By Dale Riedel, Esq. · Admitted in New York, Bar No. 5837539
Answer
When you apply for Medicaid coverage of nursing home care in New York, the agency reviews five years of financial transactions. Assets transferred for less than fair value during that period can create a penalty period of ineligibility — which is why giving assets away shortly before needing care usually makes things worse.
How the penalty works
The part families get wrong is the timing.
The penalty does not start when you make the gift. It starts when you would otherwise have qualified and are receiving care — technically, the later of that date or the month of the transfer (Social Services Law §366(5)(e)(5)). In practice, that is the moment you need care and have already given the money away.
So a family who transfers the house to the children a year before a nursing home admission is frequently worse off than one that did nothing. The asset is gone and the coverage is unavailable, simultaneously, at the exact point the care is needed.
What counts as a transfer
More than people expect. Gifts to children, forgiving a loan, selling something below market value, adding someone to a deed, large unexplained withdrawals — all of it is reviewed, and anything unusual needs an explanation.
Planning that works is planning done early
Five years early, as a working rule.
An irrevocable trust established and funded outside the look-back can hold assets so they are not counted. Whether it works depends on its terms — which powers you keep, who can receive principal, and when it was funded. Irrevocability alone does not create Medicaid protection, and a trust drafted for a different purpose may not provide it.
What a spouse at home keeps
Where one spouse needs nursing home care and the other remains at home, New York protects a share of the couple’s assets and income for the spouse at home. For 2026, the spouse at home can keep resources of at least $74,820 and up to $162,660, and the monthly maintenance needs allowance can be up to $4,066.50 when the spouse at home has no income of their own, according to the Department of Health’s GIS 26 MA/03. These figures adjust every January, and the actual amount depends on the couple’s circumstances.
New York also permits spousal refusal. A spouse at home can decline to make their own excess resources or income available for the ill spouse’s care. That can preserve eligibility, but it does not guarantee the assets are protected — the local district can seek a contribution from the refusing spouse, including through a court proceeding. It is a decision to make with advice, not a form to sign. (Social Services Law §366(3)(a).)
Some transfers are exempt
A narrow set is not penalized — transfers to a spouse, to a blind or disabled child, and certain transfers of a home to qualifying family members. Each category has conditions, and whether one applies is a question worth asking before assuming it does. These are conditional exceptions, not permission to give property away without review. (Social Services Law §366(5)(e).)
Home care is different
New York has enacted a 30-month look-back for community-based (home care) Medicaid, but the law makes it subject to federal approval. As of October 9, 2026, CMS still listed that request as pending, so the 30-month rule should not be treated as in effect.
Two things follow. The five-year nursing home look-back applies regardless. And a transfer made while you are receiving care at home can still affect nursing home coverage later. Check the current status before transferring anything — this is the single most common place where out-of-date information circulates.
If care is needed now
Crisis planning has fewer options than advance planning, but it is not nothing.
Four things matter immediately:
- Do not transfer anything before taking advice. This is the moment families cause the damage.
- Start gathering five years of financial records. Banks take weeks to produce old statements and longer for closed accounts — it is the longest lead-time item in any application.
- Find out the discharge date, because it sets the clock.
- Get advice this week, not after the discharge.
The short version
Five years of transfers are reviewed. The penalty starts when you would have qualified, not when you gave the money away. Plan five years early, and if you are already in a crisis, do not transfer anything before taking advice.
Read more: Medicaid Planning · Elder Law · Irrevocable Trusts