Hi everyone,

I’m an estate planning attorney and CFP® based in New York, and I’m exploring a potential future strategy for clients who have significant Roth IRA balances and are concerned about long-term care costs and Medicaid exposure.

As many of you know, New York treats Roth IRAs as fully countable resources for Medicaid eligibility. So even though the taxes have already been paid, a Roth IRA can be entirely subject to spend-down if a client applies for nursing home Medicaid—unless proactive steps are taken.

I’m considering whether it could make sense in some cases to:

• Liquidate the Roth IRA (assuming it’s been open more than 5 years and the client is over 59½)

• Transfer the proceeds into a Medicaid Asset Protection Trust (MAPT)

• Start the 5-year Medicaid lookback clock, with the goal of preserving the funds for beneficiaries

Yes, this would give up the Roth’s tax-free wrapper, but the trade-off is the potential to protect hundreds of thousands of dollars from nursing home spend-down—and still pass that wealth to heirs, even if some growth is eventually subject to capital gains tax.

My main questions are:

1. Trade-Off Justified? – Have any of you implemented or analyzed this strategy in real life? Do you think the loss of Roth tax-free treatment is worth the Medicaid protection and inheritance preservation in higher-risk clients?

2. Would anyone recommend waiting until Roth conversions are fully complete (say over 5 years) before funding a MAPT—or is funding concurrently with each partial conversion the safer move?

3. For high-income/high-asset Roth holders in their late 60s/early 70s with no LTC insurance, at what threshold (asset size or health decline) do you see this Roth-to-MAPT strategy making more sense than just letting the Roth grow and be spent down?

4. Step-Up in Basis – If the MAPT is structured as a non-grantor trust (as it usually is for Medicaid protection), am I correct that no step-up in basis would apply at death?

5. Capital Gains Tax Exposure – If the Roth proceeds are invested in a taxable portfolio inside the MAPT, and those assets are later sold by the beneficiaries, would they owe long-term capital gains tax on all appreciation from the date of transfer?

6. Anything else I am missing, or should consider.

Would love to hear thoughts from others—especially those who work in states like NY where Roths offer no Medicaid exemption and what I am possibly missing.

Thanks in advance for any feedback. I’m open to all feedback or resources anyone can think of. I can’t really find much on the topic.