A client recently sat in my office overlooking Madison Avenue, pointed to a thick binder of financial documents, and asked a question I hear almost every week: “What’s the best trust to have?”
He had spent hours online, convinced he needed an ironclad, irrevocable structure to protect his assets. The question is a good one, but it starts from the wrong place. There is no single “best” trust, just as there is no single best tool in a toolbox. A hammer is perfect for a nail, but useless for a screw. The real question is not “what is best?” but “what are we trying to build?”
In my practice, I see a trust not as a static legal document, but as the architectural plan for a family’s legacy. It is a vehicle for stewardship, designed with intention to carry your assets and your values to the next generation. The right structure depends entirely on your specific goals.
The Fundamental Choice: Control vs. Protection
Most trust planning begins with a foundational decision between a revocable and an irrevocable trust. This choice represents a trade-off between flexibility and fortification.
A Revocable Living Trust is the most common starting point for many families. It’s flexible—you, as the grantor, can amend, change, or even completely dissolve it at any time during your life. You can act as your own trustee, maintaining full control over the assets you place within it. Its primary purpose is probate avoidance. Assets held in a revocable trust pass to your beneficiaries outside the supervision of the Surrogate’s Court, saving your family significant time, expense, and public exposure.
However, this flexibility comes at a cost. Because you retain control, the law sees the assets as yours. This means a revocable trust offers virtually no protection from creditors, lawsuits, or the costs of long-term care.
An Irrevocable Trust, by contrast, is a fortress. Once you transfer assets into it, you generally cannot take them back or change the terms. You relinquish control to a trustee who has a fiduciary duty to manage the trust according to your instructions. In exchange for giving up this control, you gain powerful protection. Assets inside a properly structured irrevocable trust are typically shielded from your personal creditors and can be positioned outside of your taxable estate. For many high-net-worth individuals in New York, this is a critical component of generational wealth planning.
Trusts Built for a Specific Purpose
Beyond the primary divide, we design trusts to meet highly specific family objectives. The instrument must fit the intention.
For example, parents or grandparents of a child with special needs face a unique challenge. They want to provide for that child’s future without disqualifying them from essential government benefits like Medicaid or Supplemental Security Income (SSI). A generic trust won’t work—a direct inheritance could jeopardize the child’s eligibility.
In these cases, we establish a Supplemental Needs Trust (SNT). This is a highly specialized irrevocable trust designed to hold assets for the benefit of a disabled individual. The funds are not paid directly to the beneficiary but are used by the trustee to pay for supplemental goods and services—things like education, travel, or therapy—that enhance their quality of life. The rules governing these are strict. New York Estates, Powers and Trusts Law (EPTL) § 7-1.12 lays out the specific requirements for these trusts to ensure they serve their purpose without disrupting public assistance.
Other families are focused on philanthropy. A Charitable Remainder Trust (CRT) can allow you to create an income stream for yourself or your beneficiaries for a set term, with the remainder of the trust assets passing to a charity of your choice upon your death. It’s a deliberate way to support a cause you believe in while also achieving certain tax advantages.
The Trustee: The Human Heart of the Plan
The most sophisticated trust document is worthless without a capable and trustworthy person or institution to execute it. Choosing your trustee is arguably more important than choosing the type of trust.
Your trustee is a fiduciary—the highest standard of care under the law. They have a duty of loyalty, prudence, and impartiality. This role demands financial acumen, sound judgment, and the ability to communicate with beneficiaries who may be grieving or in conflict. Many clients initially name a child or a sibling, and while that can work, it can also place an immense burden on a loved one and create family friction.
We often discuss the merits of appointing a professional or corporate trustee. An institution can provide impartiality, continuity, and professional asset management that an individual might not. The “best” trustee, like the “best” trust, is the one who is best suited for your family’s unique dynamics and the complexity of the assets they will be asked to manage.
Stewardship.
Ultimately, selecting a trust is not a legal transaction; it’s an act of profound personal planning. It requires a clear-eyed assessment of your assets, your family, and your hopes for the future. It’s a conversation before it’s a document.
The first step isn’t to pick a trust from a menu. It’s to articulate the legacy you want to leave. To begin that process, I invite you to schedule a confidential consultation where we can review your family’s specific situation and map out your goals.
