As New York Estate Planning & Elder Law Attorneys, we are often asked by our clients:
- How do I protect my home from New York probateand nursing home costs?
- Should I file a life estate deedto protect my home from New York probate and nursing home costs?
- Should I create a living trustprotect my home from New York probate and nursing home costs?
- Should I file a transfer on death deedto protect my home from New York probate and nursing home costs?
There are five options to protect your NY home from the costs of probate and nursing home costs? You will still be entitled to property tax exemptions with all of these. Which of the five options is best for you depends on your answers to the following questions:
- How long have you owned your home and how much did you pay for it?
- Do you intend to sell your home within the next few years?
- What other assets do you own?
- Do you have any disabled children?
- Do any of your children live with you?
- Do any of your siblings live with you?
- Do you have long term care insurance?
- How is your health and your spouse’s health?
Consult with an accountant and Elder Law Attorney to determine which of these planning options is best for you and your family:
- LIFE ESTATE DEED: Deed your home to your children and retain life use.
The advantages of the NY life estate deed are:
- Preserving your assets from nursing home costs five years after the deed is filed.
- Avoiding probate.
- Stepped-up cost basis when your children sell the home.
The disadvantages of a NY life estate deed are:
- If you decide to sell your home, the five-year look-back period would start over with your new home.
- If your children file bankruptcy or are sued, the home will be affected.
- You will not be entitled to the $500,000 exclusion on capital gains if you sell your home.
- You may have potential problems finding a good rehab facility if you are hospitalized and do not have other substantial other assets.
- IRREVOCABLE LIVING TRUST: Deed your home to your children, as Trustees. The advantages of a NY irrevocable trust are:
- Preserving your assets from nursing home costs five years after the deed is filed.
- Avoiding probate.
- If you decide to sell your home, the trustees can purchase another home for you with the proceeds which don’t affect the five-year look-back period.
- Placing other assets in the name of trust to protect them.
The disadvantage of a NY irrevocable trust is you may have a problem finding a good rehab facility if you are hospitalized and do not have other substantial assets.
- REVOCABLE LIVING TRUST :Avoids probate and results in no capital gains tax, but it does not protect your home from nursing home costs.
- TRANSFER ON DEATH DEED: Avoids probate but it does not protect your home from nursing home costs and Medicaid estate recovery.
- POWER OF ATTORNEY: If you do not use options 1 or 2 before being admitted to a nursing home, the power of attorney, if it has gifting powers, can be used to:
- Gift approximately one-half of your assets, including the proceedsof the sale of your home, to your children utilizing emergency Medicaid Planning with Promissory Notes.
- Transfer your home to your caregiver childor a disabled child without incurring a Medicaid penalty .
- Transfer your home to your siblingswithout incurring a Medicaid penalty .
- Transfer your home to your spouse without incurring a Medicaid penalty.
For further information, read our 2025 Medicaid guide.
Call or text experienced NY estate planning attorney Robert Friedman at 716.541.3405 for a free estate planning consultation.