Irrevocable Trusts and the Medicaid 5-Year Look-Back in NY

Can an irrevocable trust protect your home and savings from nursing-home costs in New York? Yes — but only if you fund it early, because every transfer into an irrevocable trust is subject to Medicaid’s 5-year look-back period. When you apply for institutional (nursing-home) Medicaid in New York, the program reviews the prior 60 months of your finances. Assets moved into a properly drafted Medicaid Asset Protection Trust (MAPT) before that window opens are generally shielded; assets moved in during the window can trigger a penalty period of ineligibility. This Q&A walks New Yorkers through the most common questions we hear at Morgan Legal Group about irrevocable trusts, the look-back, and how the two fit together under New York law.

What Is an Irrevocable Trust Under New York Law?

New York trusts are governed by the Estates, Powers and Trusts Law (EPTL) Article 7. An irrevocable trust is one that — as the name suggests — generally cannot be amended or revoked once it is created and funded. You give up direct control over the assets you place inside it, and in exchange the trust delivers benefits a revocable trust cannot: estate-tax reduction, asset protection, and Medicaid planning.

This is the key distinction many families miss. A revocable living trust keeps you in full control, avoids probate, and manages your affairs if you become incapacitated — but it does not protect assets from Medicaid or reduce your taxable estate, because you still legally own everything inside it. An irrevocable trust gives up control precisely so the assets no longer count as yours.

Feature	Revocable Living Trust	Irrevocable Trust
Can you amend or revoke it?	Yes	Generally no
Avoids probate?	Yes	Yes
Protects assets from Medicaid?	No	Yes (after 5-year look-back)
Reduces NY taxable estate?	No	Yes (if properly structured)
You keep full control?	Yes	No (a trustee controls assets)

For a fuller comparison of trust types, see our trusts overview.

What Is the Medicaid 5-Year Look-Back in New York?

When you apply for institutional Medicaid to cover long-term nursing-home care, New York’s Department of Social Services examines your financial records for the 60 months (5 years) immediately before the application date. Any uncompensated transfer — a gift to a child, or a transfer of your home into an irrevocable trust — made during that period can create a penalty period during which you are ineligible for Medicaid, even though you have already spent down your assets.

The strategy, therefore, is timing. If you transfer your home and savings into a Medicaid Asset Protection Trust today and do not need nursing-home care for at least five years, those assets fall outside the look-back window and are protected.

Important New York note: As of this writing, the 5-year look-back applies to institutional (nursing-home) Medicaid. New York’s separate community-based (home-care) Medicaid program has its own evolving rules and timelines. Because these rules change, you should confirm the current community-care look-back status with an elder-law attorney before relying on any transfer strategy.

How Does an Irrevocable Trust Beat the Look-Back?

An irrevocable trust works with the look-back, not against it. Here is the logic:

1. You transfer assets in early. The home, brokerage accounts, or cash go into the trust while you are healthy.
2. The 5-year clock starts. Each asset’s transfer date begins its own look-back countdown.
3. You are no longer the legal owner. Because the trust is irrevocable, the assets are removed from your countable estate for Medicaid purposes.
4. You retain limited benefits. A well-drafted MAPT can let you keep the right to live in the home and to receive trust income, while protecting the principal.
5. After 60 months, the assets are protected. Once the look-back window passes, those assets cannot disqualify you from nursing-home Medicaid.

This is why elder-law attorneys repeat one phrase: the best time to do Medicaid planning was five years ago; the second-best time is today.

Does an Irrevocable Trust Also Save NY Estate Tax?

It can. Assets properly placed in an irrevocable trust are generally removed from your taxable estate. This matters in New York because of the state’s unusual estate-tax “cliff.”

For 2026, the New York basic exclusion amount is $7,350,000. New York does not phase out the exemption gradually — instead, once your estate exceeds 105% of the exclusion ($7,717,500), you lose the entire exemption and the estate is taxed from the first dollar. Families near that threshold can fall off the cliff and owe tax on the whole estate. Moving appreciating assets into an irrevocable trust during life is one tool to keep an estate below the cliff. (By contrast, a revocable trust offers no estate-tax benefit, since the assets remain yours.)

What Are the Trustee’s Duties in a New York Irrevocable Trust?

Because you give up control, who you name as trustee matters enormously. Under New York law, a trustee is a fiduciary and must follow:

• The prudent-investor standard for managing and investing trust assets (EPTL Article 11-A);
• A duty of loyalty — acting solely in the beneficiaries’ interest, never self-dealing; and
• A duty to account to the beneficiaries, keeping clear records and reporting.

New York’s SCPA and EPTL set out statutory commission schedules that govern what a trustee may be paid. Ongoing oversight and compliance are why many families use professional trust administration support.

What If a Beneficiary Has Special Needs?

Medicaid planning and disability planning often overlap. If a trust beneficiary receives means-tested benefits such as Medicaid or SSI, an outright inheritance can disqualify them. A Supplemental (Special) Needs Trust under EPTL 7-1.12 holds assets for a disabled beneficiary’s benefit without counting against those programs. Learn more on our special needs trust page.

Frequently Asked Questions

Q: Can I be the trustee of my own Medicaid Asset Protection Trust?
A: Generally no. To protect the assets, you cannot retain the kind of control that comes with being the trustee. Most New Yorkers name an adult child or another trusted person as trustee while reserving limited rights, such as living in the home.

Q: Can I get my house back out of the irrevocable trust if I change my mind?
A: Because the trust is irrevocable, you generally cannot simply undo it. This is by design — the loss of control is what removes the assets from your countable estate. Careful drafting and an honest conversation about your goals beforehand are essential.

Q: Does transferring my home into the trust trigger the look-back even if I keep living there?
A: The transfer itself starts the 5-year clock for that asset. Retaining a life-use right to live in the home is common and does not eliminate the look-back — it simply preserves your ability to remain in the residence. Timing is what protects the asset.

Q: Is an irrevocable trust better than just gifting assets to my kids?
A: Both an outright gift and a transfer to an irrevocable trust are subject to the same 5-year look-back. But a trust adds protection a direct gift cannot: the assets are shielded from your children’s creditors, divorces, and lawsuits, and you keep structured benefits like income or the right to live in your home. To weigh trusts against other tools, see trust vs will.

Talk to a New York Trust Attorney

Irrevocable trusts are powerful, but they are unforgiving — once funded, they are hard to undo, and the 5-year clock rewards families who plan early. The right structure depends on your assets, your health, your family, and where you fall relative to New York’s estate-tax cliff.

Russel Morgan, Esq. and the team at Morgan Legal Group help New York families design Medicaid Asset Protection Trusts and broader estate plans that fit their lives. Schedule your 30-minute consultation today.