New York Medicaid Estate Recovery 2026: Probate-Only Rules Explained

New York Medicaid estate recovery reaches only the assets that pass through the deceased recipient's probate estate, and nothing else. If the family home, the bank accounts, or the brokerage account passed to heirs by joint ownership, a life estate, a living trust, or a named beneficiary, New York does not recover against them. That single rule is why the worry most families arrive with, will Medicaid take Mom's house?, usually has a reassuring answer in New York: not if the house was titled to pass outside probate.1

Estate recovery is a federal requirement, not a New York invention. Federal law (42 U.S.C. 1396p(b)) requires every state's Medicaid program to seek recovery, after death, from the estate of a recipient who was 55 or older when they received long-term-care services, or who was permanently institutionalized.2 What states choose is how broadly to define "estate," and New York chose the narrow, probate-only definition. Recovery here is administered by the New York State Office of the Medicaid Inspector General (OMIG) under Social Services Law § 369 and 18 NYCRR 360-7.11.1

This guide covers what New York can and cannot reach, what triggers a claim, the deferrals and exemptions that stop recovery, how the OMIG process unfolds, and the planning moves that work here.

What New York Recovers, and What It Cannot

Start with the asset-by-asset reality, because it is where families either lose or keep the home. New York recovers only from the probate estate: the assets the recipient owned in their own name with no co-owner and no named beneficiary. Everything that passes outside probate passes outside recovery.1

OMIG states the rule directly: its "Medicaid claim is against the deceased recipient's estate assets only," and it "pertains only to assets in the deceased recipient's name." A jointly owned home with right of survivorship passes to the co-owner at the moment of death and never enters the estate, so it is never recovered against, however much long-term-care Medicaid the recipient received.1

Two important caveats

A will does not avoid probate. This is the most common misunderstanding. A will directs how the probate estate is distributed; it does not keep assets out of probate. To pass an asset outside probate, and therefore outside recovery, you need a non-probate mechanism: joint ownership with survivorship, a life estate, a funded trust, or a beneficiary designation.

Probate-avoidance and eligibility are separate questions. Re-titling assets to pass outside probate protects them from post-death recovery, but the same transfer can still count against the recipient during life or trigger a look-back penalty. New York applies the federal 60-month look-back to Nursing Home Medicaid. For community-based long-term care (home care, MLTC, CDPAP), New York authorized a separate 30-month look-back by statute on April 2, 2020, with the transfer rules stated to be effective October 1, 2020, and told CMS the earliest it would seek implementation was March 31, 2024. Do not assume a home-care transfer carries no penalty. Confirm the community transfer rules in force today with your local social services district or a New York elder-law attorney before making any gift.3

The Federal Floor and New York's Probate-Only Choice

Federal Medicaid law (42 U.S.C. 1396p(b), enacted by the Omnibus Budget Reconciliation Act of 1993, or OBRA '93) sets the floor every state must meet. States must seek recovery from the estate of a deceased recipient who was 55 or older when they received nursing facility services, home and community-based services (HCBS), and related hospital and prescription-drug services, and from a recipient of any age who was permanently institutionalized.2

Federal law then gives states a choice in how they define "estate":

• Probate-only (the narrow definition): "estate" means only the assets that pass through the deceased's probate estate. Living-trust assets, joint tenancy, life estates, and named-beneficiary accounts are excluded.
• Expanded estate (the broad definition): "estate" reaches any property in which the deceased held a legal interest at death, including non-probate transfers such as joint tenancy, life estates, and living trusts.2

New York uses the probate-only definition. A revised version of 18 NYCRR 360-7.11 briefly implemented an expanded definition of estate; that regulation expired effective December 6, 2011, and since then New York's local districts must not include assets that pass outside the probate estate as part of a decedent's estate for recovery purposes. That is the framework in force in 2026.3 New York Social Services Law § 369 sets the same limit in statute, defining "estate" as property "passing under the terms of a valid will or by intestacy."1

Who and What Triggers a New York Claim

Recovery applies only to recipients who were age 55 or older, or permanently institutionalized at a medical facility, when they died.1 Federal law keys the age test to when the person received the assistance rather than to age at death, so the two can diverge for someone who got long-term-care Medicaid before 55 and died after 55; confirm your own case with OMIG or an elder-law attorney. Federal law defines permanent institutionalization as a recipient who is an inpatient in a nursing facility, an intermediate care facility, or another such medical institution, and who cannot reasonably be expected to be discharged and return home.2

The Medicaid payments subject to recovery include home and community-based services, nursing facility services, hospital, physician, and prescription-drug services, and the monthly capitation payments made on behalf of a recipient enrolled in Medicaid managed care, regardless of how much the actual services cost the managed-care plan. A claim amount can be determined only after the recipient's date of death, and it can still change afterward because providers have up to a year to submit claims.1

To preserve its recovery right, New York may place a lien on a deceased recipient's real property. No action is taken on the lien until the property is sold, and if a family member wishes to live in the property rather than sell it, no recovery is made until the title or deed is transferred and the recipient's name is removed.1

Deferrals, Exemptions, and the Undue-Hardship Waiver

This is where families most often have protection they did not realize they had. New York draws a clear line between a deferral (recovery is paused until a condition ends) and an exemption (recovery is barred entirely).1

Deferrals: surviving spouse and protected children

Recovery is deferred if the deceased recipient is survived by:

• a spouse;
• a child under age 21; or
• a child of any age who is certified blind and/or disabled.

Medicaid recovers only when these deferral circumstances no longer apply. For a surviving spouse the practical effect is usually no recovery at all: the spouse uses the assets during life, and OMIG reviews potential recovery from the spouse's own estate only at the spouse's death, as required by law, by which point the recipient's assets have typically been spent or passed into the spouse's name. A surviving spouse is never personally responsible for the claim.1

Exemptions: Partnership policies and tribal assets

Two circumstances bar recovery outright:

• The recipient received 36 months of nursing-home benefits (or the equivalent) under a long-term-care insurance policy approved through the New York State Partnership for Long-Term Care.1
• Certain income, property, and resources of Native Americans or Alaskan Natives.1

The undue-hardship waiver

Recovery may be waived, in whole or in part, where it would cause undue hardship to an heir, survivor, or beneficiary. New York recognizes undue hardship in two specific situations:

1. The asset subject to recovery is the sole income-producing asset of the beneficiary, such as a family farm or family business, and the income it produces is limited; or
2. The asset is real property of modest value, defined as a value no higher than 50 percent of the average selling price in the county where the home is located as of the recipient's date of death, and the home is the primary residence of the beneficiary.1

Request undue-hardship consideration on the Estate Questionnaire that arrives with the Notice of Intent to File a Claim. Hardship is not found when the only basis is a wish to maintain a pre-existing lifestyle, or when the claimed hardship results from Medicaid or estate-planning divestiture of assets.1

A note on the "caregiver child" rule

Families often hear about a "caregiver child exemption." Two different federal rules go by that name, and they do different work. Neither is on New York's own exemption list above, which is the Partnership policy and the Native American or Alaskan Native assets; both are federal rules that bind New York.

1. The lifetime transfer exception. Under 42 U.S.C. 1396p(c)(2)(A)(iv), a parent may transfer the home during life, without a look-back transfer penalty, to a son or daughter who lived in the home for at least two years immediately before the parent became institutionalized and who, as determined by the state, provided care that let the parent stay home rather than enter a facility.2 Because the home leaves the parent's name during the parent's life, it also falls outside probate recovery at death.

2. The residency protection after death. Separately, 42 U.S.C. 1396p(b)(2)(B) bars recovery, where a lien has been imposed on the home under 42 U.S.C. 1396p(a)(1)(B), for as long as a qualifying son or daughter (the same two-year, care-providing test) or a sibling who resided in the home for at least one year immediately before admission is lawfully residing in the home and has resided there continuously since the date of admission. Read that bound closely: it attaches to the lien branch, and a qualifying relative who moved out after the admission and later returned falls outside it on the statute's face.2 New York's own post-death lien practice runs in the same direction: if a family member wishes to live in the real property rather than sell it, no recovery is made until the title or deed is transferred and the recipient's name is removed.1

How the New York Medicaid Estate Recovery Process Works

Recovery is administered by OMIG, not by a county social-services district and not by a separate New York City office. OMIG's contract vendor, Health Management Systems, Inc. (HMS, a Gainwell Technologies company), does the asset research and supports the county attorneys who appear in Surrogate's Court for the State. Three stages follow.1

Planning Techniques That Work in New York

Because New York is probate-only, the entire planning game is to move assets out of the probate estate, well ahead of any Medicaid application.

1. Convert probate assets to non-probate assets

The highest-leverage move. Re-title the home as joint tenancy with right of survivorship or with a retained life estate; add POD or TOD beneficiaries to bank and brokerage accounts; keep IRA, 401(k), and life-insurance beneficiary designations current; or fund a revocable living trust. Each passes the asset outside probate, and therefore outside recovery. But a beneficiary designation matters only at death: the asset still counts toward the resource limit during life. New York's non-MAGI (SSI-related) Medicaid resource limit is $33,038 for a household of one in 2026, so a large account still has to be planned around regardless of who the beneficiary is.3

2. Use an irrevocable Medicaid asset protection trust

For families who want assets out of the estate during life and outside probate at death, an irrevocable Medicaid asset protection trust, drafted by a New York elder-law attorney, is the standard tool. Transfers into the trust are subject to the 60-month nursing-home look-back, so the trust must be funded well in advance.3

3. Position for the caregiver-child transfer

If an adult child is providing care that lets a parent stay home, the child living in the parent's home for at least two years before any institutionalization positions the family to transfer the home to that child without a look-back penalty, which also removes it from the parent's estate.2

4. Spousal refusal, when appropriate

New York's spousal-refusal procedure under SSL § 366(3)(a) lets the community (well) spouse formally decline to make their income and resources available toward the institutionalized spouse's care, after which the applicant spouse's eligibility is determined without counting the refusing spouse's income and resources. It is a powerful but complex tool that should be used only with elder-law guidance.4

5. Use a pooled income trust for community Medicaid

A New York pooled income trust lets an aged or disabled applicant whose income exceeds the community Medicaid limit deposit the excess into a nonprofit-administered trust and still qualify for home care, Managed Long Term Care (MLTC), or the Consumer Directed Personal Assistance Program (CDPAP), without surrendering that income. It is an income tool rather than an estate-recovery tool, but it is part of the same long-term-care plan.2

6. Do not over-plan

The most common mistake is planning against exposure that does not exist. A surviving spouse defers recovery. So does a blind or disabled child. A modest home that is a beneficiary's primary residence may qualify for the undue-hardship waiver. Many cases families lose sleep over carry no real recovery exposure at all.1

How New York Compares to Other States

New York recovers from the probate estate only. Federal law lets a state go further and reach non-probate transfers such as joint tenancy, tenancy in common, survivorship, life estates, and living trusts, and some states, Ohio among them, have taken that option.2 That contrast is what makes probate-avoidance planning so much more effective in New York than in an expanded-recovery state.

The state-by-state variance is large, so always confirm the rule in the state where the recipient lived and died.

Common Pitfalls

1. Confusing probate-only with no recovery at all. New York does pursue recovery against probate assets. Probate-only means well-defined recovery, not zero recovery.1
2. Assuming a will avoids probate. It does not. Only non-probate transfers keep assets out of probate.
3. Re-titling a home too aggressively. Joint tenancy avoids probate but can carry gift-tax exposure, complicate the look-back, and expose the home to the co-owner's creditors. A life estate or trust may be the better tool.3
4. Forgetting beneficiary designations. Outdated or missing POD/TOD and retirement beneficiaries are the most common, lowest-effort planning gap.
5. Treating recovery planning and look-back planning as one question. A transfer that avoids recovery can still trigger a transfer penalty.3
6. Missing the Estate Questionnaire. When the Notice of Intent to File a Claim arrives, complete and return it, and flag any deferral, exemption, or undue-hardship basis in the response.1
7. DIY planning for meaningful estates. New York's recovery, look-back, and planning rules interact in subtle ways; an elder-law attorney is almost always worth the cost.

Where to Get Help

Start with these resources for questions about recovery, deferrals, exemptions, the undue-hardship waiver, or planning.

Related Reading

• Medicaid Estate Recovery Explained, the federal hub on the OBRA-93 mandate, 42 U.S.C. § 1396p(b), and cross-state planning.
• New York Spousal Refusal, the companion planning tool under SSL § 366(3)(a).
• New York Pooled Income Trust, the workaround for over-income community Medicaid applicants.
• Massachusetts Estate Recovery: like New York, probate-only.
• Ohio Medicaid Estate Recovery: Ohio's expanded recovery is the inverse of New York's probate-only framework.

Learn More

Find personalized help navigating New York Medicaid estate recovery at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.