Planning for long-term care can feel overwhelming, especially when you begin to consider how Medicaid eligibility affects your financial future. In New York, Medicaid trusts are one of the most important tools for protecting assets while still qualifying for much-needed healthcare benefits. But not all trusts are the same—and the rules are very specific to New York State.

In this post, we’ll break down the main types of Medicaid trusts in NY, how they work, and why they matter for your estate and healthcare planning.

Why Medicaid Trusts Matter in New York

New York is one of the most expensive states for long-term care. Nursing homes can cost upwards of $150,000 per year, and even in-home care expenses add up quickly. Medicaid helps cover these costs, but strict income and asset limits mean many families risk spending down their life savings before qualifying.

That’s where Medicaid trusts come in. By properly structuring assets, families can safeguard their financial legacy while ensuring access to care.

Types of Medicaid Trusts in New York

1. Medicaid Asset Protection Trust (MAPT)

Purpose: To protect assets like your home or savings from being counted against Medicaid eligibility.

Key Features:

• Must be irrevocable—you cannot change or revoke it once established.
• You can no longer directly access the assets, but you may still benefit indirectly (e.g., living in a home owned by the trust).
• Transfers into a MAPT are subject to Medicaid’s five-year look-back for nursing home coverage. That means you need to plan early.

Benefit: Preserves assets for your heirs while meeting Medicaid’s financial requirements.

2. Pooled Income Trust

Purpose: To help individuals who are disabled and have income above Medicaid’s eligibility threshold.

Key Features:

• Managed by nonprofit organizations, with each participant having their own sub-account.
• Income deposited into the trust is not counted for Medicaid eligibility.
• Funds can still be used to pay for living expenses like rent, utilities, and personal needs.

Benefit: Allows people with higher monthly income to still qualify for Community Medicaid (home- and community-based services).

3. Special Needs (Supplemental Needs) Trust

Purpose: To allow disabled individuals to receive financial support without losing Medicaid benefits.

Key Features:

• First-party trusts use the beneficiary’s own assets (and must include a Medicaid payback provision).
• Third-party trusts are funded by family or others and do not require Medicaid reimbursement.
• Assets can be used for supplemental expenses—anything that improves quality of life but isn’t covered by Medicaid.

Benefit: Ensures disabled individuals can enjoy a better standard of living without jeopardizing eligibility.

Estate Recovery in New York

Even with Medicaid coverage, New York has an estate recovery program that seeks reimbursement from assets after death. Properly structured trusts—especially MAPTs—are designed to protect assets from being subject to this recovery, ensuring your legacy passes on to your chosen beneficiaries.

When to Start Planning

The biggest mistake people make is waiting too long. Because of the five-year look-back rule, setting up a Medicaid trust early is essential. The sooner assets are moved into a trust, the sooner the clock starts ticking toward eligibility protection.

Medicaid trusts in New York can be powerful tools, but they are also complex and highly regulated. The type of trust that’s right for you depends on your financial situation, health needs, and long-term goals.

Working with an experienced elder law or Medicaid planning attorney is the best way to ensure your trust is properly structured and compliant with New York rules. With the right planning, you can protect your assets, secure care, and provide peace of mind for your family.