Long Island Medicaid Planning Attorney Seth Schlessel Explains How Life Estate Deeds Can Help Protect Homes From Medicaid

Long Island Medicaid planning attorney Seth Schlessel (https://www.schlessellaw.com/can-a-life-estate-deed-shield-my-home-from-medicaid-in-new-york/) of Schlessel Law PLLC is helping New York residents understand how life estate deeds may play a role in preserving home ownership while maintaining Medicaid eligibility. A life estate deed allows a homeowner to transfer the title of a residence to a designated individual, known as the remainderman, while retaining the right to live in the home for the remainder of the homeowner's life. This legal arrangement can support Medicaid planning by potentially removing the property from countable assets under New York Medicaid rules.

For those concerned about safeguarding property from Medicaid estate recovery, guidance from a Long Island Medicaid planning attorney such as Seth Schlessel is often essential. A life estate deed splits ownership between the life tenant and the remainderman, enabling the life tenant to maintain daily control of the property. Seth Schlessel states, "A life estate deed can serve as a strategic tool in safeguarding your assets while ensuring that Medicaid eligibility requirements are met." Medicaid rules, however, are strict, and timing, documentation, and clear intent must be established to ensure the home is not subject to future claims.

The role of a Long Island Medicaid planning attorney becomes especially important when determining how a life estate deed interacts with New York's 60-month Medicaid look-back period. Seth Schlessel explains that if the life estate deed is established more than five years before applying for Medicaid, the property is typically not counted as part of the Medicaid applicant's assets. In this arrangement, the remainderman gains future ownership rights while the life tenant remains in the home. Under New York law, such a deed can also help the property bypass probate, reducing complications for heirs and potentially avoiding estate recovery by Medicaid.

Seth Schlessel further clarifies that Medicaid does not treat the full value of the home as a gift when a life estate deed is created. Only the value of the remainder interest is considered a transfer, based on actuarial tables tied to the life tenant's age. This valuation helps determine whether a penalty will apply under the look-back rules. If done correctly, the life estate structure may allow for Medicaid eligibility without the need to sell the home or deplete other assets.

Another benefit highlighted by Long Island Medicaid planning attorney Seth Schlessel is the preservation of valuable New York property tax exemptions. Homeowners using a life estate deed can often continue to claim exemptions such as the Basic or Enhanced STAR, Veteran, or Senior Citizen tax breaks. New York Real Property Tax Law views the life tenant as the true owner, allowing continued eligibility for these exemptions if all conditions are met and the life tenant remains in the home. Seth Schlessel advises that correct deed language and communication with the local tax assessor are critical to ensuring these benefits remain in place.

While life estate deeds offer potential advantages, they also involve legal risks. If the remainderman dies before the life tenant, their share typically passes through their estate, possibly complicating future ownership. Issues can also arise if the remainderman becomes estranged, incapacitated, or involved in legal disputes. Seth Schlessel emphasizes that these possibilities must be addressed in advance to avoid disruptions to property transfer and Medicaid planning.

Selling a home under a life estate deed during the life tenant's lifetime can also be complicated. Both the life tenant and remainderman must agree to the sale, and proceeds are divided based on the value of each party's interest. Receipt of sale proceeds may affect Medicaid eligibility, depending on the size of the distribution and the timing of the transaction. Seth Schlessel points out that detailed planning is necessary to avoid unintended financial consequences.

From a tax standpoint, heirs may also face implications. Although the home generally receives a step-up in basis at the time of the life tenant's death-reducing potential capital gains taxes-heirs who did not use the property as a primary residence may still face significant tax bills. Long Island Medicaid planning attorney Seth Schlessel advises families to weigh these considerations carefully as part of an overall estate strategy.

Applying for Medicaid with a life estate deed in place requires accurate reporting. Medicaid applications must include detailed information about the life estate arrangement, including the value of the property and the date of transfer. New York State uses specific actuarial tables and valuation methods to determine whether the transaction affects eligibility. Missing or incomplete information can delay the application or result in penalties. Seth Schlessel urges those considering this option to plan early and document the arrangement clearly.

Seth Schlessel and the team at Schlessel Law PLLC offer legal services tailored to the needs of individuals planning for long-term care. Life estate deeds can be an important legal tool for those seeking to preserve family homes and maintain Medicaid eligibility, but the success of the strategy depends on compliance with complex state regulations. Timing, proper drafting, and coordination with financial goals are all necessary to achieve a favorable outcome.

For those looking to protect family property while preparing for the possibility of long-term care, consulting with a Long Island Medicaid planning attorney such as Seth Schlessel is an important step. A carefully prepared life estate deed can offer both peace of mind and financial security when handled properly.

About Schlessel Law PLLC:

Schlessel Law PLLC is a Long Island-based law firm founded by Seth Schlessel. The firm focuses on Medicaid planning, estate planning, and elder law. Schlessel Law PLLC provides straightforward legal solutions designed to align with each client's financial goals while complying with New York regulations.

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Email: seth@schlessellaw.com

Website: http://www.schlessellaw.com/

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