A client came to my Manhattan office recently with what seemed like a straightforward goal. As a successful business owner, she wanted to place her properties into a trust to shield them from future liabilities and plan for long-term care. But she had one condition: she still wanted to be able to access the funds if she needed them. “It’s my money, after all,” she said. “Can’t I be the one who benefits from my own trust?”
The simple answer is yes, a grantor—the person who creates and funds a trust—can also be named as a beneficiary. But in estate planning, the simple answer is rarely the complete one. The real question is not if you can do this, but why you would, and what consequences that decision carries. The type of trust you create dictates whether this dual role is a prudent strategy or one that undermines your entire objective.
The Revocable Trust: Your Assets, Your Control
The most common trust we encounter is the revocable living trust. In this structure, it is not only possible for the grantor to be the beneficiary—it is standard practice. When we set up a revocable trust, my clients typically serve in three roles simultaneously: they are the grantor who creates it, the trustee who manages it, and the primary beneficiary who has full access to the assets during their lifetime.
The primary goals of a revocable trust are probate avoidance and incapacity planning. It acts as a substitute for a will, allowing your assets to pass to your heirs without the time and expense of Surrogate’s Court. It also provides a seamless transition of management to a successor trustee if you become unable to handle your own affairs. It is a tool for management and efficiency.
What it is not, however, is a tool for asset protection. Because you retain complete control and beneficial interest, the law views the assets in a revocable trust as your own. Creditors can reach them, they are counted for estate tax purposes, and they are considered available resources for Medicaid eligibility. In this context, being both grantor and beneficiary is logical because you have not truly given anything away.
The Irrevocable Trust: A Line in the Sand
The conversation changes dramatically when we discuss irrevocable trusts. These are the instruments people use for more advanced goals—protecting assets from creditors, minimizing estate taxes, and planning for the high cost of long-term care in New York. To achieve these protections, the grantor must give up control. This is where naming yourself as a beneficiary becomes a critical—and often problematic—decision.
When you place assets into an irrevocable trust, you are drawing a line. You are legally declaring that these assets are no longer yours to command. If you then name yourself a beneficiary with a right to receive payments from that trust, you blur that line. From a legal standpoint, if you can benefit from the assets, so can your creditors.
New York law is clear on this point. Estates, Powers and Trusts Law (EPTL) § 7-3.1 directly addresses what are known as “self-settled” trusts. The statute states that a trust you create for your own benefit is considered void against your existing or future creditors. You cannot use a trust to build a fortress around your assets while keeping a key for your own personal use. Attempting to do so renders the asset protection ineffective.
The Intentional Trust: Aligning Structure with Purpose
So, does this mean a grantor can never be a beneficiary of an irrevocable trust? Not exactly, but it requires deliberate and careful structuring, with a full understanding of the trade-offs.
For example, some clients establish an Irrevocable Income-Only Trust, often used in Medicaid planning. In this specific design, the grantor can be named as the beneficiary of the trust’s income only. The trustee can distribute interest and dividends to the grantor, but—and this is the crucial part—the trustee is prohibited from distributing the underlying principal back to the grantor. This structure has a very specific purpose related to the five-year look-back period for Medicaid eligibility, and it must be drafted with precision to work as intended.
If the trustee has any discretion to invade the principal for the grantor’s benefit, the trust’s protective shield evaporates. The full value of the trust assets would likely be considered a countable resource, defeating the purpose of years of careful planning.
Ultimately, the question isn’t whether you can be your own beneficiary. It’s about what you are trying to accomplish. Are you planning for orderly management and probate avoidance, or are you seeking generational asset protection? The answer determines the structure. Stewardship.
Before you make any decisions about creating a trust, the foundational step is to clarify your primary objective. I invite you to schedule a legacy planning session with our firm, where we can first map your goals for your family and your assets. Only then can we determine the legal instruments that will faithfully serve that vision.
