Protecting Your Assets With a Trust in New York

Can a trust really protect your assets in New York? Yes — but only the right kind of trust, structured the right way. A properly drafted trust governed by New York’s Estates, Powers and Trusts Law (EPTL) Article 7 can let you avoid probate, keep your affairs private, plan for incapacity, reduce estate tax, shield assets from creditors, and qualify for Medicaid. The catch is that no single trust does all of those things at once. A revocable living trust keeps you in full control and avoids probate but offers no tax or creditor protection, while an irrevocable trust gives up control in exchange for real asset protection and tax savings. Below, we answer the questions New Yorkers ask us most so you can decide which approach fits your family.

At Morgan Legal Group, attorney Russel Morgan, Esq. has guided families across New York State through these exact decisions. This guide is written as a question-and-answer conversation because that is how most clients first approach trust planning.

What Is a Trust, and How Does It Protect Assets?

A trust is a legal arrangement in which you (the grantor) transfer assets to a trustee, who holds and manages them for your chosen beneficiaries. Trusts in New York are governed by EPTL Article 7. The protection a trust provides comes from a simple principle: assets owned by a properly structured trust are no longer owned by you personally — so they can pass outside of probate and, in the case of irrevocable trusts, outside the reach of creditors and certain taxes.

Our Trusts Overview page explains the full menu of options, but most planning starts with three core choices.

Revocable or Irrevocable — Which Trust Should I Choose?

This is the single most important question in New York trust planning. The answer depends on whether your priority is control or protection.

Feature	Revocable Living Trust	Irrevocable Trust
Can you amend or revoke it?	Yes, anytime	Generally no
Avoids probate?	Yes	Yes
Privacy?	Yes	Yes
Manages incapacity?	Yes	Yes
Reduces NY estate tax?	No — assets stay in your taxable estate	Yes
Protects from creditors?	No	Yes
Medicaid planning?	No	Yes (subject to the 5-year look-back)

A revocable living trust is ideal if you want to keep complete control of your assets during your lifetime, avoid the cost and delay of Surrogate’s Court probate, and plan for a smooth transition if you become incapacitated. Just understand its limit: because you can revoke it, the law still treats those assets as yours — so it does not save estate tax or shield assets from creditors.

An irrevocable trust is the tool when protection is the goal. Once funded, you generally cannot amend or revoke it, and you give up direct control. In exchange, the assets leave your taxable estate, become harder for creditors to reach, and — after the five-year look-back — can help you qualify for Medicaid long-term care benefits.

Will a Trust Save Me New York Estate Tax?

Only an irrevocable trust can. This matters because New York has its own estate tax with a notorious “cliff.” For 2026, the basic exclusion amount is $7,350,000. But New York phases out the exemption entirely once an estate exceeds 105% of that amount — $7,717,500. Cross that cliff, and you lose the entire exemption and pay tax on the whole estate, not just the excess.

Because a revocable trust keeps assets in your taxable estate, it provides no relief from this cliff. Families approaching the threshold often use irrevocable trusts to move assets out of the taxable estate well in advance.

How Does a Trust Help With Medicaid and Long-Term Care?

Nursing home care in New York can exceed $15,000 per month, and Medicaid is means-tested. An irrevocable trust — sometimes called a Medicaid Asset Protection Trust — can hold your assets so they no longer count against you. The critical rule is the five-year look-back: transfers into the trust must generally be made at least five years before you apply for institutional Medicaid, or a penalty period applies. This is why early planning is essential.

What About a Child or Loved One With Disabilities?

If you want to leave money to a person with disabilities without disqualifying them from means-tested benefits like Medicaid or SSI, you need a Supplemental (Special) Needs Trust under EPTL 7-1.12. An SNT holds funds that supplement — rather than replace — government benefits, paying for things those programs do not cover while preserving eligibility. Naming the right trustee and drafting the distribution language correctly is essential, because a single misstep can cost the beneficiary their benefits.

What Are the Trustee’s Duties Once the Trust Is Set Up?

A trustee is a fiduciary, held to New York’s highest legal standards. Under the Prudent Investor Act (EPTL Article 11-A), the trustee must invest trust assets prudently, diversifying and managing risk like a careful professional. The trustee also owes a duty of loyalty — acting solely in the beneficiaries’ interest — and a duty to account, meaning beneficiaries are entitled to a transparent record of how the trust is managed.

Because these duties are demanding, many families rely on professional trust administration support to keep the trustee compliant and the beneficiaries protected. New York’s SCPA and EPTL set out statutory commission schedules that govern what trustees may be paid for this work.

Trust vs. Will: Do I Still Need a Will?

A common misconception is that a trust replaces a will. In practice, most plans use both. A trust versus will comparison comes down to two issues: probate and privacy.

• A will must be filed and probated in the Surrogate’s Court, making it a public record and subject to delay, cost, and potential challenge.
• A trust avoids probate entirely and stays private — no court, no public filing of your assets and beneficiaries.

Even with a fully funded trust, a “pour-over” will is recommended to catch any assets that were never transferred into the trust.

Frequently Asked Questions

Does a revocable living trust protect my assets from creditors or lawsuits?
No. Because you retain the power to amend or revoke it, New York law still treats the assets as yours. For creditor and lawsuit protection, an irrevocable trust is required.

Can I be the trustee of my own trust?
For a revocable living trust, yes — you typically serve as your own trustee and keep full control. For an irrevocable trust used for tax or Medicaid planning, you generally should not, because retaining control can defeat the protection.

How long does the Medicaid look-back last in New York?
Five years for institutional (nursing home) Medicaid. Transfers into an irrevocable trust must generally be completed before that five-year window to avoid a penalty period.

Does putting my home in a trust change my STAR or property tax benefits?
It can, depending on the trust type and how it is drafted. This is exactly the kind of detail our attorneys review before funding any trust, so your benefits are preserved.

Speak With a New York Trust Attorney

The right trust can protect your home, your savings, and your family’s future — but only when it is matched to your goals and drafted to New York’s exacting standards. Russel Morgan, Esq. and the team at Morgan Legal Group will help you choose between revocable and irrevocable strategies, plan around the estate-tax cliff and the Medicaid look-back, and protect loved ones with special needs.

Schedule your confidential consultation with Russel Morgan, Esq. and take the first step toward protecting what you have built.