When a New York Medicaid recipient dies, federal law requires the state to attempt recovery of certain Medicaid expenditures from the deceased's estate. But here's the part most New York families don't know: New York repealed expanded estate recovery in 2011, and operates as a probate-only state. This makes New York meaningfully more consumer-friendly than the majority of other states, and it makes probate-avoidance planning the single most effective tool New York families have for preserving assets across generations.

A New York Medicaid recipient whose home and bank accounts pass to heirs through a living trust, joint tenancy, life estate, or named beneficiary will typically pass those assets free of Medicaid recovery. The same recipient in a state with expanded recovery (Iowa, Massachusetts, Pennsylvania, Indiana, Ohio) might lose those same assets to the state. The mechanism is identical; the rules are different.

This guide walks through how New York Medicaid Estate Recovery actually works in 2026, what triggers recovery, what is exempt, what NY-specific planning techniques are most effective, how the collection process unfolds in practice (especially through NYC HRA), and the common pitfalls families walk into when they assume NY's probate-only framework means "no recovery at all." It does not. It means specific, well-defined recovery, and very effective planning.

What Federal Law Requires (and What It Permits)

Federal Medicaid law (42 U.S.C. § 1396p(b)) sets the floor for what states must recover. Two key requirements:

  1. Mandatory recovery for nursing home and HCBS waiver services. States must seek recovery, against the estate of any deceased Medicaid recipient who received nursing facility services, home and community-based waiver services, or related hospital and prescription drug services, and who was age 55 or older when the services were provided.
  2. Permitted but not required recovery for other Medicaid services. States may also recover for non-LTC Medicaid services received at age 55+, but they are not required to.

Federal law also gives states wide latitude in defining "estate." This is where the NY-vs-other-states divergence becomes meaningful. Two competing definitions:

  • Probate-only (the narrower definition): "estate" = assets that pass through the deceased's probate estate. Excludes living trust assets, joint tenancy, life estates, named-beneficiary accounts, and similar non-probate transfers.
  • Expanded estate (the broader definition): "estate" = probate estate PLUS any assets in which the deceased had any legal title or interest at the time of death, including living trust assets, life estate remainders, jointly held property, and even (in some states) annuity proceeds.

States choose. New York has chosen probate-only since 2011.

The 2011 Repeal: How NY Got Here

Between 2002 and 2011, New York operated under expanded estate recovery. The state had broad latitude to recover from non-probate transfers, and elder-law attorneys had to advise clients accordingly, using more aggressive planning structures (irrevocable trusts in particular) to protect assets.

In 2011, the New York State Legislature passed and the Governor signed legislation repealing expanded estate recovery and reverting to a probate-only framework. The legal authority is found in the Social Services Law § 369 and the implementing regulations at 18 NYCRR § 360-7.11, which were amended to remove the expanded definition.

The 2011 reform was driven by several factors:

  • Cost-effectiveness concerns. Expanded recovery generated relatively modest revenue while creating significant administrative burden and legal disputes.
  • Equity concerns. Many of the assets captured by expanded recovery were modest, small homes held in joint tenancy with adult children, and recovery often had a disproportionately heavy impact on lower-income families.
  • Advocacy pressure. The New York State Bar Elder Law Section, AARP NY, and other advocacy organizations pushed for the change.

The 2011 repeal was substantial and durable. It has not been re-expanded in the 14 years since, and there is no current legislative effort to re-expand it. NY families and elder-law practitioners can plan around the probate-only framework with reasonable confidence.

What Gets Recovered (Under Probate-Only)

If a NY Medicaid recipient (age 55+ at the time services were received) dies and assets pass through their probate estate, those assets are subject to recovery up to the total amount of medical assistance paid on their behalf.

Examples of assets typically in a probate estate:

  • Real estate held in the deceased's individual name (no joint tenant, no transfer-on-death deed, no living trust).
  • Bank accounts, brokerage accounts, and CDs held in the deceased's individual name with no named beneficiary.
  • Personal property (vehicles, jewelry, household contents) held in the deceased's name.
  • Tangible business interests held in the deceased's individual name.

Examples of services that count toward recovery:

  • Nursing facility (NH) Medicaid services.
  • HCBS waiver services (TBI Waiver, NHTD Waiver, OPWDD HCBS Waiver, etc.).
  • Home care, MLTC services, CDPAP services.
  • Hospital services and prescription drugs received in connection with LTC.
  • Other Medicaid services received at age 55+ (within state discretion; NY has historically focused recovery on LTC-related services rather than all services).

What Does NOT Get Recovered

This is the part NY families need to understand most clearly. Under NY's probate-only framework, none of the following are subject to recovery:

Joint Tenancy with Right of Survivorship

Real estate or accounts held with a child (or other person) as joint tenants with right of survivorship pass automatically to the surviving joint tenant at the moment of death, outside of probate. NY MERP does not reach these assets.

Practical example. A NY senior who deeds her home to herself and her daughter as "joint tenants with right of survivorship" with the daughter has structured the home to bypass probate. When the senior dies, the daughter takes the home automatically. NY MERP cannot recover against the home even if the senior received hundreds of thousands of dollars in Medicaid LTC services.

Caveat. Federal Medicaid law does count joint tenancy interests for some purposes (e.g., the resource test during the senior's lifetime), and creating a joint tenancy can constitute a "transfer" subject to the 60-month NH lookback. The lookback consequence and the recovery consequence are separate questions; talk to an elder-law attorney before creating a joint tenancy.

Life Estates

A senior who deeds their home to a child while reserving a life estate for themselves keeps the right to live in the home for life, then the home passes to the child outside of probate at death. The remainder interest does not pass through probate; NY MERP cannot reach it.

Practical example. A NY senior deeds her home to her son in 2025, reserving a life estate. She continues to live in the home, receives Medicaid home care, and dies in 2030. The son takes the home automatically as remainderman. Even though the senior received $400,000 of Medicaid services, NY MERP cannot recover against the home.

Caveat. Creating a life estate is a transfer for purposes of the federal 60-month lookback (and the eventual 30-month community lookback once enforced). Life-estate deeds need to be created at least 60 months before NH Medicaid is sought. There are also gift-tax and basis implications.

Living Trusts (Revocable and Irrevocable)

Assets owned by a properly funded living trust pass to the trust beneficiaries at the senior's death without going through probate. NY MERP does not reach these assets.

Revocable trust caveat. A revocable living trust does NOT protect assets during the senior's lifetime, they remain countable for Medicaid eligibility purposes, but it does protect them from probate (and therefore from MERP) at death. For seniors who want to qualify for Medicaid AND avoid probate recovery, a revocable trust is an inefficient single tool; an irrevocable Medicaid Asset Protection Trust may be more useful.

Irrevocable trust caveat. An irrevocable trust can be structured to remove assets from the senior's estate during life (subject to the 60-month lookback) AND outside of probate at death. This is the most aggressive NY Medicaid planning structure and requires elder-law attorney drafting.

Named-Beneficiary Accounts

Bank accounts with POD ("Payable on Death") beneficiaries, brokerage accounts with TOD ("Transfer on Death") beneficiaries, retirement accounts (IRAs, 401(k)s) with named beneficiaries, life insurance with named beneficiaries, all pass to the named beneficiary outside of probate. NY MERP cannot reach them.

Practical example. A NY senior has $200,000 in a savings account. He names his daughter as POD beneficiary. He receives Medicaid home care for 3 years, generating $150,000 of state expenditures. He dies. The daughter takes the $200,000 outside of probate. NY MERP cannot recover.

Caveat. Named-beneficiary accounts do count for the senior's resource limit during life. A senior with $200,000 in a savings account would not qualify for Community Medicaid (asset limit $33,038) regardless of beneficiary designation. The beneficiary designation only matters for what happens at death.

Real Estate Transfer on Death Deeds

Some states allow real estate to be transferred at death via a "Transfer on Death" deed (sometimes called a Lady Bird Deed in Florida and Texas). NY does NOT currently authorize TOD deeds for real property. However, life estate deeds achieve a similar result, and many NY elder-law attorneys use enhanced life estate deeds (where the senior retains the right to sell or mortgage the property during life) as a TOD-deed alternative.

Statutory Exemptions That Block Recovery

Even when assets are in the probate estate, certain circumstances trigger statutory exemptions. NY MERP is barred from collecting in these scenarios:

Surviving Spouse

If the deceased recipient is survived by a spouse, recovery is deferred (not waived) for the duration of the surviving spouse's life. The state may pursue recovery against the spouse's estate when the spouse dies, but only against assets that were in the original Medicaid recipient's probate estate (not assets that the spouse owned in their own name).

In practice, most cases involving surviving spouses result in no recovery at all because the spouse can use the assets for living expenses and the residual value at the spouse's death is often modest.

Dependent Child Under 21

If the deceased recipient is survived by a child under 21, recovery is permanently waived against the recipient's estate, not deferred. The waiver is total.

Blind or Permanently Disabled Child of Any Age

If the deceased recipient is survived by a child who is blind or permanently disabled (under SSA standards) at any age, recovery is permanently waived.

Sibling with Equity Interest

If the recipient's home is part of the probate estate AND a sibling has an equity interest in the home AND was residing in it for at least 1 year before the recipient's institutionalization, recovery against the home is waived.

Adult Caregiver Child

If the recipient's home is part of the probate estate AND an adult child (any age) was residing in the home for at least 2 years before the recipient's institutionalization AND provided care that allowed the recipient to delay institutionalization, recovery against the home is waived. This is the "Caregiver Child Exemption", federal in origin, applicable to NY MERP.

Hardship Waiver

NYS DOH may waive recovery on a case-by-case basis where pursuing recovery would create "undue hardship", typically defined as:

  • The estate is the sole income-producing asset of survivors and recovery would cause them to require public assistance.
  • The estate is a homestead of modest value (typically valued at less than 50% of the average home price in the recipient's county) where survivors reside.
  • Recovery would deprive an heir of essential support.

Hardship waivers are granted at NYS DOH discretion and require written application.

Estate Worth Less Than $50,000

NY does not pursue recovery against estates valued under $50,000 (administrative threshold).

How the New York Medicaid Estate Recovery Process Actually Works

When a NY Medicaid recipient dies, the recovery process unfolds in stages:

Step 1: Death Notification

NYS DOH (or NYC HRA in NYC cases) is notified of the death, typically through Social Security Administration data sharing, vital records reporting, or notification by the family. The date of death triggers the recovery clock.

Step 2: Estate Identification

NYS DOH/HRA identifies whether an estate has been opened in the appropriate Surrogate's Court (in NYC, the Surrogate's Court of each borough; outside NYC, the county Surrogate's Court). If no estate is opened, the state monitors for one being opened.

Step 3: Notice of Claim

If an estate is opened and assets exceeding $50,000 are involved, NYS DOH/HRA files a Notice of Claim with the Surrogate's Court, identifying the amount of medical assistance paid on behalf of the deceased that is subject to recovery. This claim becomes a creditor claim in the estate.

Step 4: Estate Administration

The estate executor or administrator addresses the claim. The executor verifies the amounts, may negotiate, and may pay the claim from estate assets before distribution to heirs.

Step 5: Hardship/Exemption Review

If the executor or family believes an exemption applies, written application is made to NYS DOH/HRA. The state reviews and either grants or denies the exemption. Denials can be administratively appealed and ultimately challenged in Surrogate's Court.

Step 6: Payment or Discharge

Once the claim is paid (in whole or in part) or formally discharged through exemption, the estate distribution proceeds.

The whole process typically takes 6-18 months from death. NYC HRA cases can be slower than upstate cases due to volume and process complexity. Estates with significant non-probate assets typically resolve quickly because the probate estate is small or empty.

New York Medicaid Estate Recovery Planning Techniques That Actually Work

For families wanting to minimize NY MERP exposure, the practical playbook is:

1. Convert Probate Assets to Non-Probate

The single highest-leverage move. Take assets that would otherwise pass through probate and structure them so they pass outside of probate:

  • Retitle the home as joint tenants with a child (subject to lookback considerations).
  • Retitle the home with a life estate to children (subject to lookback considerations and gift tax).
  • Add POD/TOD beneficiaries to bank, brokerage, and CD accounts.
  • Update IRA, 401(k), and life insurance beneficiary designations.
  • Establish a revocable living trust and re-title assets into it.

2. Use an Irrevocable Medicaid Asset Protection Trust

For more aggressive planning where the senior wants to remove assets from their estate during life (subject to the 60-month lookback) AND avoid probate at death, an irrevocable Medicaid Asset Protection Trust is the standard tool. Drafted by a NY elder-law attorney; transfers to the trust are subject to the 60-month NH lookback for institutional Medicaid (and will be subject to the 30-month community lookback when implemented).

3. Maintain the Caregiver Child Exemption Posture

If an adult child is providing care that allows a parent to remain at home, the child should consider moving in (or maintaining residence in) the parent's home for at least 2 years. This positions the family for the Caregiver Child Exemption, protecting the home from recovery even if it remains in the parent's name through probate.

4. Time Major Transfers Strategically

For families considering major asset transfers (e.g., gifting the home or substantial assets to a child), timing matters:

  • For NH Medicaid: 60+ months before NH care is sought.
  • For Community Medicaid: currently no functioning lookback (as of May 2026), but families should plan for the 30-month lookback to come into force eventually.

5. Use the Spousal Refusal Strategy When Appropriate

NY's spousal refusal procedure under SSL § 366(3)(a) is a unique-to-NY tool (also Florida and Ohio) where the community spouse formally refuses to contribute to the institutionalized spouse's care. This can preserve assets for the community spouse. Spousal refusal is a complex strategy with both benefits and costs; it should only be implemented with elder-law attorney guidance.

6. Don't Over-Plan

The biggest mistake NY families make is over-planning for MERP exposure that doesn't actually exist. A senior whose probate estate consists of $30,000 in personal effects and a car is below the $50,000 threshold and faces no NY MERP claim regardless. A surviving spouse triggers automatic deferral. A blind or disabled child triggers permanent waiver. Many NY MERP "exposure" cases that elder-law clients worry about are not actually exposure cases at all.

Comparison to Other States

NY is one of approximately 15 states that operate as probate-only for Medicaid estate recovery. The majority of states use expanded recovery, which captures life estates, joint tenancy, and other non-probate transfers.

Probate-only states (most consumer-friendly): NY, FL, TX, TN, WA, MI, MA (limited), and several others.

Expanded recovery states: IA, MA (broader), OH, PA, IN, ME, ND, and others, these states reach life estates, joint tenancy, and trust assets.

The state-by-state variance is substantial. A NY senior who structures their estate around probate avoidance has dramatically more latitude to preserve assets for heirs than a senior in Iowa or Pennsylvania doing the same thing. New York is one of the most consumer-friendly estate recovery states in the country, alongside Tennessee, Texas, Florida, and a small handful of others.

Common Pitfalls

  1. Confusing probate-only with no-recovery-at-all. NY does pursue recovery against probate assets. Don't assume "NY repealed expanded recovery" means MERP doesn't apply.
  2. Assuming a will avoids probate. A will does NOT avoid probate. A will directs the distribution of probate assets but everything still passes through Surrogate's Court. To bypass probate, you need non-probate transfers (trusts, joint tenancy, named beneficiaries).
  3. Adding a child to a deed too aggressively. Joint tenancy avoids probate but can create gift-tax exposure, complicate the lookback analysis, and subject the home to the child's creditors. Life estates may be a better tool depending on circumstances.
  4. Forgetting beneficiary designations. Many seniors have life insurance, IRAs, or bank accounts that no longer have current beneficiaries (or have outdated beneficiaries). Updating beneficiary designations is one of the highest-leverage and lowest-effort planning moves.
  5. Ignoring the 60-month NH lookback. Estate-recovery planning is separate from lookback planning, but transfers made in the last 60 months can trigger NH penalties even if they bypass MERP.
  6. Failing to maintain the Caregiver Child Exemption posture. Adult children providing care often don't realize the 2-year residency requirement and lose the exemption opportunity.
  7. DIY estate planning for complex situations. NY estate recovery rules are not intuitive, the lookback rules interact with planning techniques in subtle ways, and federal and state rules diverge in important details. For meaningful estates ($100,000+), a NY elder-law attorney is almost always worth the cost.

Where to Get Help

For NY estate planning and elder-law strategy: A New York elder-law attorney is essential for any case involving meaningful assets. The New York State Bar Association Elder Law and Special Needs Section maintains a referral directory; NAELA New York chapter does as well.

For NYC Medicaid recovery questions: NYC HRA Office of Estate Recovery handles NYC cases. Outside NYC, NYS DOH Bureau of Medicaid Estate Recovery handles state-level recovery.

For non-probate planning forms (POD, TOD, beneficiary updates): Most banks, brokerages, and insurance companies have standard beneficiary designation forms. These are typically free and easy to update.

For trust drafting: An irrevocable Medicaid Asset Protection Trust requires NY elder-law attorney drafting. Costs typically range from $3,000 to $10,000 depending on complexity. Revocable living trusts can be drafted by general estate attorneys at lower cost ($500-$2,000) but provide less protection.

For surviving spouse cases: The recovery deferral protects the surviving spouse during life, but planning for what happens at the surviving spouse's death is important. Talk to an elder-law attorney about post-deferral planning.

Frequently Asked Questions

No. Assets owned by a properly funded living trust pass to the trust beneficiaries outside of probate, and New York's Medicaid Estate Recovery Program (MERP) recovers only against probate assets. A revocable trust does not protect assets during the senior's lifetime for eligibility purposes, but it removes the home from the probate estate at death, which is what NY MERP reaches. An irrevocable Medicaid Asset Protection Trust offers both lifetime and post-death protection (subject to the 60-month lookback).

No, not during the spouse's lifetime. Recovery is deferred while the surviving spouse is alive, and the state may pursue recovery from the spouse's estate at death, but only against assets that were in the original recipient's probate estate. In practice, most surviving-spouse cases produce no recovery because the spouse spends the assets on living expenses.

Yes. Property held in joint tenancy with right of survivorship passes automatically to the surviving joint tenant at death, outside of probate. NY MERP cannot reach those assets. Be careful: creating a joint tenancy can be a transfer subject to the 60-month nursing-home lookback, and it can create gift-tax exposure and expose the home to the joint tenant's creditors.

No. NYS DOH does not pursue recovery against estates valued under approximately $50,000 (administrative threshold). Many seniors whose probate estates fall below this floor face no NY MERP claim regardless of the Medicaid services they received.

If an adult child resided in the recipient's home for at least 2 years before the recipient's institutionalization AND provided care that allowed the recipient to delay institutionalization, the home can be transferred to the child without triggering a transfer penalty AND is exempt from MERP. Document residency with utility bills, voter registration, driver's license, and a written physician letter on the care provided.

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.

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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.