**A trust is a legal arrangement in which a grantor transfers assets to a trustee to hold and manage for beneficiaries. In New York, the core benefit of a trust is that assets titled in the trust pass to beneficiaries outside probate — avoiding the county Surrogate’s Court process — while also enabling privacy, incapacity planning, and, with an irrevocable trust, protection against Medicaid spend-down.** New York trust law is found in EPTL Article 7.
Grantor: the person who creates and funds the trust. Trustee: the person or institution that manages trust assets. Beneficiary: the person who benefits. Corpus: the property held in the trust.
Revocable living trust vs. will: which is right in New York?
A revocable living trust is the most common probate-avoidance tool. You create it during life, transfer assets into it, and retain full control — you can amend or revoke it at any time. At death, your successor trustee distributes the trust assets without court involvement.
| Feature | Revocable living trust | Will |
|---|---|---|
| Avoids probate | Yes (if funded) | No — must be probated |
| Privacy | Private; not filed publicly | Filed with Surrogate’s Court, public |
| Effective during incapacity | Yes — successor trustee steps in | No — requires a separate POA |
| Asset protection from creditors | No (you retain control) | No |
| Upfront cost | Higher | Lower |
| Revocable | Yes | Yes (until death) |
A revocable trust does not save estate tax or protect assets from creditors or Medicaid — because you still control the property, it remains yours for those purposes. For that you need an irrevocable trust.
Irrevocable trusts and Medicaid Asset Protection Trusts
An irrevocable trust removes assets from your control (and ownership) permanently. That tradeoff buys protection: assets properly placed in a Medicaid Asset Protection Trust (MAPT) are not counted for New York Medicaid eligibility — provided the transfer happened before the five-year lookback period for nursing-home (institutional) Medicaid.
This matters enormously in New York, where long-term care costs are among the nation’s highest. If you transfer your home into a MAPT today, it is generally protected after five years; transfer it during a Medicaid crisis and you face a penalty period. Planning early is the entire game.
New York trust types at a glance
| Trust type | Revocable? | Primary purpose |
|---|---|---|
| Revocable living trust | Yes | Probate avoidance, incapacity planning, privacy |
| Irrevocable trust / MAPT | No | Medicaid asset protection, estate-tax reduction |
| Supplemental (special) needs trust | No | Provide for a disabled beneficiary without losing benefits (EPTL 7-1.12) |
| Testamentary trust | Created at death | Holds assets for minors/beneficiaries under a will |
| Irrevocable life insurance trust (ILIT) | No | Keep life insurance proceeds out of the taxable estate |
A supplemental needs trust under EPTL 7-1.12 lets a person with disabilities benefit from inherited assets while remaining eligible for Medicaid and SSI — a vital tool for many New York families.
Why unfunded trusts fail
The single most common trust mistake in New York is failing to fund the trust. A trust controls only the assets retitled into its name. If you sign a revocable trust but leave your house, bank accounts, and brokerage in your own name, those assets still go through probate — defeating the purpose. Funding means:
- Recording a new deed transferring real property to the trust.
- Retitling bank and brokerage accounts in the trust’s name.
- Coordinating beneficiary designations.
A trust paired with a pour-over will catches anything left out, but pour-over assets still pass through probate, so thorough funding is essential.
What are a trustee’s duties under New York law?
A New York trustee is a fiduciary held to the prudent investor standard under EPTL 11-2.3. The trustee must:
- Invest and manage trust assets prudently, diversifying as a reasonable investor would.
- Act impartially among beneficiaries.
- Avoid self-dealing and conflicts of interest.
- Keep accurate records and account to beneficiaries.
A trustee who breaches these duties can be held personally liable. The same prudent-investor standard governs executors and administrators.
Local angle: probate avoidance across New York’s counties
Because New York probate is county-based — your estate is handled by the Surrogate’s Court of your county of domicile (SCPA 205) — the value of a trust depends partly on where you live and what you own. A New York City decedent often owns co-op shares (governed by EPTL 7-1.12 when held in trust, since co-op title is personal property, not real estate), which transfer differently than the single-family homes common on Long Island or the brownstones of Brooklyn. A trust normalizes all of this: regardless of county, funded trust assets skip the local Surrogate’s Court entirely. For the statewide picture, see our New York State estate guide.
Frequently asked questions about New York trusts
Do I need a trust if I already have a will? A will still goes through probate; a funded revocable trust avoids it. Many New Yorkers use both — a trust for the main assets and a pour-over will as backup.
Does a revocable trust protect my assets from Medicaid? No. Only an irrevocable trust (MAPT) funded before the five-year lookback protects assets for institutional Medicaid.
Who should be my trustee in New York? A trusted individual, a professional fiduciary, or a bank trust department — anyone who can meet the EPTL 11-2.3 prudent investor standard.
To find out whether a trust fits your New York estate plan, book a 30-minute consultation with Russel Morgan.
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