Protecting your assets with a trust in New York means using a legal arrangement — governed by the New York Estates, Powers and Trusts Law (EPTL) Article 7 — to hold property for the benefit of yourself or others, so that those assets avoid probate, stay private, and (with the right structure) gain protection from creditors, long-term-care costs, or estate tax. The right trust depends on your goal: a revocable living trust keeps you in full control and avoids probate; an irrevocable trust trades control for tax savings, asset protection, and Medicaid planning; and a special needs trust preserves benefits for a disabled loved one. This guide walks you through the choices and, most importantly, gives you a concrete checklist of next steps.
Why a Trust — and Why Now
A will alone does not protect assets during your lifetime, and it does not avoid probate. When you rely only on a will, your estate must pass through the Surrogate’s Court — a public, time-consuming, and sometimes contested process. A trust, by contrast, lets you transfer assets privately, plan for incapacity, and (depending on the type) shield property from estate tax and long-term-care spend-down.
The stakes in New York are higher than many people realize because of the state’s estate-tax cliff. For 2026, the basic exclusion amount is $7,350,000. But New York does not simply tax the amount above the exclusion — if your taxable estate exceeds 105% of the exclusion ($7,717,500), you lose the entire exemption and the whole estate is taxed. Falling just over the cliff can cost hundreds of thousands of dollars. Proper trust planning is one of the primary tools to manage this exposure.
The Three Trusts That Protect New York Assets
Understanding the differences is the first step. Here is how the main options compare.
| Feature | Revocable Living Trust | Irrevocable Trust | Special Needs Trust (SNT) |
|---|---|---|---|
| Can you change or revoke it? | Yes — full control | Generally no | Limited, varies by type |
| Avoids probate? | Yes | Yes | Yes |
| Saves NY estate tax? | No — assets stay in your taxable estate | Yes (assets removed from estate) | N/A — protects benefits, not tax |
| Asset / creditor protection? | No | Yes | Yes (for the beneficiary) |
| Medicaid planning? | No | Yes — subject to 5-year look-back | Preserves Medicaid/SSI eligibility |
| Privacy & incapacity management? | Yes | Yes | Yes |
| Governing law | EPTL Article 7 | EPTL Article 7 | EPTL 7-1.12 |
Revocable Living Trust
A revocable living trust is the workhorse of probate avoidance. As the grantor, you keep complete control: you can amend it, revoke it, move assets in and out, and serve as your own trustee. Its core benefits are avoiding probate, privacy, and seamless incapacity management — if you become unable to manage your affairs, your named successor trustee steps in without a court guardianship. Be aware of one limitation: because you retain control, the assets remain part of your taxable estate, so a revocable trust does not save New York estate tax. Learn more on our revocable living trust page.
Irrevocable Trust
An irrevocable trust is the tool for serious asset protection. Once funded, you generally cannot amend or revoke it, and you give up direct control of the assets. In exchange, those assets are removed from your taxable estate — reducing or eliminating estate-tax exposure — and are shielded from creditors. Irrevocable trusts are also central to Medicaid planning, but timing is critical: transfers are subject to the five-year look-back period, so the planning must be done well before care is needed.
Special Needs Trust
A supplemental or special needs trust under EPTL 7-1.12 lets you provide for a disabled beneficiary without disqualifying them from means-tested government benefits such as Medicaid and SSI. Funds held in a properly drafted SNT are used to supplement — not replace — public benefits. See our special needs trust page for details.
The Trustee’s Job — and Why It Matters
A trust is only as good as the person who runs it. Under New York law, a trustee is a fiduciary who must follow:
- The prudent-investor standard (EPTL Article 11-A) — investing trust assets with care, skill, and diversification.
- The duty of loyalty — acting solely in the beneficiaries’ interest, never for personal gain.
- The duty to account — keeping records and reporting to beneficiaries.
New York’s SCPA and EPTL set out statutory commission schedules that govern how trustees are compensated. Choosing the right trustee — and understanding ongoing administration duties — is a key part of any plan. Our trust administration page explains what comes after the trust is signed.
Trust vs. Will: A Quick Comparison
Many clients ask whether they even need a trust if they already have a will. The short answer: a will and a trust do different jobs.
- A will is public, takes effect only at death, and must be probated in the Surrogate’s Court.
- A trust is private, can operate during your lifetime (including incapacity), and avoids probate entirely for assets it holds.
For a deeper breakdown, read trust vs. will.
Your Asset-Protection Checklist — Next Steps
Use this practical, step-by-step checklist to move from “thinking about it” to “protected.”
- Inventory your assets. List real estate, bank and investment accounts, retirement plans, business interests, and life insurance with current values.
- Estimate your taxable estate. Compare it to the 2026 exclusion ($7,350,000) and the cliff ($7,717,500). If you’re anywhere near the cliff, prioritize planning.
- Define your goal. Probate avoidance and privacy? Choose revocable. Tax reduction, creditor protection, or Medicaid? Consider irrevocable. Disabled beneficiary? Add an SNT.
- Identify your people. Name a successor trustee you trust and your beneficiaries.
- Have the trust professionally drafted. EPTL Article 7 has specific formalities — DIY trusts often fail when they’re needed most.
- FUND the trust. This is the most-skipped step. A trust controls only the assets actually retitled into it. Re-deed real estate, retitle accounts, and update beneficiary designations.
- Plan the timeline for Medicaid. If long-term care is a concern, act early — the five-year look-back means delay costs eligibility.
- Review every few years and after major life events (marriage, divorce, new child, large asset changes).
Start with our trusts overview to see how the pieces fit together.
Frequently Asked Questions
Does a revocable living trust protect my assets from creditors or estate tax?
No. Because you keep the power to amend and revoke it, the assets stay in your taxable estate and remain reachable by creditors. For protection from creditors, taxes, or Medicaid spend-down, you need an irrevocable trust.
What is the New York estate-tax “cliff”?
For 2026, the basic exclusion is $7,350,000. If your taxable estate exceeds 105% of that amount ($7,717,500), you lose the entire exemption and the whole estate is taxed — not just the excess. Trust planning helps keep estates below the cliff.
What is the Medicaid five-year look-back?
When you apply for Medicaid long-term-care coverage, New York reviews asset transfers made within the prior five years. Transfers to an irrevocable trust must generally be completed before that window to protect the assets, which is why early planning matters.
Will a trust help my disabled child without ending their benefits?
Yes. A special needs trust under EPTL 7-1.12 holds assets to supplement your child’s care while preserving eligibility for means-tested benefits like Medicaid and SSI.
Take the Next Step
Protecting your assets is not a one-size-fits-all decision — it depends on your family, your goals, and your exposure to New York’s estate-tax cliff. The attorneys at Morgan Legal Group, led by Russel Morgan, Esq., help New Yorkers across the state build trusts that actually do the job.
Schedule your 30-minute consultation with Russel Morgan, Esq. and start protecting what you’ve built.
Further reading from Morgan Legal Group: New York estate planning.