New York Trusts: The Questions Every New Yorker Asks, Answered

Most people who come to us about trusts arrive with the same handful of worries: Will my family have to go through probate? Can I protect what I’ve worked for? What happens if I become unable to manage my own affairs? And do I actually need a trust, or is a will enough? These are good questions, and they deserve straight answers grounded in New York law — not generic advice copied from somewhere else.

This page is written as a question-and-answer guide for New Yorkers, whether you live in Manhattan or Brooklyn, out on Long Island, up in Westchester and the Hudson Valley, or anywhere Upstate. Trusts in New York are governed primarily by the Estates, Powers and Trusts Law (EPTL), Article 7, and the rules that follow apply statewide. Below, attorney Russel Morgan, Esq. and the team at Morgan Legal Group walk through what trusts do, the main types, how they’re taxed, and what a trustee is actually responsible for.

When you’re ready to talk through your own situation, you can schedule a consultation.

What is a trust, and why do New Yorkers use one?

A trust is a legal arrangement in which one person (the grantor, sometimes called the settlor) transfers assets to a trustee, who holds and manages them for the benefit of one or more beneficiaries. In New York, trusts are created and governed under EPTL Article 7.

People use trusts for a few recurring reasons:

• To avoid probate. Assets titled in a trust pass to beneficiaries under the trust’s terms without going through the Surrogate’s Court. (More on how this differs from a will below — see our trust vs. will page.)
• For privacy. Unlike a probated will, a trust is a private document. The public generally never sees who got what.
• To plan for incapacity. If you become unable to manage your affairs, a successor trustee can step in immediately, without a court guardianship proceeding.
• To protect assets and plan for the future, including estate-tax reduction and Medicaid planning, depending on the type of trust.

The right trust depends entirely on your goals. That’s why the first question we ask is never “which trust?” but “what are you trying to accomplish?”

The main types of trusts in New York

The biggest practical distinction is whether a trust is revocable or irrevocable. Here’s how the most common New York trusts compare.

Trust type	Can you change it?	Primary purpose	Saves NY estate tax?
Revocable living trust	Yes — amend or revoke anytime	Avoid probate, privacy, incapacity management	No — assets stay in your taxable estate
Irrevocable trust	Generally no	Estate-tax reduction, asset protection, Medicaid planning	Potentially yes (subject to rules below)
Supplemental / special needs trust	Depends on structure	Preserve means-tested benefits for a disabled beneficiary	Varies by structure

Revocable living trust

A revocable living trust is the workhorse of probate avoidance. As grantor, you keep full control: you can amend it, restate it, or revoke it entirely during your lifetime, and you typically serve as your own trustee while you’re able. Its core benefits are avoiding probate, keeping your affairs private, and providing for seamless management if you become incapacitated.

One thing a revocable trust does not do is save estate tax. Because you retain control over the assets, they remain part of your taxable estate. Anyone who tells you a revocable living trust shrinks your New York estate-tax bill is mistaken.

Irrevocable trust

An irrevocable trust generally cannot be amended or revoked once established — and that loss of control is precisely what makes it powerful. By giving up control, the grantor can move assets out of the taxable estate. These trusts are the tool of choice for estate-tax reduction, asset protection, and Medicaid planning.

The most important caveat for Medicaid planning is the five-year look-back: transfers into an irrevocable trust made within five years of applying for certain Medicaid benefits can trigger a penalty period. This is why timing matters so much, and why families who wait until a health crisis often have fewer options than those who plan ahead.

Supplemental (special) needs trust

A supplemental needs trust, or special needs trust (SNT), is authorized under EPTL 7-1.12. Its purpose is to provide for a person with a disability without disqualifying them from means-tested government benefits such as Medicaid and SSI. A properly drafted SNT lets a beneficiary enjoy supplemental support — things those benefits don’t cover — while preserving the benefits themselves. For New York families caring for a child or relative with disabilities, this is often the single most important planning tool.

What does a New York trustee actually have to do?

Serving as trustee is a serious legal responsibility, not just a title. Under New York law, a trustee owes fiduciary duties to the beneficiaries, including:

• The prudent-investor standard. New York’s Prudent Investor Act, found at EPTL Article 11-A, requires the trustee to invest and manage trust assets with care, skill, and caution — diversifying appropriately and considering the trust’s overall purposes.
• The duty of loyalty. The trustee must act in the beneficiaries’ interest, not their own, and avoid conflicts and self-dealing.
• The duty to account. Beneficiaries are entitled to an accounting — a clear record of what came in, what went out, and how the trust was managed.

Trustees are also entitled to commissions, set by statutory schedules under the SCPA and EPTL. We won’t quote a specific figure here because the amount depends on the facts; what matters is knowing that a statutory commission framework exists and that a trustee’s compensation isn’t arbitrary. If you’ve been named trustee, or you’re choosing one, our trust administration page explains how the role works in practice.

How are New York trusts and estates taxed in 2026?

New York imposes its own estate tax, separate from the federal estate tax, and the numbers matter a great deal in planning.

For 2026, the New York basic exclusion amount is $7,350,000. Estates valued at or below that threshold generally owe no New York estate tax.

New York also has one of the most unforgiving features in the country: the “cliff.” If your taxable estate exceeds 105% of the exclusion — $7,717,500 in 2026 — you lose the entire exemption, not just the excess. The estate becomes taxable from the first dollar. An estate that goes even slightly over the cliff can owe dramatically more than one that stays just under it.

2026 NY estate-tax figure	Amount
Basic exclusion amount	$7,350,000
Cliff threshold (105% of exclusion)	$7,717,500
Result above the cliff	Entire exemption lost — estate taxed in full

This cliff is exactly why irrevocable trust planning can be so valuable for larger New York estates: moving assets out of the taxable estate can mean the difference between staying safely under the threshold and falling off the cliff. Revocable trusts, again, do nothing to help here.

Frequently asked questions about New York trusts

Do I need a trust if I already have a will?
Possibly. A will and a trust do different jobs. A will must be probated in the Surrogate’s Court and becomes a public record; a trust avoids probate and stays private. Many New Yorkers use both — a revocable trust to hold and pass assets, plus a “pour-over” will as a backstop. Our trust vs. will page explains the trade-offs.

Will a revocable living trust lower my New York estate tax?
No. Because you keep control over a revocable trust, the assets remain in your taxable estate. To reduce estate tax, you generally need an irrevocable structure that removes assets from your estate.

What is the five-year look-back, and why does everyone mention it?
For Medicaid planning, transfers into an irrevocable trust within five years of applying for certain long-term-care benefits can create a penalty period of ineligibility. Because of this, asset-protection planning works best when done well before a health crisis — not during one.

Can I set up a trust for a child with disabilities without losing their benefits?
Yes. A supplemental needs trust under EPTL 7-1.12 is specifically designed to provide for a disabled beneficiary while preserving means-tested benefits like Medicaid and SSI. The drafting details matter enormously, so this is not a do-it-yourself project.

Who should I name as trustee?
Choose someone trustworthy, organized, and willing to take on real fiduciary duties — the prudent-investor standard (EPTL Article 11-A), the duty of loyalty, and the duty to account. Some families name a relative; others prefer a professional or corporate trustee. We help clients weigh both on our trust administration page.

Talk to a New York trusts attorney

Every family’s situation is different, and the wrong trust — or a trust that’s never properly funded — can do more harm than good. Whether you’re focused on probate avoidance, protecting assets, planning for a loved one with special needs, or keeping a larger estate safely under New York’s estate-tax cliff, the team at Morgan Legal Group, led by Russel Morgan, Esq., can help you build a plan that fits.

Explore our related guides on revocable living trusts, irrevocable trusts, special needs trusts, trust administration, and trust vs. will — or schedule a consultation to discuss your own.

This page is general information about New York law and is not legal advice. For guidance on your specific circumstances, consult a qualified New York attorney. Statutes referenced include EPTL Article 7, EPTL 7-1.12, and EPTL Article 11-A. New York estate-tax information is published by the New York State Department of Taxation and Finance.