Your assets are hard-earned. They can sustain you and your family for your lifetime and beyond with proper management. Although you might manage your assets day to day by focusing on frugality and investments, how do you protect them from a crisis?
This is where asset protection planning in New York matters. With the right legal strategies in place, families can minimize their exposure to creditors, reduce tax liabilities, and plan ahead for long-term care costs. Without planning, the law can work against you.
Attorney Andrew Lamkin of the Law Office of Andrew M. Lamkin, P.C., is a leader in the New York legal community and has extensive experience with protecting New York families’ estates. As an NY asset protection lawyer, Andrew can help you build a more secure future.
Losing Assets Without Planning
Asset protection is a good move for anyone. Financial threats for an average person might include:
- Nursing home costs that often exceed $150,000 per year,
- Medicaid eligibility rules that penalize transfers,
- Creditors and lawsuits,
- Probate costs, and
- Estate taxes.
Without planning, you can lose assets quickly. Planning should happen well before a potential crisis.
How Asset Protection Planning Works in New York
Asset protection planning often employs several legal tools and strategies to safeguard your funds and property against various financial threats. When used correctly, they are proactive and thorough. At its core, asset protection planning focuses on changes in ownership structure and the proper timing of property transfers.
A Revocable or Irrevocable Trust as Asset Protection in NY
One of the most powerful tools available in asset protection is a trust. Under the law, properly structured trusts can remove assets from your personal ownership while still allowing them to benefit your family. A trust can protect against:
- Estate taxes,
- Creditors, and
- Medicaid ineligibility.
Let’s discuss how you can form a trust under New York law and prevent financial drains on your assets.
Forming a Trust
To start, you create a trust in writing and transfer assets into it. Your trust document explains to a trustee (and any reviewing court) how to handle the assets and identifies the trust beneficiaries.
You can form a revocable or irrevocable trust. With an irrevocable trust, you cannot retain direct control of your property after you transfer it. This loss of control is what creates greater protection.
Protection from Probate
Probate is often necessary after someone dies. During probate:
- The court validates or invalidates your will,
- Your personal representative pays your debts and taxes from your estate, and
- Your personal representative distributes your estate’s remaining assets to your beneficiaries.
The probate process can be quite contentious. Additionally, your beneficiaries may be left with only a fraction of what you intended for them to receive due to high taxes, administrative costs, and creditor claims. With a trust, you can diminish or eliminate several of these negatives.
Any property you place in a valid trust bypasses probate. If your trust is irrevocable, the government will likely consider you to no longer own the property in it, reducing or eliminating certain tax liabilities, such as estate taxes.
Long-Term Care Asset Protection Planning
Sometimes, we need extra help from a day-to-day basis. In New York, Medicaid pays for expensive long-term nursing home care for many residents. However, it is a means-tested program. To qualify, you must meet strict income and asset limits. As of January 1, 2025, a single-person household must earn less than $40,000 per year and have fewer than $32,000 in resources to qualify for coverage.
Medicaid limits are very stringent if you own your home or other significant property. You may need to take extra steps to protect your assets from Medicaid in NY.
Many believe that they can just give away assets to family and friends to meet Medicaid coverage limits, but it’s not that easy. Generally, New York’s long-term care rules impose a 30-month or 60-month lookback period for asset transfers. Gifts or trust transfers made during this period can trigger penalties. This is why long-term care asset protection planning should happen early, requiring a trust to get it done.
Because Medicaid penalties can delay care and drain savings, asset protection planning should be handled carefully and well in advance. An experienced asset protection attorney can help you protect assets from Medicaid without triggering costly penalties.
Irrevocable trusts
When you put property in an irrevocable trust before the lookback period starts, Medicaid does not count that property toward income or asset limits, as long as no trust property is paid to you for your benefit. Using irrevocable trusts and compliant transfers can:
- Protect savings and investments,
- Preserve the family home, and
- Avoid spend-down requirements.
Planning early creates certainty. Waiting creates risk. Speak to our experienced NY asset protection lawyer as soon as possible to help avoid penalties and delays.
Special needs trusts
Someone under 65 with a disability may not be subject to the same asset and income counting rules under Medicaid if they have a special needs trust. These trusts must meet the following criteria:
- The person with the disability or their parent, grandparent, legal guardian, or the court must form the trust;
- The trust must be funded with the assets of the person with the disability;
- The trust must declare that the state will be reimbursed for its Medicaid payments from the trust funds after the person with the disability dies.
Our firm can help you navigate these complex rules to protect a younger loved one who needs extra support.
Pooled trusts
A person of any age with a disability might be exempt from asset or income counting rules if their property is in a pooled trust. These trusts must be formed and managed by a nonprofit association, and they must declare that any remaining funds after death will be reimbursed to the state.
Other Forms of Home Ownership
Trusts are not the only way to eliminate the probate process. If you have a life estate in your home with a remainder interest to a loved one, your home can pass automatically to your loved one upon your death without the need for probate. Should you and another person (typically a spouse) own your home as joint tenants with a right of survivorship, full home ownership immediately transfers to your joint tenant without probate.
In general, these forms of ownership are unlikely to affect your tax liabilities or Medicaid eligibility, but they can stop probate court intervention. Our law office can develop tailored estate and asset protection strategies to meet your unique needs.
Frequently Asked Questions About Asset Protection Planning in New York
What is asset protection planning in New York?
Asset protection planning in New York uses legal tools such as trusts, ownership structures, and timing strategies to protect savings, homes, and investments from creditors, taxes, and long-term care costs. Planning early helps families preserve assets while remaining compliant with New York and Medicaid laws.
Can asset protection help protect assets from Medicaid in NY?
Yes. Asset protection planning can help protect assets from Medicaid in NY when done properly and in advance. Tools like irrevocable trusts can remove assets from Medicaid consideration if transfers occur outside the lookback period and follow strict rules.
When should I start asset protection planning?
The best time to start asset protection planning is before a health or financial crisis. Early planning provides more options and avoids penalties, especially when long-term care or Medicaid eligibility may be a concern.
What role does an irrevocable trust play in asset protection?
An irrevocable trust can protect assets by removing them from your personal ownership. In New York, properly structured irrevocable trusts may shield property from estate taxes, creditors, and Medicaid eligibility limits when created and funded correctly.
Do I need an NY asset protection lawyer?
Yes. Asset protection laws are state-specific, and New York has complex Medicaid, tax, and trust rules. An NY asset protection lawyer ensures your plan complies with the law and avoids unintended penalties or loss of benefits.
Does asset protection planning eliminate probate?
Certain strategies, such as trusts or joint ownership with rights of survivorship, can reduce or eliminate probate. Proper planning helps assets pass more efficiently to beneficiaries while minimizing court involvement.
How do I get started with asset protection planning?
Asset protection planning begins with a legal review of your assets, goals, and potential risks. Speaking with an experienced asset protection attorney helps you understand your options and create a plan tailored to your needs.
We Can Be Your Trusted Partner
At the Law Office of Andrew M. Lamkin, P.C., our skilled attorney helps New York individuals and families design custom asset protection strategies that comply with the law and reflect real-life goals. Every plan is tailored. There are no templates and no shortcuts. We can help you decide which form of asset protection planning in New York is best for you. Please contact us by phone or online today to schedule an appointment.
Resources:
- New York State Partnership for Long Term Care, Estimated Average New York State Nursing Home Rates, link.
- New York City Bar, Living Trusts—Revocable & Irrevocable, link.
- New York City Bar, Spendthrift Trust, link.
- Internal Revenue Service, Estate Tax, link.
- New York State Department of Health, New York State Income and Resource Standards for Non-MAGI Population Effective January 1, 2025, link.
- New York State Bar Association, Will a Life Estate Deed Protect My Home from Medicaid? (February 2024), link.
Andrew Lamkin is principal in the law firm of Andrew M. Lamkin, P.C., where he focuses his practice in the areas of elder law, estate planning and special needs planning, including Wills and Trusts, Medicaid planning, estate administration and residential real estate transactions. He is admitted to practice law in New York and New Jersey.
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