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A life estate deed can play a big part in the way you pass down your home in New York. With this tool, you hand over the title yet keep the right to live in the house for the rest of your life. This move may help you when you apply for Medicaid because the state might not count the home as part of your money. Still, Medicaid rules are detailed, and a small misstep can put your care or your house at risk.

You do not have to face these rules alone. Engaging with a knowledgeable Long Island Medicaid planning attorney from Schlessel Law PLLC can provide invaluable assistance. We can sit with you, hear your goals, explain how gifts affect Medicaid eligibility, advise you on the assets you can keep on Medicaid, and build a deed that fits your budget and care needs.

To learn more about how we can help with your estate planning needs, call Schlessel Law PLLC today at (516) 574-9630. Our attorneys can work towards securing your assets and ensuring your planning strategies are effective and compliant with New York laws.

Life Estate Deeds in New York

A life estate deed lets you keep living in your home for life while already setting up who takes the house later. You stay in the home, and ownership pass to the person you name when you pass.

This deed splits ownership. You, the life tenant, keep full use and care of the home. The remainderman, whom you choose, holds the future right to own it. New York law supports this plan. You stay in charge day to day; however, you may not sell or give away the house unless the remainderman agrees.

Key Parties Involved in a Life Estate Deed: Grantor and Remainderman

Two people make a life estate work. You, the grantor (also called the life tenant), sign the deed, keep life-long use, pay taxes, and handle upkeep. The remainderman waits. Their right turns into full ownership when your life interest ends, and they do not need to go through the court process to claim it.

Differences Between Life Estate Deeds and Other Property Transfers

Life estate deeds are distinct from other forms of property transfer such as fee simple deeds (the complete ownership of property) or revocable living trusts (where control can be adjusted or revoked by the grantor). Unlike these property transfer options, a life estate deed offers a fixed plan where the grantor secures their residency for life while preemptively arranging the property’s future ownership. This is particularly beneficial in estate planning as it provides clear, legally enforceable directions for the property’s succession, potentially simplifying the process and reducing future legal disputes.

How a Life Estate Deed Can Assist in Medicaid Planning and Asset Protection

A life estate deed can serve as a strategic tool in safeguarding your assets while ensuring that Medicaid eligibility requirements are met. A property transferred into a life estate is generally not considered a countable asset by Medicaid once the look-back period is satisfied. This can help preserve the value of the property for future generations while potentially avoiding the costly implications of estate recovery. Additionally, because the original homeowner retains the right to live in the home, it provides stability and security without compromising eligibility for Medicaid benefits.

To fully leverage the benefits of a life estate deed and mitigate potential risks, it is crucial to receive tailored legal advice. Our attorneys at Schlessel Law PLLC are committed to providing detailed, client-focused counsel that addresses each individual’s unique circumstances. Whether you are exploring options for Medicaid planning, asset protection, or estate planning in general, our team can assist you in making informed decisions that protect your interests and those of your loved ones. Contact us today to learn more about how we can assist you.

Long Island Medicaid Planning Attorney

Seth Schlessel

Seth Schlessel is the Managing Member and Founder of Schlessel Law PLLC, a Long Island-based law firm with a strong focus on Medicaid planning. He not only manages the firm’s daily operations but also takes the lead on the legal matters, offering clients his strategic insight. His hands-on approach ensures that clients receive personalized attention, particularly in Medicaid eligibility and asset protection cases.

A graduate of Touro Law School in 2013, Seth distinguished himself in several leadership roles, including Vice President of the Sports and Entertainment Society. He was admitted to the New York Bar in 2014 and has since built a reputation for navigating challenging Medicaid planning issues with integrity, precision, and a commitment to client advocacy.

Legal Framework Governing Life Estates and Medicaid in New York

In New York, the interplay between life estate deeds and Medicaid eligibility is governed by a set of laws and regulations. For anyone involved in estate planning or elder law in New York, understanding these legal standards is crucial for making informed decisions about property and long-term care planning.

Medicaid Eligibility Requirements in New York

Medicaid eligibility in New York is determined by a variety of factors, including income, age, disability status, and other resources. For elderly residents, who often turn to Medicaid to cover long-term care costs, the asset limit is particularly pivotal. Property ownership, as a significant component of an individual’s asset portfolio, is scrutinized under Medicaid’s eligibility requirements. The rules are designed to ensure that those who genuinely need assistance receive it, while also protecting the state’s financial resources.

How Property Ownership Affects Medicaid Eligibility

The ownership of property can have a significant impact on an individual’s Medicaid eligibility. Generally, the primary residence is considered an exempt asset, provided the Medicaid applicant, or their spouse, is living in the home. However, the introduction of a life estate deed into this equation alters the scenario. The life estate interest is valued differently from full property ownership, affecting how assets are calculated by Medicaid. This can have both beneficial and detrimental impacts on the eligibility of an individual applying for Medicaid services.

Using Life Estate Deeds for Medicaid Planning

One of the primary benefits of using a life estate deed in Medicaid planning is the ability to preserve home ownership within the family while potentially protecting the asset from Medicaid estate recovery. This planning tool allows the original homeowner, or grantor, to remain in the home for life, with the peace of mind that their residence will not be subject to estate recovery after their death, as the property automatically passes to the remainderman. Additionally, since the life estate is often not considered a countable asset for Medicaid eligibility purposes, it can help the grantor qualify for Medicaid without necessitating the sale of the home.

Specific New York Statutes Impacting Life Estate Deeds

New York law includes specific statutes that detail how life estates are treated in the context of Medicaid eligibility. These laws are critical in understanding how life estate deeds are valued and how the remainder interest is assessed for Medicaid eligibility and potential recovery purposes. The use of a life estate reduces the value of the property transferred to the children, which can decrease the amount assessed by Medicaid for uncompensated asset transfers compared to an outright gift.

A life estate deed allows the property to bypass the probate process. As a result, it is often the case, although not formally codified, that in New York State, such properties are not subject to claims by Medicaid for estate recovery. This provision can be used provided the life estate was established more than five years before the grantor applies for Medicaid benefits. The grantor also continues to benefit from any tax advantages associated with home ownership, such as residential tax exemptions and the exclusion from capital gains tax on personal residences. Additionally, upon the death of the grantor, the property’s basis value is adjusted to its market value, potentially reducing capital gains tax for the heirs when they decide to sell the home.

Potential Risks and Downsides of Life Estate Deeds

Incorporating a life estate deed into one’s estate planning is a strategy often used in New York to facilitate property transfer and manage Medicaid eligibility. However, this approach can introduce various challenges that could affect not only the property transfer process but also the Medicaid eligibility of the grantor and the secure ownership of the property by the remaindermen.

Challenges When Selling the Property

Selling a property held under a life estate deed during the grantor’s lifetime can complicate the distribution of sale proceeds. The grantor, who retains the right to live on the property, must agree with the remaindermen on how proceeds are divided, based on the value of the life estate and the remainder interest. This process can affect the grantor’s Medicaid eligibility, as receiving a portion of the sale proceeds might increase their countable assets, potentially disqualifying them from Medicaid benefits until those assets are spent down.

Tax Implications for Heirs

The tax implications for heirs, or remaindermen, can also be significant. If the property has appreciated in value, the lack of eligibility for the capital gains tax exclusion on a residence not used as the primary home by the remaindermen can lead to substantial tax liabilities. This not only affects the financial benefits the remaindermen receive but could also impact the grantor’s estate planning intentions, particularly if the goal was to minimize tax burdens on the heirs.

Will My STAR, Veteran, or Senior Property-Tax Exemptions Survive a Life-Estate Transfer?

Thinking about giving your house to your kids while keeping a life

Paying for a nursing home in New York can drain a lifetime of savings before you know it. A private room often costs more than $176,000 a year. That figure can shake your family’s sense of security.

Medicaid can cover much of the bill, yet the program looks closely at your assets first. The rules can seem strict, and shifting your money in the wrong way may lead to long wait times for help. Careful planning now can help you preserve more of your assets while ensuring you can access the care you may need in the future.

At Schlessel Law PLLC, our Long Island Medicaid planning attorneys are well-versed in Medicaid planning. We offer tailored guidance on how to protect your assets while maintaining eligibility for Medicaid. Our attorneys can help you make informed decisions on legal strategies to protect your financial interests, guiding you through asset structuring and Medicaid planning.

If you are concerned about how nursing home care can impact your assets or whether a nursing home can take your home if it’s in a trust, reach out to Schlessel Law PLLC at (516) 574-9630 today. Let us assist in creating a strategy that aligns with your long-term care needs and family goals, ensuring that you can take full advantage of Medicaid benefits while preserving your assets.

Asset Consideration for Nursing Home Care in New York

Thinking about a move to a nursing home can feel heavy, and the money side of it often adds extra worry. In New York, Medicaid can help pay for a portion of the cost, including the room, meals, daily care, and medical services you receive. To qualify, you must stay within strict income and asset limits set by the state. Knowing how your savings, home, and other property count toward those limits will help you make clear choices.

Asset Evaluation Process When Entering a Nursing Home

When you arrive at a nursing home, the staff collects financial details to see if you can cover the bills on your own or if Medicaid should step in. They look at all “countable” assets, like bank accounts and investments, then compare them with “non-countable” items the rules allow you to keep, such as certain personal belongings and, in many cases, your home. New York’s rules spell out what falls on each list. Learning these rules early gives you time to arrange your assets in a way that works for you.

A big question for many families is how to keep what they have worked for. While you receive care, the nursing home cannot simply take your assets. After you pass away, though, the state may try to recover some costs through the Medicaid Estate Recovery Program (MERP). Planning ahead can help lower that risk and keep more of your estate for your loved ones.

Financial Eligibility for Medicaid Nursing Home Coverage

When applying for Medicaid coverage for nursing home care, there are specific financial criteria that need to be met. Medicaid examines both the applicant’s income and their resources to determine eligibility.

Income Considerations

Income refers to regular monetary receipts such as Social Security benefits, pension payments, or distributions from an IRA. For those residing in a nursing home under Medicaid coverage, the individual is allowed to keep $50 per month as a personal needs allowance. All additional income must be contributed towards the cost of their care in the nursing home. It is important to note that, in contrast to other Medicaid programs like Community Medicaid, nursing home residents cannot use a pooled income trust to manage excess income to qualify for Medicaid.

Why Pooled-Income Trusts Stop Working Once You Enter a Facility

When you live at home, a pooled-income trust feels like a lifeline. You send the dollars that push you over Medicaid’s income limit to the trust. The trust then pays your rent, utilities, food, or other bills, and Medicaid treats that income as gone, so you stay covered without losing the roof over your head.

That balance ends the day you move into a nursing home or other long-term care facility. New York switches you to institutional budgeting. Instead of a spend down, the state sets a Net Available Monthly Income line called NAMI. Almost all of your income, except about fifty dollars for personal needs, must flow straight to the facility. Depositing money into a pooled trust no longer lowers NAMI, so the trust stops doing its job. Funds already in the account may settle old bills, yet fresh deposits will be counted.

We know this change feels harsh, yet you still have options. You might use short rehab then return home with Community Medicaid. You could rearrange assets before admission or explore other trust tools that fit a longer stay. Good timing matters, and every rule carries fine print. A Long Island Medicaid planning attorney can review your records, speak with the trust, and map out next steps that guard your savings and support your care. With planned action, you can keep control of comfort items and still meet Medicaid rules.

Resource Assessments

Resources encompass the applicant’s assets, including savings accounts, stocks, bonds, real estate properties, and IRAs that are not currently in distribution. In New York State, the resource limit for nursing home residents applying for Medicaid in 2025 is set at $32,396. Assets exceeding this amount must be spent down on care and related expenses before the applicant can qualify for Medicaid coverage.

Considering the demanding nature of managing finances to meet Medicaid eligibility requirements, it is often beneficial for applicants to consult with an elder law attorney. These legal professionals can provide valuable guidance on how to effectively reduce assets through legally acceptable strategies to preserve as much of the applicant’s wealth as possible, while still achieving Medicaid eligibility.

Long Island Medicaid Planning Attorney

Seth Schlessel

Seth Schlessel is the Managing Member and Founder of Schlessel Law PLLC, a firm recognized for its compassionate and strategic approach to elder law and Medicaid planning across Long Island. As team leader, Seth is involved in every aspect of the firm’s day-to-day operations, while personally managing its client matters. His leadership is grounded in a client-first philosophy, ensuring each case is handled with diligence and empathy.

A graduate of Touro Law School in 2013, Seth distinguished himself early through his active participation in student leadership, including serving as Vice President of the Sports and Entertainment Society. Admitted to the New York Bar in 2014, Seth has since developed a strong reputation for guiding individuals and families through Medicaid planning, asset protection, and long-term care strategies with clarity and precision.

Can a Nursing Home Take a Person’s Assets?

Nursing homes themselves do not have the legal authority to directly seize assets from residents merely because they are receiving care. However, if you fail to pay for care and if bills remain unpaid, the nursing home may initiate a legal process to sue and potentially secure a judgment for payment. This legal judgment can lead to consequences such as liens, wage garnishment, or the seizure of assets, but these actions require formal legal proceedings.

The cost of nursing home care can be substantial. Without insurance, many families find themselves needing to liquidate significant assets, such as real estate and long-term investments, to cover these high costs.

Average Cost of Nursing Home Care in New York

The cost of nursing home care in New York varies significantly depending on the location and the type of facility. As of the latest data available, rates in New York City and Long Island reflect some of the highest in the state due to the high cost of living and operational costs in these areas.

New York City

In New York City, the cost of nursing home care can be exceptionally high. On average, residents may pay an average of $469 a day for a private room in a nursing home or up to $171,276 annually. The variation in cost typically depends on the borough, with Manhattan often being the most expensive. Factors influencing these costs include the level of care provided, the reputation and facilities of the nursing home, and additional services that may be offered.

Long Island

Similarly, on Long Island, the rates for nursing home care are also substantial, reflecting the overall high cost of living in the area. Average daily costs for a private room in a nursing home on Long Island are around $482 or $176,016 annually. These costs are influenced by the proximity to major urban centers like New York City, the quality of care, and the specific amenities provided by the facility.

Both New York City and Long Island exhibit high costs for nursing home care, with rates significantly above the national average. These costs reflect the economic realities of operating in these regions and underscore the importance of thorough financial planning for long-term care.

Selling major assets to fund nursing home care is not necessarily detrimental. For individuals requiring lifelong care, significant assets like a family home may no longer be necessary, making their sale a practical solution to finance care needs. However, there are scenarios where preserving assets is crucial. If only one spouse requires nursing home care, or if there is a desire to leave an inheritance to family members, protecting assets from nursing home costs becomes important. Each situation warrants careful consideration and planning to align financial actions with personal circumstances and goals.

How Medicaid Pays for Nursing Home Care

When a person becomes a nursing home resident under Medicaid, their income and assets may influence their eligibility and the amount they contribute towards care, but the ownership of these assets does not transfer to the nursing home. Instead, residents often pay a portion of their income, like Social Security or pensions, towards their care ac

Understanding what assets you can keep when applying for Medicaid in New York is crucial for successful financial planning. The state’s specific rules and regulations can often be complex and overwhelming, leaving many residents uncertain about their financial future. The need to balance asset protection with Medicaid eligibility is a common concern, and it’s essential to have clear, accurate information about asset and income limits to make informed decisions.

While there are several assets considered exempt or non-countable, the rules surrounding these exemptions can be intricate. Without the right guidance, you risk making costly mistakes that could jeopardize your assets and your Medicaid eligibility.

At Schlessel Law PLLC, our experienced Nassau County Medicaid planning lawyers are well-versed in Medicaid policies. Our team can provide you with comprehensive and current advice to ensure you’re taking the necessary steps to protect your assets when applying for Medicaid.

Contact Schlessel Law, PLLC today at (516) 574-9630 for a consultation, and let us assist you with your Medicaid planning needs.

Understanding Medicaid Eligibility

Medicaid is a joint federal and state program designed to provide health coverage to people with limited income, including some low-income adults, children, pregnant women, elderly adults, and people with disabilities. The eligibility rules for Medicaid in New York are complex and depend on a variety of factors, including income, assets, age, and disability status.

Income and Asset Limits for Medicaid

In 2025, the income threshold for Medicaid beneficiaries was raised. Effective January 1, 2025, the DAB population’s income limit has seen an increase from $1,732 to $1,800 for a single person, and a jump from $2,351 to $2,433 for a couple.

For New York residents, the annual income limits for Medicaid are $32,396 for an individual and $43,781 for a couple. Almost all sources of income, with very limited exceptions like Holocaust reparation payments, are considered in Medicaid’s income limit. This includes earnings from employment, alimony, pensions, Social Security Disability Income, Social Security Income, gifts, annuity payments, and distributions from IRA-type accounts.

The Importance of Medicaid Planning

Medicaid planning is a critical part of preparing for potential long-term care needs. With the high costs associated with nursing homes and home care services, adequate planning is essential to avoid quickly exhausting one’s life savings. Through strategic asset positioning, a well-executed Medicaid plan can help individuals qualify for Medicaid benefits while still preserving a substantial portion of their wealth.

Moreover, proper Medicaid planning can prevent penalties or coverage denial due to improper asset transfers. Given Medicaid’s five-year look-back period, understanding how and when assets can be transferred is key. Additionally, planning plays a crucial role in maximizing resources for a spouse or dependents. Through various strategies, it’s possible to secure a comfortable living for the family while ensuring the individual in need receives proper care.

Common Misconceptions About Medicaid Eligibility

Medicaid, despite being a crucial resource for millions of Americans, is often misunderstood. These misconceptions can lead to missed opportunities for assistance, unnecessary spending of personal assets, and even accidental fraud. Here are a few common misconceptions:

You must be impoverished to qualify for Medicaid. In reality, while Medicaid is a means-tested program, there are many strategies for protecting assets and income while still qualifying for benefits.

You can give away assets to qualify for Medicaid. In fact, Medicaid has a five-year look-back period, and inappropriate asset transfers can lead to penalties.

All of your assets must be spent on care before Medicaid will cover the cost. The truth is, certain assets are exempt and strategies exist to help preserve some assets for family members.

Addressing these misconceptions is critical for potential Medicaid recipients. Understanding the nuances of Medicaid eligibility can help individuals and families make informed decisions about their health care and financial future.

What Assets Can You Keep When You Go on Medicaid?

In New York, Medicaid recipients can keep certain assets, including one home (if equity is under $1,097,000 in 2025), one vehicle, personal belongings, and up to $32,396 in savings (for a single person in 2025). Retirement accounts in payout status and irrevocable burial funds are also exempt from Medicaid eligibility calculations.

Exempt vs. Countable Assets

In New York State, Medicaid considers certain assets as ‘exempt’ or ‘non-countable’ towards the overall asset limit for eligibility. Understanding the difference between exempt and countable assets is crucial as it directly impacts Medicaid eligibility and the planning process.

Exempt Assets in New York State

Exempt assets, as the name suggests, are those that Medicaid does not take into account when evaluating an individual’s eligibility for benefits. These assets can include:

Primary Residence

The primary residence is generally exempt from being considered as a countable asset for Medicaid purposes if the applicant, their spouse, or a dependent relative resides in the home. There is, however, a limit on the equity value of the home that can be exempted. As of 2025, this limit stands at $1,097,000. Therefore, if the equity in the home surpasses this figure, the excess may be classified as a countable asset.

Personal Belongings and Household Goods

Typically, personal belongings such as clothing, furniture, appliances, and other household goods are exempt from being considered countable assets. Unless these items hold an unusually high value, like highly sought-after art pieces or valuable antique collections, they are not factored into the Medicaid eligibility process.

Life Insurance Policies

Life insurance policies can be exempt, but this is dependent on their face value and whether they have a cash value. As per New York regulations, if the face value of all life insurance policies owned by an applicant totals $1,500 or less, they are classified as exempt assets.

Prepaid Burial Plans

Prepaid burial plans and a sum of $1,500 earmarked for burial expenses are considered exempt assets. It should be noted that for the prepaid burial plan to be exempt, it must be designated as irrevocable.

One Vehicle

A single vehicle, irrespective of its value, is exempt if it’s used for the transportation of the applicant or a member of their household. This exemption can be particularly significant in rural regions where public transportation options may be limited or non-existent.

Countable Assets in New York State

Countable assets, on the other hand, are those that Medicaid includes when determining an individual’s eligibility. These assets encompass:

Cash and Bank Accounts

All cash on hand and money in checking or savings accounts are deemed countable assets. These are the most liquid of assets, and their value is easily ascertainable and therefore counted by Medicaid.

Investments and Stocks

Investments, including stocks, bonds, and mutual funds, are generally classified as countable assets. The value of these investments is considered in the eligibility determination for Medicaid and can have a significant impact on whether an individual qualifies for benefits.

Real Estate Properties Other Than the Primary Residence

Real estate holdings other than the primary residence, such as second homes, rental properties, and other real estate investments, are deemed countable assets. The value of this additional property is factored into the eligibility determination for Medicaid.

Can Medicaid Place a Lien on Your Home or Assets in New York?

Medicaid can place a lien on your home or assets in New York under certain conditions. If a Medicaid recipient is considered “permanently absent” from their home, such as being in a long-term care facility, the state may treat the home as an available asset and file a lien to recover Medicaid expenses. This generally applies when the recipient is not expected to return home.

However, this lien is not permanent. If the recipient returns home, the lien must be removed. The lien only exists while the person is considered permanently absent, and it does not apply if the home remains their primary residence.

New York also limits the state’s ability to recover Medicaid costs from a recipient’s estate. If certain family members are still living in the home, the state cannot impose a lien. These protected individuals include a child under the age of 21, a child who is blind or disabled, or a sibling who has an ownership interest in the property and has lived there for at least one year before the recipient entered the nursing home.

Careful consideration of how Medicaid rules apply to your home and assets is important when planning for long-term care. Exemptions exist, but timing and household composition significantly influence the likelihood of a lien being placed. Without proper planning, a family home could be subject to recovery after the recipient’s death if no protections apply.

Strategies for Protecting Assets

When planning for Medicaid, it’s crucial to understand and explore different strategies to protect assets while ensuring Medicaid eligibility. Here are some common ways individuals can safeguard their assets:

Medicaid Compliant Annuities

A Medicaid-compliant annuity can be a valuable tool in Medicaid planning. These annuities are specialized financial products that convert countable assets into a stream of income, assisting individuals to meet Medicaid’s asset limit. The annuity must be irrevocable, non-transferable, provide equal payments (with no deferral or balloon payments), and be actuarially sound (i.e., the term of the annuity must not exceed the Medicaid a

Preparing for the future often involves making important legal and financial decisions, especially when it comes to how your assets will be handled. One of the key choices many New Yorkers face is whether to rely on a trust, a will, or a combination of both. These tools offer different paths, and the best option depends on your specific goals and circumstances. Comparing their structure, benefits, and how they function in New York can help clarify what may work best for your situation. Knowing the pros and cons of each can make a big difference in how efficiently your affairs are managed later on.

If you’re thinking about your long-term plans or are unsure which estate planning approach fits your situation, getting professional guidance can provide clarity. An experienced Long Island estate planning lawyer can help you weigh the benefits of wills and trusts, address concerns about probate, and structure a plan that meets your goals. If you’re just beginning the planning process or revisiting an older plan, having the right legal support can make a significant difference. Contact Schlessel Law PLLC today at (516) 574-9630 to discuss your options and create a plan tailored to your needs.

Trusts vs. Estates: Legal and Practical Differences

Trusts and estates are two distinct legal mechanisms for transferring assets to your heirs in New York. An estate refers to the assets a person leaves behind at death (distributed via a will through probate), whereas a trust is a legal arrangement where a trustee holds and manages assets for beneficiaries, potentially during the person’s lifetime and after death.

This leads to key differences in how and when assets transfer. For example, a will transfers your property only after death as a one-time event, while a trust can own and transfer assets both during your life and after death, providing continuity of management. In practice, this means:

Probate vs. No Probate: Assets passing by a will become part of a probate estate and require court proceedings, whereas assets in a properly funded trust bypass probate entirely. This distinction has major implications for time, cost, and privacy.

Timing of Effect: A will has no legal effect until you die, but a living trust takes effect during your lifetime (allowing management of assets if you become incapacitated) and continues after death. In New York, an estate is settled only post-death, but a trust can operate immediately and even manage assets before death.

Control and Flexibility: With a trust, you can set detailed rules (for example, staggered distributions or conditions for beneficiaries) and even make changes if it’s revocable. A will is generally simpler, but offers less ongoing control – it just specifies who gets what at death. Also, only a will can name guardians for minor children, whereas a trust cannot appoint a guardian (a will is needed for that specific purpose).

Both trusts and wills are recognized under New York law, but they serve different purposes in an estate plan. Many people use both in combination, as we’ll discuss, to capture the advantages of each.

Types of Trusts and Estates Recognized Under NY Law

New York law allows for a range of trusts and estate proceedings, each designed to suit different planning goals and situations. Knowing these categories helps clarify how assets may be managed or distributed, whether through a trust-based plan or a traditional estate proceeding.

Common Types of Trusts in New York

Revocable Living Trust

This trust is created during the grantor’s lifetime and can be amended or revoked at any time. It is a popular tool for avoiding probate, maintaining privacy, and managing assets efficiently. The grantor usually serves as the initial trustee and retains full control until death or incapacity. Upon death, assets in the trust transfer directly to beneficiaries without court oversight.

Irrevocable Trust

Unlike a revocable trust, an irrevocable trust generally cannot be changed once established. In New York, these trusts are used for purposes such as Medicaid planning, asset protection, and reducing estate taxes. For example, an Irrevocable Medicaid Asset Protection Trust can shelter assets if created at least five years before applying for nursing home Medicaid. These trusts can also remove life insurance proceeds or other holdings from the taxable estate, but involve a loss of control over the transferred assets.

Testamentary Trust

This trust is created within a will and becomes effective only upon the testator’s death. Because it is tied to the will, it must pass through probate before the trust becomes active. Testamentary trusts are often used to manage inheritances for minors or to stagger distributions to adult beneficiaries. They do not avoid probate but provide post-death management of assets.

Specialized Trusts

New York also recognizes many trusts tailored to unique objectives:

Special Needs Trusts: Preserve eligibility for public benefits while providing supplemental support for disabled beneficiaries.

Charitable Trusts: Allow donors to support charitable causes while gaining tax benefits.

Irrevocable Life Insurance Trusts (ILITs): Remove life insurance proceeds from the taxable estate and control policy distribution.

These specialized trusts may fall under revocable or irrevocable categories but show the flexibility of trust structures under NY law.

Types of Estates in New York

Testate Estate (Will-Based)

If someone dies with a valid will, the estate is considered “testate.” The Surrogate’s Court oversees the probate process, appointing the executor named in the will. The executor is responsible for locating and valuing assets, paying debts and taxes, and distributing property according to the will’s instructions.

Intestate Estate (No Will)

If a person dies without a valid will, their estate is “intestate.” In this case, New York’s intestacy laws determine who inherits the estate. The Surrogate’s Court appoints an administrator, typically a close relative, to perform similar duties as an executor. The key difference is that the law, not the decedent’s wishes, dictates asset distribution.

Small Estate (Voluntary Administration)

New York offers a streamlined process for estates valued at $50,000 or less in personal property (not including real estate). Called voluntary administration, this proceeding is faster and involves less paperwork than full probate. It is available whether or not the decedent had a will, as long as the estate qualifies. However, the $50,000 limit excludes many estates, particularly in New York City, where property values are high.

By recognizing the types of trusts and estates available under New York law, individuals and families can choose the approach that best meets their needs, whether that means avoiding court involvement with a revocable trust or relying on a will and traditional estate administration.

Type of Estate

Description

Testate Estate (Will-Based)

Estate where the decedent left a valid will. The executor manages assets and distributes property according to the will under Surrogate’s Court supervision.

Intestate Estate (No Will)

Estate where there is no valid will. The court appoints an administrator, and assets are distributed according to New York intestacy laws.

Small Estate (Voluntary Administration)

Streamlined process for estates with $50,000 or less in personal property. Available with or without a will; excludes real estate.

Probate vs. Trust Administration in New York

When a person passes away in New York, the process of settling their affairs typically follows one of two legal paths: probate administration or trust administration. Each serves a similar goal: transferring the decedent’s assets to heirs or beneficiaries, but the procedures, timelines, and levels of court involvement differ significantly.

New York Probate Process (Estate Administration)

Probate is the formal court process for validating a will and distributing a decedent’s assets under court supervision. It begins in the Surrogate’s Court of the county where the person lived at the time of death. The steps generally include submitting the will for probate, officially appointing the executor via Letters Testamentary, notifying interested parties, compiling an inventory of the estate’s assets, paying any outstanding debts and taxes, and distributing what remains according to the terms of the will.

This process can be lengthy, often taking several months to over a year depending on the estate’s size and whether disputes arise. Court delays, document requirements, and formal notices all contribute to the timeline. Probate also involves court and legal fees, and it is a matter of public record. Anyone can access the will and filings once they’re submitted. Despite these drawbacks, probate provides valuable oversight and is often necessary for assets titled solely in the deceased’s name, especially real estate or significant financial accounts.

Trust Administration (Settling a Trust Without Court)

In contrast, trust administration operates outside the court system. When someone who created a trust (called the grantor) dies or becomes incapacitated, the successor trustee named in the trust document steps in to carry out the terms. There’s no need for court approval or formal appointment. The trustee begins managing the trust immediately, notifying beneficiaries, paying any outstanding debts if required, and distributing assets, all without public disclosure or court supervision.

This streamlined approach is typically faster and more private than probate. Trust administration can often be completed within weeks or a few months, depending on the trust’s complexity and the cooperation of those involved. The trust’s terms guide the trustee’s actions, and while the process is more flexible, it does come with legal responsibilities. Trustees in New York must comply with fiduciary duties outlined in state law, including kee

After becoming incapacitated, older adults often require assistance in covering the high expenses of continued care. The mounting bills can be daunting, and being approved for Medicaid can bring significant relief. However, it’s essential to be mindful of a possible trap ahead of time. Although Medicaid covers medical expenses, states have the option to recoup their payments by selling off your assets after death.

If you haven’t planned effectively for your long-term care, you can get caught by Medicaid’s estate recovery program. It is critical to seek the help of a skilled Medicaid planning lawyer to address this possible issue. At Schlessel Law PLLC, our experienced Long Island Medicaid planning attorneys can assist in developing a Medicaid planning strategy that aligns with specific long-term care goals and financial situations. Whether it’s meeting recent Medicaid income limits or setting up a Medicaid asset protection trust, we can help you prepare for the future effectively. Contact us today at (516) 574-9630 to schedule a consultation.

Here’s what you need to know.

Defining the Estate

Your estate includes any assets that you own at the time of your death. That can include real estate, bank accounts, investment accounts, and retirement accounts. Medicaid cannot touch these assets until you die. There is also a spousal impoverishment provision that protects up to $130,380 (as of 2022) of your assets to care for your spouse if necessary.

Medicaid can also file a lien on your house at the point that you are institutionalized and are unlikely to return home, but cannot seize or repossess the house if your spouse, a child under 21, a blind child of any age, a disabled child of any age, an adult child of any age who lived in the home for at least two years before you are institutionalized who provided care and has lawfully resided in the home continuously since that time, or a sibling with an equity interest in the home lives there and has for more than one year prior to your entry into the nursing home. The lien can be removed if you sell the house and use the proceeds or part of the proceeds to reimburse Medicaid.

Certain estate planning measures can protect some portions of your estate from the Medicaid clawback, but you’d need to engage in your estate planning early, ideally long before you might ever apply to Medicaid for help with your long-term care needs since there is a 5-year look-back period. Certain long-term care plans may be able to spare you the need to use Medicaid entirely.

New York Medicaid Estate Recovery Exemptions And Limitations

Description

Age Limitation

Medicaid recovery for those 55+ receiving Medicaid or institutionalized. No recovery for those under 55.

Exempted Assets After Probate

Certain assets exempted after probate, including trust-intended assets, life insurance, jointly-owned accounts, retirement payouts, IRAs, joint real estate, and more.

Family Situation Impact

Recovery depends on family situation: surviving spouse, child under 21, or child with a permanent disability may prevent recovery.

Expanding Definitions of Medicaid Beneficiary’s Estate

Changes allow broader estate definitions, possibly including the home, even if the beneficiary is married.

Is Medicaid a Needs-based Program?

Yes. Many who need Medicaid to pay for their nursing home care do not have many assets to begin with. However, during the application process, your primary residence doesn’t count as one of your assets if a spouse or the individuals listed above are living at the property. The home could be worth a considerable sum, but if all of the other income and assets line up with Medicaid’s guidelines, you can still get Medicaid.

Nevertheless, the law is well aware the asset exists and thus will try to recoup whatever they can against this asset, especially here in New York where the median house price, statewide, is $400,158. Here on Long Island, the price tag is even higher, at $623,000.

Estate planning attorney on Long Island

Does Estate Recovery Only Apply to Certain Medicaid Benefits?

Medicaid can only use estate recovery when:

You were age 55 or older when receiving Medicaid benefits; or

You are an individual at any age who has been permanently institutionalized.

It is seen as a loan that is used for your long-term services and support.

You are not subject to estate recovery if you qualify for Medicare under the following programs:

Qualified Medicare Beneficiary (QMB)

Specified Low-Income Beneficiary (SLMB)

Qualifying Individual (QI)

Qualified Working Disabled Individual (QDWI)

It can be very beneficial to have an attorney looking out for your interests or your loved one’s interests if you are applying for Medicaid because there are steps that we can take with your application that might allow you to qualify for one of these programs even if you aren’t sure whether you can or not.

Medicaid Estate Recovery New York

Medicaid imposes strict eligibility criteria, evaluating both your existing assets and certain past financial decisions. It includes a provision that allows the state of New York to recover expenses by claiming assets from your estate after your passing.

If you’re 55 years old or older, or if you’ve been a permanent resident in a medical institution and received Medicaid benefits, there’s a chance that your assets could be subject to estate recovery after your passing. But if you’re 54 years old or younger and received Medicaid coverage for purposes other than a nursing home stay, estate recovery does not apply to you. However, irrespective of your age, if Medicaid covers the costs of a nursing home stay, the potential for recovering funds from your estate remains a consideration.

The state has the authority to seek reimbursement for any healthcare program costs, which may include:

Community services

Hospital in-patient treatment

In-home care

Nursing home stays

Prescription drug costs

Given that the family home is often the primary asset owned by a Medicaid recipient that could substantially cover medical expenses, the estate recovery process may involve the appropriation and sale of your residence. To shield your acquired assets from such a devastating loss for your family, it is recommended to create an estate plan that safeguards your lifetime achievements.

Navigating Medicaid estate recovery in New York can be complex, but a skilled Long Island Medicaid planning attorney can be your trusted guide through the process. At Schlessel Law PLLC, our attorneys understand the intricacies of estate recovery and can work tirelessly to protect your assets. We can help you develop a comprehensive plan to safeguard your estate while still qualifying for Medicaid benefits. Contact us today to start your journey toward comprehensive Medicaid estate planning.

NY Medicaid Estate Recovery Law Repealed

In a significant shift from earlier regulations, the New York 2012-2013 budget bill repealed the previous law that permitted Medicaid to claim non-probate assets for estate recovery. This change marks a notable rollback from the expanded definition of “estate” introduced by the 2011 state legislation, administrative directives, and emergency regulations. Under the former rules, Medicaid could recover costs from a broader range of assets, including those not going through probate. This generally included assets held jointly or those designated to specific beneficiaries.

With the repeal, the scope of Medicaid’s recovery efforts is now limited strictly to probate assets. These are assets solely in the name of the deceased, without any beneficiaries designated. This means that only those assets that go directly through the probate process can be accessed for recovering expenses incurred by the state in providing care through Medicaid.

This change provides clearer boundaries for what can be claimed by Medicaid after a beneficiary’s death, simplifying the legal matters for the families involved. It removes the concern that any asset passed on directly to loved ones, without going through probate, could still be vulnerable to Medicaid’s recovery efforts. Working with a Medicaid planning attorney can clarify the latest legal changes and how they affect Medicaid planning strategies, assisting in acquiring long-term care and protecting assets from potential Medicaid recovery claims. Contact Schlessel Law PLLC today to speak with a skilled Long Island Medicaid planning attorney.

What Is Medicaid Clawback?

Medicaid clawback refers to the state’s effort to recover costs paid on behalf of a Medicaid recipient by claiming assets from their estate after death. This process often includes home equity or other assets unless legal protections like trusts or exemptions were applied before death.

When an individual receiving Medicaid Long Term Care services passes away, the MERP becomes active. The term ‘clawback’ describes the retrieval of Medicaid funds from the estate of the deceased. This includes expenses for nursing home care, home and community-based services, and expenses related to prescription drugs or hospital stays.

It’s also important to note that certain protections prevent MERP from recovering assets, such as the presence of a surviving spouse, a child under 21, a blind or disabled child, or when specific sibling or caregiver-child exemptions apply. These exceptions highlight the program’s consideration for family situations.

For individuals planning long-term care, understanding the Medicaid clawback and its implications is essential. This understanding underscores the importance of implementing Medicaid planning strategies to protect assets and ensure that the beneficiary’s estate is handled according to their wishes after death.

To avoid the impact of a Medicaid clawback, it’s recommended to consult a Long Island Medicaid planning attorney. Schlessel Law PLLC offers guidance on asset planning within Medicaid rules to prevent unfavorable outcomes and en

Understanding the role and application of affidavits of heirship in the New York estate probate and administration process is essential for anyone tasked with overseeing the fair distribution of a decedent’s assets. These documents are foundational in confirming rightful heirs, especially in cases where the lineage or inheritance path isn’t clear.

At Schlessel Law PLLC, our New York estate planning attorneys are proficient in the nuances of estate planning and administration. We offer detailed support in drafting, validating, and filing affidavits of heirship. By partnering with us, you gain access to a team committed to meticulous research and diligent pursuit of all necessary information to assert heirship confidently and legally.

If you find yourself needing to utilize an affidavit of heirship or if you seek reliable legal guidance to handle the estate administration effectively, reach out to Schlessel Law PLLC today at (516) 574-9630. We are prepared to assist you in fulfilling your responsibilities while respecting the legacy of your loved ones. Contact us today for experienced assistance so that every aspect of your estate management is handled with professionalism and care.

What is an Affidavit of Heirship in New York?

An Affidavit of Heirship is a crucial document in the context of estate management in New York, particularly when a formal probate process may not be necessary or feasible. It is used primarily to establish the rightful heirs to the estate of a deceased person who did not leave a will (intestate).

Under the New York Codes, Rules, and Regulations (NYCRR) 207.16, the affidavit of heirship becomes a crucial document in situations where the decedent has either no surviving distributees, only one distributee, or where the surviving distributees are more distantly related to the decedent, such as grandparents, aunts, uncles, or first cousins. In the absence of a spouse, children, or parents, these relatives represent the next tier of potential heirs under New York’s succession laws.

An affidavit of heirship must clearly state each distributee’s relationship to the decedent and must declare that the decedent is not survived by no other persons with a similar or closer relationship.

When is an Affidavit of Heirship Typically Used?

An affidavit of heirship is typically used when a person dies without a will and the estate needs to transfer property, especially real estate, to heirs. It avoids formal probate and is often used in simple estates to prove heirship for title transfers or banking purposes.

The affidavit provides a formal declaration identifying all potential heirs of the decedent. This is especially important when the heirs are not immediate family members. The affidavit details each heir’s relationship to the deceased, thereby clarifying their legal standing and rights to the estate.

Second, the affidavit serves to streamline the probate or administration process by presenting all necessary information to the court in a structured manner. This helps the court assess the legitimacy of the claims and the appropriate distribution of the estate according to New York’s laws of succession.

This affidavit is commonly utilized to expedite the transfer of property to heirs without the need for a lengthy probate process. The main purpose of this document is to provide a clear record of the deceased’s family history and lineage to confirm the rightful successors of their assets. By doing so, it assists in the seamless and undisputed transfer of assets, minimizing potential conflicts among potential heirs.

An affidavit of heirship can be used in both probate and administration proceedings, meaning, it can be used both in the presence and the absence of a will.

When is Presenting an Affidavit of Heirship Necessary?

In New York, the affidavit of heirship plays a crucial role in the process of probate or estate administration under specific circumstances outlined by state laws. This document is particularly important when the typical direct lines of inheritance (spouse, children, parents) are not applicable, and the identification and verification of heirs become more complex.

Circumstances Requiring an Affidavit of Heirship

The use of an affidavit of heirship is mandated under the following situations:

No Known Distributee: When there is no readily identifiable heir to whom the estate assets can be distributed, an affidavit of heirship is necessary to establish any potential heirs. This situation often arises when the deceased has lived a very private life or has been estranged from potential heirs. The affidavit helps in tracing and confirming any legal heirs under the state’s intestacy laws.

Single Distributee: If there is only one known distributee, the affidavit of heirship provides formal documentation that confirms this person as the sole heir. This is important not only for the distribution of assets but also for clearing any potential claims or challenges to the estate.

Distributees Are Distant Relatives: In cases where the only known distributees are the decedent’s grandparents, aunts, uncles, or first cousins, the relationships can be more complex to establish without clear lineage documentation. These relatives are often considered when there are no closer relatives alive, and the affidavit serves to clearly lay out the family tree and respective rights to the estate.

Situation

Description

No Known Distributee

When there is no readily identifiable heir to whom the estate assets can be distributed. The affidavit helps in tracing and confirming any legal heirs under the state’s intestacy laws. This situation often arises when the deceased has lived a very private life or has been estranged from potential heirs.

Single Distributee

If there is only one known distributee, the affidavit of heirship provides formal documentation that confirms this person as the sole heir. This is important not only for the distribution of assets but also for clearing any potential claims or challenges to the estate.

Distributees Are Distant Relatives

In cases where the only known distributees are the decedent’s grandparents, aunts, uncles, or first cousins, the relationships can be more complex to establish without clear lineage documentation. The affidavit serves to clearly lay out the family tree and respective rights to the estate.

Process of Filing an Affidavit of Heirship

The filing of an affidavit of heirship in New York involves a comprehensive and diligent approach to establishing the decedent’s family history and identifying potential heirs. This procedure is critical to ensure the equitable distribution of the estate in accordance with state law, particularly when direct heirs are not apparent. Here’s how the process typically unfolds:

1. Researching Family History

To begin, a thorough investigation into the decedent’s family structure is necessary. This includes gathering details on births, marriages, and deaths within the family, as well as other pertinent familial links that might influence the distribution of the estate.

2. Conducting Diligent Searches

The Surrogate’s Court requires that the affiant, who is preparing the affidavit, has conducted extensive searches to ensure all potential heirs are accounted for. This includes:

Examining the decedent’s personal effects which can provide clues to potential heirs.

Inquiring about the decedent with relatives, friends, neighbors, former business associates, and employers to gather more information on possible heirs.

Contacting institutions that the decedent used, such as banks or the postal office which may reveal forwarding addresses or other contacts.

Corresponding to the last known addresses of any missing heirs to attempt direct contact.

Searching over the internet or making phone calls to locate persons with the same or similar names in areas where the missing heir last resided.

Examining public records to find the last-known addresses of potential heirs.

3. Preparing the Affidavit

A disinterested third party, who is familiar with the decedent but has no financial interest in the estate, must prepare the affidavit. This individual must attest to the accuracy of the collected family history and the results of their diligent searches, based on both their personal knowledge and the documented evidence they have gathered.

4. Filing with the Court

Once the affidavit is fully prepared, documenting all efforts made and information gathered, it must be filed with the Surrogate’s Court handling the estate’s proceedings. The filing of this document is crucial as it becomes a part of the official record and helps to guide the administration of the estate.

This process is designed to protect the interests of all potential heirs and ensure that the estate is administered fairly and transparently. By requiring that these extensive searches and documentation be completed, the Surrogate’s Court aims to prevent any oversight of rightful heirs and mitigate the risk of future disputes or legal challenges. The affidavit of heirship thus serves as a foundational document in the administration of estates, especially those lacking a clear line of direct heirs.

Who Is Qualified to Sign the Affidavit of Heirship?

According to section 207.16 of the Uniform Rules of the Surrogate’s Court, an affidavit of heirship must be signed by disinterested witnesses. These witnesses must not benefit from the estate and must have personal knowledge of the decedent’s family history and heirs. Typically, two such witnesses are required to validate the affidavit in probate or real estate matters.

Family members who could potentially benefit from omitting another possible heir are not deemed appropriate for this role. Occasionally, if no other suitable candidates are available, a spouse of a distributee may qualify as disinterested, but this can vary from one county to another. Therefore, it’s advisable to consult with the clerk of the coun

The decision to incorporate a Medicaid Asset Protection Trust (MAPT) into your estate plan is nuanced, involving a range of considerations that go well beyond its apparent benefits. Understanding the potential disadvantages of MAPTs is just as important as recognizing their advantages. A MAPT can serve as a strategic tool for protecting your assets from the high costs of long-term care, but it comes with limitations. From the irrevocable nature of these trusts to the restrictions imposed by the five-year look-back period, careful evaluation is essential for those on Long Island seeking to make informed decisions in this area.

At Schlessel Law PLLC, we recognize the delicate balance required in Medicaid planning. Our team possesses a deep knowledge of New York’s Medicaid laws and the foresight to anticipate how each decision might affect your future eligibility and your family’s financial security. We are committed to guiding Long Island residents through the MAPT process, providing clarity and strategic planning to align with your long-term care objectives while honoring the legacy you wish to leave for your beneficiaries. We can also elaborate on how other decisions can impact your Medicaid planning, such as how the spousal refusal process works in New York.

With the assistance of our skilled Long Island Medicaid planning attorney, we can work toward a plan that addresses the full scope of possibilities, both advantageous and challenging, ensuring your estate planning is robust, compliant, and reflective of your wishes. Protect your assets from look-back periods and cement your legacy for your beneficiaries with the guidance of our knowledgeable team. To schedule a consultation, call us today at (516) 574-9630.

What is a Medicaid Trust?

A Medicaid Trust is an irrevocable trust that protects assets from being counted toward Medicaid eligibility. Assets placed in the trust are no longer owned by the individual, helping them qualify for long-term care coverage while preserving wealth for beneficiaries. The trust must be set up at least five years before applying for Medicaid.

In New York, Medicaid provides assistance with the costs of long-term care for those who meet certain income and asset limits. The ownership of assets is transferred to the trust, which is then managed by a trustee. The creation of such a trust must be done carefully to comply with both federal and New York Medicaid laws.

The Primary Purpose of Medicaid Trusts

The primary purpose of a Medicaid Trust in New York is to help an individual qualify for Medicaid long-term care benefits without having to “spend down” or exhaust their assets. By transferring assets into a Medicaid Trust, those assets are not considered countable by Medicaid, assuming the transfer occurs outside the look-back period. This strategic move can preserve wealth for future generations, while also ensuring that the individual has access to necessary long-term care services that they might not otherwise be able to afford.

Medicaid Trust Pros and Cons

Medicaid Trusts can offer several advantages. One key benefit is that you can still use the assets within the trust, allowing you to maintain a level of financial comfort. These trusts help protect assets from Medicaid and other long-term care creditors, providing peace of mind about future expenses. You also have the flexibility to choose your beneficiaries, ensuring that your assets go to the people you care about. Additionally, Medicaid Trusts protect your assets from the creditors of your beneficiaries, adding an extra layer of security. There are also potential capital gains tax benefits, as heirs can avoid or significantly reduce the capital gains tax that they may owe.

However, there are notable drawbacks. The Medicaid look-back period can result in penalties if assets are transferred too close to the time of applying for Medicaid. Income generated by the trust may still be considered countable, affecting eligibility. Also, irrevocable trusts require careful consideration, as they are difficult to modify. Setting up a Medicaid trust can be legally, financially, and administratively intricate, which can be daunting to manage. There are also limitations on what assets can be included in the trust, and Medicaid’s long-term care coverage might not meet all your needs.

Due to the various pros and cons of a Medicaid Trust, it is recommended to consult with a Long Island Medicaid planning attorney for thorough planning and further ensuring that the trust aligns with your financial and health care goals. Contact Schlessel Law, PLLC today to schedule a consultation.

What Are the Legal Challenges Associated With Medicaid Trusts?

The legal challenges associated with Medicaid trusts in New York include the five-year lookback period, potential penalties for improper asset transfers, and strict rules on trustee control and beneficiary access. Improper drafting can disqualify applicants from Medicaid, and trusts must comply with federal and state Medicaid eligibility laws to be effective.

Understanding the Potential Drawbacks of Medicaid Asset Protection Trusts (MAPTs)

Medicaid Asset Protection Trusts (MAPTs) can be a valuable tool in estate planning, offering a means to protect assets while qualifying for Medicaid’s long-term care benefits. However, these trusts are not without their limitations and potential pitfalls. New Yorkers need to consider the drawbacks and assess whether a MAPT aligns with their financial goals and personal interests.

Understanding the Look-Back Period and Penalties

The look-back period is a critical aspect of Medicaid planning in New York and can have significant financial implications if not properly addressed. This period is currently five years in New York. If assets are transferred into a MAPT less than five years before applying for Medicaid, the applicant may be subject to a penalty period of ineligibility for Medicaid benefits.

This penalty period can be costly and can delay the start of Medicaid benefits. The length of the penalty period is calculated based on the total value of the assets transferred and the average cost of nursing home care in New York. If an individual requires long-term care services during the penalty period, they may need to find alternative ways to pay for care, which can be financially draining.

Moreover, if not carefully planned, the timing of asset transfers to the Medicaid Trust could inadvertently create a period during which the individual is ineligible for Medicaid, yet the funds in the trust are not accessible to pay for care. This situation underscores the necessity of careful, forward-looking planning when considering the establishment of a Medicaid Trust in New York.

Countable Income Generated by a MAPT

While the principal of a MAPT may be protected from Medicaid’s resource limits, the income generated by the trust’s assets may still be counted towards the income eligibility thresholds. In New York, if the income produced by the MAPT exceeds these limits, it could affect the grantor’s Medicaid eligibility, requiring careful structuring of the trust to minimize such risks.

Long-Term Considerations of Irrevocable Trusts

Some clients struggle with the concept of an irrevocable trust, which requires them to give up control over their assets. Once assets are placed into a MAPT, the grantor cannot modify the principal or reclaim ownership of those assets. This loss of control can be unsettling for individuals who wish to retain the flexibility to make changes to their estate in response to life’s uncertainties.

Legal, Financial, and Administrative Complexities

Creating and maintaining a MAPT often involves legal expenses, potential trust management fees, and administrative complexities. Some may prefer to avoid these costs and complexities, seeking simpler estate planning solutions that do not entail the ongoing involvement of legal and financial professionals.

Limitations on What Assets Can Be Included

While MAPTs are suitable for holding certain types of assets, such as real estate and liquid assets, they are not typically recommended for retirement accounts like IRAs and 401(k)s. Transferring these retirement assets into a MAPT can trigger negative tax consequences and may not be advantageous for the grantor or the beneficiaries.

Limitations on Medicaid’s Long-Term Care Coverage

Medicaid does not cover every type of long-term care setting. In New York, Medicaid may not pay for care in certain assisted living facilities that many people prefer over nursing homes. If an individual’s long-term care plan includes residing in an upscale assisted living facility, a MAPT may not provide the financial support needed for such a preference, as Medicaid’s coverage is limited to approved types of care facilities and services.

MAPTs can be an effective part of a well-considered Medicaid planning strategy. However, they are not a one-size-fits-all solution. Long Island residents should weigh these potential pitfalls against the benefits of a MAPT, considering their personal circumstances and long-term care goals. Consulting with an experienced Long Island Medicaid planning attorney familiar with the law can help in making an informed decision about the role of a MAPT in one’s estate plan.

Potential Drawbacks of Medicaid Asset Protection Trusts (MAPTs)

Implications for New Yorkers

Look-Back Period and Penalties

Transfers within five years of applying for Medicaid can result in penalties and a delay in benefits, necessitating alternative care funding.

Countable Income Generated by a MAPT

Income from the trust may affect Medicaid eligibility if it exceeds income thresholds, requiring strategic trust structuring.

Long-Term Considerations of Irrevocable Trusts

The irrevocable nature means loss of control over assets, which may not suit everyone’s estate planning flexibility needs.

Legal, Financial, and Administrative Complexities

The setup and m

The prospect of long-term care can cast a shadow over the golden years of retirement, especially in New York with its high cost of living. Navigating nursing home care can feel overwhelming for families, as an unexpected need for such care often imposes significant financial burdens. Many families also worry about what happens to your assets if you go into a nursing home, making proactive planning essential. This is where a New York asset protection lawyer can step in to provide valuable assistance.

Planning financially for nursing home care is essential to secure a stable future for yourself or your loved ones. Incorporating long-term care costs into your financial strategy with guidance from a Long Island asset protection lawyer can provide peace of mind and safeguard your family’s financial well-being.

At Schlessel Law PLLC, our team of New York asset protection attorneys may be able to provide valuable assistance in tackling preparations for availing nursing home care and the associated financial implications. Call us today at (516) 574-9630 to schedule a consultation.

Can A Nursing Home Take Your House if it is in A Trust in New York?

A nursing home cannot take your house if it is in an irrevocable trust in New York, provided the trust was established at least five years before applying for Medicaid. Assets in a revocable trust remain countable and are not protected. The type of trust and timing are critical for protection from Medicaid estate recovery.

Typically, homes placed in an irrevocable trust are shielded from nursing home claims. This is because, once transferred to an irrevocable trust, the home is no longer considered part of your personal estate, making it inaccessible to creditors, including nursing homes.

However, this protection is not guaranteed. For an irrevocable trust to effectively protect your home, it must be established well before any nursing home care needs arise. New York has a look-back period of five years for Medicaid eligibility. This means if you transfer your home into an irrevocable trust within five years before applying for Medicaid, the transfer may be examined and potentially disqualified, making your home vulnerable to claims.

On the other hand, a revocable trust does not offer the same level of protection. Because control over the assets remains with you in a revocable trust, these assets are still viewed as part of your estate and are therefore subject to claims by nursing homes for covering care costs.

For effective estate planning, it’s recommended to consult with an experienced Long Island asset protection lawyer who can help you understand the different types of trusts and the rules surrounding Medicaid planning. This allows you to make informed decisions that protect your home and other assets from potential nursing home claims.

The Cost of Nursing Home Care in New York

The financial realities of long-term care are a growing concern as the baby boomer generation enters retirement. This concern is particularly pronounced in New York, one of the costliest states for senior care in the United States. This article will delve into the average cost of nursing home care in the state, the factors that contribute to these costs, and the vital necessity of financial planning for nursing home care.

The Average Cost of Nursing Home Care

As of 2023, the average cost of nursing home care in New York can reach upwards of $150,000 per year. It is important to remember that these are state averages. Certain high-demand areas such as Manhattan or the Hamptons can exceed this average significantly, while more rural parts of the state may have lower costs.

These figures are substantially higher than the national average, which currently stands at around $105,000 per year for a private room. The median duration of stay in a nursing home is about two and a half years, but many residents live in these facilities for far longer. Therefore, the lifetime cost of nursing home care in New York can easily run into the hundreds of thousands of dollars.

Factors Contributing to Nursing Home Care Costs

There are several key factors contributing to the high costs of nursing home care in New York. First, the state has a high cost of living in general, which directly influences the cost of care. Expenses such as wages for skilled nursing staff, utilities, food, insurance, and property costs all contribute to the overall cost of providing care. Additionally, the demand for high-quality, professional care is strong in New York, further driving up prices.

Second, New York’s strict regulations and high standards for nursing home care can also add to the expense. These standards are designed to ensure patient safety and quality of care but require investment in staff training, facility upkeep, and compliance procedures, which all increase costs.

Lastly, the nature of care provided in nursing homes is a significant contributing factor. These facilities offer round-the-clock skilled nursing care, assistance with daily living activities, medication management, and often various therapy services such as physical, occupational, and speech therapy. This level of care is inherently expensive to provide.

The Necessity of Financial Planning for Nursing Home Care

Given the substantial cost of nursing home care in New York, financial planning is of paramount importance. In fact, planning for long-term care should be an essential component of any comprehensive retirement strategy.

Without adequate planning, the cost of nursing home care can quickly deplete an individual’s life savings. Long-term care insurance is one solution, but it may not be the right fit for most people due to high premiums and potential coverage limitations. Medicaid is another option, but qualifying for it requires individuals to meet strict income and asset limits, which can involve detailed planning and documentation.

A skilled New York elder law attorney can provide valuable guidance in navigating the financial aspects of long-term care. They can help individuals and families understand their options and develop a comprehensive plan that includes not only funding for potential nursing home care but also the exploration of alternative care options such as home care or assisted living.

Long Island asset protection lawyer

Understanding Trusts in New York

Trusts represent a vital tool in estate planning, offering a degree of control over how and when assets are distributed to beneficiaries. They also provide significant opportunities for tax planning, asset protection, and privacy. This section will explain the fundamentals of trusts, discuss different types of trusts in New York, and outline the reasons for putting a house into a trust.

Different Types of Trusts and Their Purposes in New York

In estate planning, trusts play a vital role in managing and distributing assets according to an individual’s wishes. In New York, a variety of trust options are available, each designed to serve specific purposes and provide unique benefits to grantors and beneficiaries alike.

Irrevocable Trusts

When it comes to safeguarding assets, especially for older adults, the use of irrevocable trusts is essential. The establishment of an irrevocable trust serves as a solid foundation for asset protection, ensuring that one’s assets are not unnecessarily depleted to cover expenses like nursing home care or long-term care. Securing assets in this type of trust can help individuals become eligible for Medicaid benefits, including nursing home care, home care, and, in certain cases, assisted living programs. Through proactive planning with an irrevocable trust, one can maintain Medicaid eligibility while preserving their family’s assets.

Special Needs Trusts

Special needs trusts, also known as supplemental needs trusts (SNTs), are instrumental in ensuring continuous care for individuals with special needs without disrupting their government entitlement benefits like Supplemental Security Income (SSI) and Medicaid. These trusts can be established either through a will or as a living trust, providing support for expenses not covered by government benefits. Items such as computer equipment, vacations, special medical equipment, and home modifications can be funded through trust assets. It is crucial to consult an experienced attorney with knowledge of special needs planning to navigate the various types of SNTs available (First Party, Third Party, Pooled Trusts).

Irrevocable Life Insurance Trusts

For individuals whose estates are expected to surpass federal or New York estate tax exemptions, the establishment of an irrevocable life insurance trust (ILIT) can result in significant estate tax savings. Having the trust own the life insurance policy on behalf of the individual can help minimize estate taxes. In this arrangement, the individual establishes the trust, selects the trustee, and designates beneficiaries, retaining control by providing instructions for the trustee to follow. The assets held within the ILIT bypass both the individual’s and their spouse’s estates, directly benefiting children or other specified beneficiaries. By utilizing this strategy, estate taxes in both estates can be avoided, ensuring the preservation of a substantial portion of the insurance proceeds.

Revocable Trusts

A revocable trust offers individuals the ability to transfer their assets into a trust while maintaining complete control over them. This type of trust can be easily amended, modified, or revoked by the individual during their lifetime. Upon death, the trust’s assets are passed on to the beneficiaries named within the trust. Revocable trusts are commonly used to avoid the probate process, which can lead to significant delays in the distribution of assets after an individual’s passing. Additionally, a revocable trust can be particularly beneficial in cases where there are potential disputes or contests regarding the will or inheritance. Howe

The probate process in New York is a critical step in managing and distributing a loved one’s estate, but it is not always a quick process. While some estates can be resolved within a year, others may remain open for several years due to legal, financial, or administrative factors. Prolonged probate timelines can create challenges for beneficiaries and executors alike, making it essential to handle the process with care and attention to detail.

For residents of Long Island, Schlessel Law, PLLC offers quality legal guidance to help executors and beneficiaries address the unique aspects of New York probate. From managing deadlines and resolving disputes to addressing tax obligations and distributing assets, our team assists in protecting the interests of everyone involved. With the right legal support, executors can avoid unnecessary delays, minimize costs, and fulfill their responsibilities in a timely and efficient manner.

If you are involved in the probate process or need assistance with estate administration, our Long Island estate planning attorney at Schlessel Law, PLLC is ready to help you move forward with confidence and clarity. Contact us today at (516) 574-9630 to discuss how we can help safeguard your best interests while avoiding potential issues during probate.

What Does It Mean to Keep an Estate Open?

In New York, an estate remains open until the executor or administrator completes all necessary tasks and obtains formal discharge from the Surrogate’s Court. This process includes collecting and valuing assets, settling debts and taxes, distributing assets to beneficiaries, and submitting a final accounting. The estate cannot be officially closed until all these responsibilities are fulfilled and the court grants approval.​

A key consideration is the statutory period for creditor claims. Creditors typically have seven months from the issuance of letters testamentary or administration to file claims against the estate. Executors are advised to wait until this period lapses before distributing assets to avoid personal liability for unpaid debts. ​

Even after asset distribution, the estate remains open until the executor files a petition for discharge and the court issues a decree releasing them from their duties. Without this formal closure, the executor may remain liable for unresolved matters. ​

Factors That Influence the Timeline for Closing an Estate

Several factors can impact how long an estate remains open in New York:

The size and complexity of the estate: Larger estates with multiple assets or properties often take longer to settle due to the time required for inventorying and valuing assets.

The presence of disputes: Contested wills or disagreements among heirs can delay the process significantly, as these issues often require court involvement to resolve.

The probate court’s schedule: The court system’s workload may influence the time it takes to process necessary filings and hearings, particularly in densely populated areas like Long Island.

Tax filings and clearance: Estates subject to federal or New York State estate taxes may require additional time for filing and obtaining clearance from the IRS or the New York State Department of Taxation and Finance.

Locating beneficiaries: If heirs or beneficiaries are difficult to find, it can extend the administration period.

While New York law does not prescribe a strict deadline for closing an estate, executors are expected to act diligently and within a reasonable timeframe.

Factor

Impact on Timeline

Size and Complexity of Estate

Larger or more complex estates take longer due to the time needed to inventory and value multiple assets.

Presence of Disputes

Disagreements among heirs or contested wills require court resolution, delaying the process.

Probate Court Schedule

High court workloads, especially in populous areas like Long Island, can slow down filings and hearings.

Tax Filings and Clearance

Estates subject to federal or state taxes need extra time for filing and obtaining IRS or NY State clearance.

Locating Beneficiaries

Difficulty in finding heirs or beneficiaries can significantly extend the administration period.

Common Misconceptions About Estate Settlement Timeframes

​Many individuals find the estate settlement process in New York to be intricate and emotionally taxing, especially when misconceptions add to the uncertainty. Clarifying these misunderstandings can provide some comfort during a challenging time.​

Fixed Timeframe: New York law does not impose a specific timeframe for the completion of estate administration. However, executors are expected to act with diligence and in the best interests of the estate and its beneficiaries. It’s important to recognize that while there isn’t a fixed deadline, prolonged inaction can lead to complications and potential legal challenges. ​

Immediate Asset Distribution: While it’s natural for beneficiaries to anticipate a prompt inheritance, the executor has the responsibility to first settle any outstanding debts, taxes, and administrative expenses of the estate. This process can take several months. Only after these matters are addressed can the remaining assets be distributed to the beneficiaries.

Estate Closure Equals Executor Discharge: Closing the estate involves more than distributing assets; it requires court approval of the executor’s final accounting and a formal discharge to relieve them of further responsibilities. This step is crucial as it provides legal protection to the executor and confirms that all responsibilities have been fulfilled appropriately.

Being aware of these aspects can help set realistic expectations and reduce stress during the estate settlement process. It’s advisable for executors and beneficiaries to maintain open communication and seek professional guidance when necessary to navigate the process effectively.​

How Long Does Probate Usually Take in New York?

The length of the probate process in New York varies depending on the circumstances of the estate. For simpler estates without disputes, the process can take several months. However, more complex estates may require a year or longer to settle.

Several stages contribute to the overall timeline:

Initial petition and appointment of the executor: Filing the probate petition and receiving court approval can take several weeks to a few months, depending on the court’s schedule.

Notifying creditors and beneficiaries: The executor must provide formal notice, which requires time for parties to respond.

Resolving debts and taxes: Paying outstanding debts and filing estate and income tax returns can add months to the process, particularly if there are delays in obtaining tax clearance.

Asset distribution and final accounting: Once all debts and taxes are settled, the executor must distribute assets to beneficiaries and prepare a final accounting for court approval, which can take additional time.

In general, uncontested estates with minimal assets may close within six to nine months, while contested or large estates often take longer.

Filing Deadlines for Probate Documents in New York

New York law imposes specific deadlines for filing probate-related documents to keep the process moving forward:

Filing the probate petition: There is no strict time limit for filing the petition to begin probate, but it is typically done within a few months of the decedent’s death to prevent delays in administering the estate.

Submitting the estate inventory: Executors must file an inventory of the decedent’s assets with the Surrogate’s Court, usually within six months of being appointed.

Filing estate tax returns: For estates subject to New York estate tax, the executor must file the tax return within nine months of the decedent’s death. Extensions may be requested, but interest on any taxes owed will accrue.

Final accounting: The executor is expected to submit a final accounting to the court once the estate is ready to be closed. While there is no statute-imposed deadline, delays in filing the final accounting can lead to court intervention or complaints from beneficiaries.

Meeting these deadlines is critical to avoid penalties, interest charges, and unnecessary delays in settling the estate.

Factors That Can Delay the Closure of an Estate

While many estates in New York proceed through probate without significant issues, certain circumstances can extend the process. Recognizing these potential delays can help executors and beneficiaries set realistic expectations and take proactive steps to address challenges.​

Litigation over the will: Contested wills or disputes among beneficiaries can significantly delay probate. The court cannot proceed with asset distribution until these matters are resolved.

Creditors’ claims: If creditors file claims against the estate, the executor must resolve these before distributing assets. This can take additional time, particularly if claims are disputed.

Successive Letters and Their Impact on Timelines: If original letters testamentary or administration are revoked and new letters are issued, the timelines for certain actions, such as creditor claims and elective share elections, are typically calculated from the date of the first issuance. However, the court may direct otherwise based on the circumstances.

Estate tax complications: Estates that are subject to audits by the IRS or the New York State Department of Taxation and Finance may face extended timelines until taxes are finalized and clearance is granted.

Missing beneficiaries: If beneficiaries are difficult to locate, the executor must make reasonable efforts to find them, which can prolong the administration process.

While these factors can lengthen the timeline, they are not uncommon in probate cases and must be addressed to comply with court requirements. Executors should be aware of these potential delays and plan accordingly to fulfill their fiduciary responsibilities effectively.

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A Spousal Lifetime Access Trust (SLAT) is a powerful estate planning tool designed to provide financial security for your spouse while also preserving your wealth for future generations. This irrevocable trust allows one spouse, known as the grantor, to transfer assets into the trust, benefiting the other spouse, the beneficiary, during their lifetime. Leveraging a SLAT allows couples to take advantage of gift tax exemptions and reduce the size of their taxable estate, ultimately minimizing estate taxes. Additionally, the assets in a SLAT are protected from creditors, ensuring that your family’s wealth remains intact and secure.

At Schlessel Law PLLC, our experienced NY asset protection lawyers can create customized estate planning solutions, including Spousal Lifetime Access Trusts, tailored to your needs. We understand the challenges of asset protection and are dedicated to helping you achieve financial security for your loved ones. If you’re interested in learning more about how a SLAT can benefit your family, contact Schlessel Law PLLC today at (516) 574-9630 to schedule a consultation. Let us guide you through the process and help you make informed decisions to safeguard your assets and legacy.

Introduction to Spousal Lifetime Access Trusts

Spousal Lifetime Access Trusts (SLATs) are tailored irrevocable trusts designed to benefit your spouse and descendants. These trusts offer a unique blend of asset protection and tax benefits, particularly valuable under New York trust laws. Understanding the purpose and distinct features of a SLAT can help you make informed decisions about estate planning.

Purpose of a Spousal Lifetime Access Trust (SLAT)

A SLAT is established to leverage federal lifetime gift exemptions and minimize estate taxes. In 2024, the federal lifetime gift exemption is $13.61 million, allowing significant tax-free gifting to the SLAT. Transferring assets into the trust means the grantor relinquishes control, while the non-grantor spouse retains access, helping to ensure financial security for the family.

Asset Protection and Estate Reduction

The primary purpose of a SLAT is to reduce the taxable estate of the grantor by making substantial lifetime gifts. This is particularly beneficial for individuals with federally taxable estates. The trust shields these assets from future estate taxes while still providing indirect access through the non-grantor spouse.

Maintaining Access through the Non-Grantor Spouse

Despite giving up control over the assets, the grantor can ensure financial stability as the non-grantor spouse can receive distributions from the SLAT. This safeguard allows for continued support and maintenance of the couple, addressing concerns about asset access.

Inclusion of Descendants

SLATs can be structured to include children and grandchildren as beneficiaries, either concurrently with the non-grantor spouse or as successor beneficiaries. This feature supports multi-generational wealth transfer and estate planning.

Protecting the Surviving Spouse’s Rights and Access

The legal framework of a SLAT should clearly define the terms of access for the surviving spouse. This typically includes stipulations on how and when distributions can be made, which are often limited to the spouse’s needs pertaining to health, education, maintenance, and support (HEMS). This ensures that the surviving spouse can benefit from the assets without compromising the trust’s tax advantages.

Selecting a competent and impartial trustee is vital to managing the trust effectively.  The trustee, whether an individual or institution, is responsible for managing the trust’s assets and making discretionary decisions regarding distributions. This role also includes ensuring the surviving spouse’s needs are met, without jeopardizing the trust’s principal, unless expressly permitted by the trust terms.

Furthermore, careful drafting to avoid triggering the reciprocal trust doctrine is vital. This legal consideration prevents the IRS from treating two mutually created SLATs as invalid for tax benefits, which could otherwise jeopardize the surviving spouse’s access to the assets. This careful structuring is particularly important in New York, where local estate laws interact with these trusts.

Legal guidance is essential when setting up a SLAT, particularly in New York where state-specific legal considerations may affect the structuring of the trust. An attorney can provide valuable advice on how to structure the trust to adapt to changing circumstances which can prevent future legal challenges and ensure that the surviving spouse’s access to the trust assets remains uninterrupted and secure throughout their lifetime.

How a SLAT Differs from Other Trusts

Understanding the distinct characteristics of a SLAT in comparison to other trusts is crucial for effective estate planning. Here’s how a SLAT stands out:

Irrevocability: Unlike revocable trusts, a SLAT is irrevocable, meaning the grantor cannot alter or terminate the trust once it is established. This feature provides strong asset protection and tax benefits but requires careful planning and commitment.

Specific Beneficiary Structure: A SLAT is unique in its primary focus on benefiting the non-grantor spouse while potentially including other family members. This structure differs from other trusts that may not prioritize spousal access or may have different beneficiary configurations.

Federal Gift Tax Exemption Utilization: SLATs specifically utilize the federal lifetime gift exemption, allowing significant tax-free transfers. This aspect is tailored for those seeking to reduce their taxable estate, a feature not all trusts emphasize.

Asset Ownership Requirements: Only individually owned assets by the donor spouse can be transferred into a SLAT. Jointly owned assets are ineligible, a distinction that ensures the trust’s benefits are maximized without compromising its structure.

SLATs offer a strategic approach to estate planning, particularly beneficial under New York laws. They are a powerful tool for asset protection and tax management, as they reduce the taxable estate and offer indirect access to assets through the non-grantor spouse. Understanding their purpose and how they differ from other trusts can help you make the best decisions for your estate planning needs.

Feature

SLAT Characteristics

Irrevocability

Irrevocable, cannot be altered or terminated once established, providing strong asset protection and tax benefits.

Specific Beneficiary Structure

Primarily benefits the non-grantor spouse and potentially other family members.

Federal Gift Tax Exemption Utilization

Utilizes the federal lifetime gift exemption for significant tax-free transfers.

Asset Ownership Requirements

Only individually owned assets by the donor spouse can be transferred into a SLAT.

Advantages and Disadvantages of Spousal Lifetime Access Trust

Spousal Lifetime Access Trusts (SLATs) offer a range of benefits and potential drawbacks. Understanding these aspects is essential for making informed decisions about whether a SLAT is the right estate planning tool for you. This section will delve into the key advantages and disadvantages of establishing a SLAT, with a focus on New York trust laws.

Benefits of Establishing a Spousal Lifetime Access Trust

SLATs present several significant advantages for estate planning, particularly under New York’s regulatory framework.

Reduction of Taxable Estate

Transferring assets to a SLAT removes them from your taxable estate. This strategic move can significantly reduce estate tax liability. For instance, transferring $8 million into a SLAT for a spouse means those assets are no longer part of the taxable estate, potentially saving millions in estate taxes.

Lifetime Access for Spouse

The non-grantor spouse, as the primary beneficiary, has access to the trust’s assets during their lifetime. This feature ensures financial security and support for the spouse, which is crucial if the grantor is hesitant to relinquish control over significant assets.

Future Appreciation and Income Tax-Free

Assets in a SLAT can appreciate and generate income without being subject to additional taxes. This benefit allows the family to enjoy the growth and income from the trust assets without immediate tax implications.

Flexibility in Trustee Selection

While the grantor cannot be a beneficiary, they can remove and replace the trustee with an independent trustee. This flexibility ensures that the trust is managed according to the grantor’s wishes and provides an additional layer of control over the trust administration.

Indirect Access to Funds

Even though the grantor cannot directly access the trust assets, they can indirectly benefit through the non-grantor spouse’s access. This arrangement provides a safety net for the grantor while ensuring the spouse’s needs are met.

Potential Drawbacks and Risks

Despite the numerous benefits, SLATs also come with potential risks and disadvantages that must be carefully considered.

Lack of Control

Establishing a SLAT requires the grantor to relinquish direct control over the trust assets. This loss of control can be difficult, as the grantor cannot decide when and how distributions are made. Trust management is entirely in the hands of the appointed trustee, which may be uncomfortable for some individuals.

Impact of Divorce

In the event of a divorce, the indirect access the grantor has through the non-grantor spouse is lost. The ex-spouse continues to benefit from the trust, which can be problematic. However, this risk can be mitigated by including provisions in the trust documents that terminate the ex-spouse’s interest in the event of a divorce.

Loss of Access if Spouse Passes

If the non-grantor spouse dies before the grantor, the grantor loses indirect access to the SLAT assets. This situation can be challenging as the trust can either terminate and distribute funds to other beneficiaries