A client came to me last year with a difficult problem. Her father, a successful Brooklyn real estate developer, had passed away with a simple will but no trust. His properties, intended to provide for his grandchildren, were instead tied up for over a year in Kings County Surrogate’s Court. Every transaction, every decision, became a matter of public record and required a judge’s permission. This story is common. A well-chosen trust prevents it.
A trust is not just a legal document; it is a private set of instructions for the stewardship of your assets. It allows you to control your legacy with a level of detail and privacy that a will cannot offer. But the word “trust” is a broad category. The instrument you need depends entirely on what you want to accomplish.
The Core Decision: A Trust You Can Change, or One You Cannot
When clients first sit down with me, their initial questions often boil down to one fundamental choice: revocable versus irrevocable. The distinction isn’t about which one is “better”—it’s about the trade-off between control and protection.
A Revocable Living Trust is the most common tool for families who want to maintain control and avoid probate. With this instrument, you transfer your assets into the trust but typically name yourself as the trustee. Nothing changes in your day-to-day life. You can buy, sell, and manage the assets just as you did before. The trust is a contingency plan. Upon your incapacity or death, your chosen successor trustee steps in to manage or distribute the assets according to your private instructions, bypassing the public, costly, and time-consuming Surrogate’s Court process.
An Irrevocable Trust, by contrast, is a permanent decision. When you place assets into an irrevocable trust, you are relinquishing control and ownership. Why would anyone do this? For significant benefits that a revocable trust cannot provide—namely, asset protection from creditors and potential reduction of estate tax liability. By removing the assets from your personal ownership, they are generally shielded from future lawsuits or claims. This is a powerful tool for professionals in high-liability fields or individuals concerned about preserving wealth for the next generation. In New York, the law is specific on this point. Under Estates, Powers and Trusts Law § 7-1.17, a lifetime trust is considered irrevocable unless it explicitly reserves the power to revoke it. This default to permanence underscores the need for deliberate, intentional planning.
Beyond the Basics: Trusts for Specific Family Goals
The revocable/irrevocable distinction is the starting point. The real power of trusts is their ability to address specific family circumstances. A well-crafted plan uses specialized trusts to handle particular contingencies.
For instance, if you have a child or family member with a disability, a Special Needs Trust (SNT) is essential. Leaving assets directly to that individual could disqualify them from critical government benefits like Medicaid and Supplemental Security Income (SSI). An SNT holds the assets for their benefit, allowing the trustee to pay for supplemental needs—things that improve their quality of life—without jeopardizing their eligibility for public assistance. It is an act of profound care.
For married couples with significant assets, we often discuss a Credit Shelter Trust (also known as a Bypass or A/B Trust). This structure allows a couple to make full use of both their state and federal estate tax exemptions. Upon the death of the first spouse, an amount up to the exemption limit is placed in an irrevocable trust for the benefit of the surviving spouse. Those assets can provide for the survivor but are not technically part of their estate, preserving the exemption and allowing more wealth to pass to the next generation tax-free.
Your Trustee: The Custodian of Your Legacy
Choosing the type of trust is only half the work. The other, equally critical decision is selecting your trustee. This person or institution will have a fiduciary duty—the highest standard of care under the law—to manage the trust assets prudently and in the best interests of your beneficiaries.
You can name a family member, a trusted friend, or a professional, such as a lawyer or an accountant. The benefit of an individual trustee is their personal knowledge of your family and your wishes. The drawback can be a lack of financial expertise, the emotional strain of the role, or potential conflicts among beneficiaries. A corporate trustee, like a bank’s trust department, offers professional management, impartiality, and permanence. They won’t get sick or pass away. However, they can be impersonal and may have high minimum asset requirements. Often, the right approach is a hybrid—appointing both an individual and a corporate trustee to serve together, blending personal insight with professional discipline.
Choosing a trust is not about filling out a form. It’s about building a framework to protect your family and direct your legacy for generations. It demands a clear understanding of your goals and a deliberate plan to achieve them.
The first step is not choosing a legal instrument, but defining what matters most to you. Before considering specific trust types, I ask my clients to list their primary goals for their family’s future. Who do you need to protect? What values do you want to perpetuate? Bring those thoughts to your initial consultation. From there, we align the legal structure with your intentions.
