trust. You transfer your assets (home, savings, stocks) into it.
Your Rights:
- You retain the right to live in the home (Life Estate). No one can kick you out.
- You retain the right to receive all income generated by the trust assets (e.g., dividends, interest, or rent if you rent out the house).
- You retain the right to change the Trustee (if you don’t like how they are acting).
- You retain the right to change the Beneficiaries (Power of Appointment).
Your Restriction: You cannot access the Principal. You cannot pull $50,000 out of the trust to go to Vegas. If you could, Medicaid would say, “If you can take it, use it to pay for your care.”
2. The Trustee (Usually an Adult Child)
This is the person who manages the trust. In 99% of our cases, clients choose their most responsible adult child.
Their Job: They sign the checks, manage the investments, and handle the real estate. They have a fiduciary duty to follow the rules of the trust.
3. The Beneficiaries (Your Heirs)
These are the people who will inherit the assets when you pass away. Because the assets are in a trust, they bypass probate completely.
Why You Need a MAPT in 2026 (The “Look-Back” Clock)
Timing is everything. You cannot wait until you are sick to set this up.
The 5-Year Nursing Home Look-Back
When you apply for Nursing Home Medicaid, the state audits your finances for the last 60 months (5 years). If you transferred your home to a MAPT 4 years ago, you fail. If you transferred it 5 years and 1 day ago, you pass. The house is 100% protected. Medicaid pays for your care, and they cannot touch the house.
The 30-Month Home Care Look-Back
Starting in 2025/2026, New York is enforcing a 2.5-year look-back for Community Medicaid (Home Health Aides). This makes the MAPT essential even for those who want to stay at home. By moving assets into the trust now, you start the clock. In 30 months, your assets are safe, and you can access home care benefits without spending down your savings.
Common Myths and Fears (Debunked)
Many seniors are terrified of the word “Irrevocable.” Let’s clear up the misconceptions.
Myth 1: “I lose control of my house.”
Fact: You retain a “Life Estate.” This gives you the exclusive right to occupy the property. You still pay the bills and taxes. Your Trustee (child) cannot sell the house without your permission, and they cannot evict you.
Myth 2: “I can never sell the house.”
Fact: The Trust *can* sell the house. If you want to downsize from a house in Long Island to a condo in Florida, the Trustee sells the house. The check is made out to “The Trust.” The Trust then buys the condo. You simply move into the new condo. The protection continues seamlessly.
Myth 3: “I lose my STAR Property Tax Exemption.”
Fact: New York law allows the STAR exemption, Enhanced STAR, and Veterans exemptions to continue even if the home is in a MAPT, provided the Grantor retains a Life Estate.
Myth 4: “My children’s creditors can take the house.”
Fact: This is why a Trust is better than a simple deed transfer. If you just give the house to your son, and he gets sued or divorced, the house is at risk. If the house is in a MAPT, your son does not own it yet. His creditors cannot touch it.
MAPT vs. Revocable Living Trust: Know the Difference
This is the most common mistake we see.
| Feature | Revocable Living Trust | Medicaid Asset Protection Trust (MAPT) |
|---|---|---|
| Primary Goal | Avoid Probate. | Avoid Probate + Protect Assets from Nursing Home. |
| Can you access Principal? | Yes, anytime. | No. (Income only). |
| Medicaid Protection? | ZERO. Medicaid counts it as your asset. | 100% (after 5 years). |
The “Safety Valve”: What If You Need the Money?
Clients ask, “What if a dire emergency happens and I need the money inside the trust?”
While *you* cannot revoke the trust alone, New York law permits revocation if all parties consent. If you and all your beneficiaries (e.g., your three kids) agree in writing, the trust can be revoked, and the assets returned to you. This provides a “fail-safe” for extreme situations.
Step-by-Step: How Morgan Legal Group Builds Your MAPT
Creating this trust requires precision. One wrong clause can disqualify you from Medicaid.
- Analysis: We review your income, assets, and family dynamics to determine what goes in the trust and what stays out.
- Drafting: We draft the Trust Indenture, including specific “Power of Appointment” clauses to maintain tax advantages (Step-Up in Basis).
- Funding: We prepare the new Deed to transfer your real estate into the Trust. We guide you on retitling investment accounts.
- Maintenance: We advise you on how to handle tax reporting (Grantor Trusts are usually tax-neutral) and how to manage income.
Conclusion: The Ultimate Insurance Policy
A Medicaid Asset Protection Trust is like buying fire insurance. You hope you never need it. But if the “fire” of a long-term care crisis hits, it is the only thing standing between your family and financial ruin.
In 2026, with costs rising and rules tightening, the wait-and-see approach is dangerous. Schedule a consultation with Morgan Legal Group today. Let us build the fortress that keeps your home in your family, where it belongs.
For more information on Medicaid eligibility and trust rules, you can consult the Official Medicaid Estate Recovery Policy.
