It’s also advantageous compared to many other investments due to the fact that it depreciates over time, which can help you preserve wealth.

My net worth is about 10 million, which is obviously a great financial position to be in at my age (mid 30s), but it is also a bit nerve racking trying to figure out the right way to do this.I have a relatively small investment in the financial markets (<10% of my net worth), and now looking to deploy around 5 million total that will kick off an income source while preserving the capital.

The idea is NOT to avoid estate tax, but to preserve the property until the minor grandchild reach age to rent/ maintain the properties or sell them.Any other ideas are greatly appreciate it. 

Is there any strategy to preserve the equity in my mother's home that would not be undone by the 5 year Medicaid look back?

You have to remember that the uncertainty creates anxiety...which leads to possible irrational behavior...meaning tenants default to self-preservation and will do everything possible to resist change....not saying your tenants will do this, but keeping them informed will make everything run smooth.HERE is a doc we provide to all tenants of occupied units (specific to my state)

Their goal often is to keep buying more NNN to eventually replace most of their income so they can retire or sell off the business eventually if they own their business or practice.You have wealth building, wealth stabilizing, and wealth preservation phases.

My suggestion was to start using the home -which actually serves to preserve it, whereas leaving a home empty an unmaintained results in steady decay. 

It sits next to an orange grove, so no rear neighbors and it's close to a nature preserve so it's very quiet.

The arrears amount seems about in line....3 years of interest, late fees, force placed insurance, property taxes, preservation fees if vacant, attorneys, foreclosure costs, etc. 

Find attorney, collateral storage/review co, servicer, preservation co. and title company in that state.3.