A trust is a legal arrangement in which a trustee holds and manages property for beneficiaries under terms you set as the grantor. In New York, the central benefit of a properly funded trust is that the assets inside it pass outside probate — they never reach a Surrogate’s Court — while also offering privacy, incapacity protection, and, with irrevocable trusts, shelter from Medicaid spend-down. Trusts are governed by Article 7 of the EPTL, and a trustee owes fiduciary duties under EPTL 11-2.3.
Definitions: Grantor — the person who creates and funds the trust. Trustee — the person or institution managing trust assets. Beneficiary — who benefits from the trust. Corpus — the property held in the trust (the “res”).
Revocable living trust vs. will
Many New Yorkers use a revocable living trust as the centerpiece of their plan, paired with a “pour-over” will. Here is how the two compare:
| Feature | Will | Revocable Living Trust |
|---|---|---|
| Avoids probate | No | Yes (for funded assets) |
| Public record | Yes (filed with Surrogate’s Court) | No — stays private |
| Effective during incapacity | No | Yes — successor trustee steps in |
| Court oversight | Yes | Minimal |
| Cost to create | Lower | Higher upfront |
| Control while alive | N/A | Full — you can amend or revoke |
A revocable trust does not save estate tax — you still control the assets, so they remain in your taxable estate. Its value is probate avoidance, privacy, and incapacity planning. See our New York estate tax guide for the tax side.
Irrevocable trusts and Medicaid Asset Protection Trusts
An irrevocable trust gives up your control in exchange for benefits a revocable trust can’t provide — most importantly, protecting assets from long-term-care Medicaid.
A Medicaid Asset Protection Trust (MAPT) moves your home or savings out of your name so they are not counted for nursing-home Medicaid eligibility. The catch is New York’s 5-year lookback: transfers into the trust must be made at least five years before applying for institutional Medicaid to avoid a penalty period. (New York’s community-based / home-care Medicaid uses a shorter lookback that has been phasing in — verify the current lookback for home care before relying on it.) Because the rules are timing-sensitive, MAPTs reward early planning.
New York trust types at a glance
| Trust type | Revocable? | Primary use |
|---|---|---|
| Revocable living trust | Yes | Probate avoidance, privacy, incapacity |
| Irrevocable / MAPT | No | Asset protection, Medicaid eligibility |
| Supplemental (special) needs trust | No (typically) | Provide for a disabled beneficiary without losing benefits (EPTL 7-1.12) |
| Testamentary trust | Created by will | Trust that springs up after death (still goes through probate first) |
Definition — Supplemental Needs Trust: under EPTL 7-1.12, a trust that supplements (rather than replaces) government benefits for a person with a disability, preserving Medicaid and SSI eligibility.
Funding the trust — the step everyone forgets
A trust controls only what you put into it. An unfunded trust accomplishes nothing. Funding means retitling assets into the trust’s name: changing the deed on real property, re-registering brokerage accounts, and — for New York co-op owners — getting the co-op board’s consent to hold the shares and proprietary lease in trust (EPTL 7-1.12 expressly permits trusts to hold co-op interests, but boards have their own approval process). Skipping funding is the most common reason New York trusts fail to avoid probate.
Trustee duties under New York law
A trustee is a fiduciary and must follow the prudent investor rule of EPTL 11-2.3: invest and manage trust assets as a prudent investor would, diversifying, considering risk and return, and acting in the beneficiaries’ interest. Trustees must also keep records, account to beneficiaries, and avoid self-dealing.
The local angle: why probate avoidance matters across “New York”
Because “New York” can mean Manhattan, the five boroughs, or the whole state, the probate-avoidance value of a trust depends on your asset mix. A Manhattan or Brooklyn co-op owner avoids the slow, public co-op-transfer process in Surrogate’s Court by holding shares in a trust. A Long Island or Westchester homeowner avoids real-property probate. In every county, a funded trust keeps your estate out of the Surrogate’s Court and off the public docket — a meaningful privacy gain in a state where probate filings are public. Compare that with the full New York probate process, and see which “New York” you’re in via our estate guide.
Frequently asked questions
Do I still need a will if I have a trust in New York? Yes — a pour-over will catches assets you never retitled and names a guardian for minor children. The two work together.
Does a revocable trust protect assets from creditors or Medicaid? No. Because you keep control, a revocable trust offers no asset protection. Only an irrevocable trust does.
How long is New York’s Medicaid lookback? Five years for institutional (nursing-home) Medicaid. The home-care lookback has been phasing in and differs — verify the current rule before applying.
Can a New York co-op be held in a trust? Yes, under EPTL 7-1.12, but the co-op board must consent to the transfer of shares and the proprietary lease.
Decide whether a trust fits your New York estate
Trusts are powerful but easy to get wrong — especially funding and Medicaid timing. Book a 30-minute consultation with Russel Morgan.
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