Most people do not want a trust. They want a result: to keep their family out of court, to shield a home from the cost of nursing care, to protect a disabled child without disqualifying them from benefits, or to keep an estate under the New York tax threshold. A trust is simply the legal tool that produces those results. This page is organized around the problems first, then the trust that solves each one.
Morgan Legal Group, led by attorney Russel Morgan, Esq., builds trusts for clients across New York State — New York City, Long Island, Westchester, the Hudson Valley, and Upstate. Below, we match common New York estate problems to the specific trust structure under EPTL Article 7 that fixes them.
The Problem-to-Solution Map
A trust is a relationship: a grantor (you) transfers assets to a trustee to hold for the benefit of beneficiaries, under the terms you write. The differences between trusts come down to one question — can you take the assets back? That single choice determines whether you solve a probate problem, a tax problem, or a long-term-care problem.
| Your problem | The solution | What it actually does |
|---|---|---|
| “I don’t want my family stuck in Surrogate’s Court.” | Revocable living trust | Assets you retitle into it pass outside probate — privately and quickly. |
| “I’m afraid a nursing home will take our house.” | Irrevocable Medicaid trust | Removes assets from your name; protects them after the 5-year look-back. |
| “My estate is near the NY tax cliff.” | Irrevocable trust / credit-shelter planning | Moves value out of your taxable estate to reduce or avoid NY estate tax. |
| “My child with a disability needs to stay on benefits.” | Supplemental needs trust (EPTL 7-1.12) | Provides for them without counting as a resource for Medicaid/SSI. |
| “I want control over how and when heirs inherit.” | Testamentary or discretionary trust | Releases funds on your terms — age milestones, spendthrift protection. |
The rest of this page works through each of these in plain terms.
Solution 1: Avoiding Probate — the Revocable Living Trust
The problem. When you die owning assets in your own name, those assets generally pass through probate in Surrogate’s Court before anyone can touch them. Probate is public, it takes months, and if a will is contested it can take far longer. For New Yorkers who own real estate in more than one county or state, it can mean multiple court proceedings.
The solution. A revocable living trust. You create it during your lifetime, name yourself trustee, and retitle assets — your home, accounts, brokerage holdings — into the trust’s name. Because the trust (not you personally) owns the assets, there is nothing in your individual name to probate. A successor trustee you name steps in instantly at death or incapacity and distributes everything according to your instructions, with no court involvement.
Honest limits. A revocable trust avoids probate; it does not save estate tax. Because you keep the power to revoke or amend it, the law still treats the assets as yours for tax purposes. It also only works for assets you actually move into it — funding the trust is the step people skip, and an unfunded trust solves nothing. A revocable trust pairs with a “pour-over” will that catches any forgotten asset; see our wills page for how the two work together.
Solution 2: Protecting Assets from Nursing-Home Costs — the Irrevocable Medicaid Trust
The problem. Long-term care in New York is among the most expensive in the country. A single extended nursing-home stay can consume a lifetime of savings and force the sale of a family home. Medicaid can pay for that care, but only if your countable assets are low enough.
The solution. An irrevocable Medicaid asset protection trust. You transfer assets — most often the house — into a trust you cannot revoke. Because you give up control, the assets are no longer counted as yours for Medicaid eligibility. You can retain the right to live in the home and receive trust income, while the principal is protected for your heirs.
The catch you must plan around. Medicaid imposes a 5-year look-back. Transfers into the trust within five years of applying for nursing-home Medicaid can trigger a penalty period of ineligibility. The lesson is timing: this trust is a planning tool, most powerful when set up well before care is needed. Acting early is the whole game. We cover how this trust coordinates with the rest of your plan on our estate planning overview.
Solution 3: Reducing New York Estate Tax — Irrevocable Trusts and the Cliff
The problem — and it’s a sharp one. New York taxes estates above a threshold, and 2026 has a trap most states don’t.
For deaths on or after January 1, 2026, the New York basic exclusion amount is $7,350,000. Below that, no New York estate tax. But New York phases out the exemption with a “cliff” set at 105% of the exclusion — $7,717,500. An estate valued over the cliff loses the entire exemption and is taxed from the very first dollar, at progressive rates from 3% to 16%.
| 2026 NY estate-tax fact | Figure |
|---|---|
| Basic exclusion amount | $7,350,000 |
| Cliff (105% of exclusion) | $7,717,500 |
| Estate at or below exclusion | No NY estate tax |
| Estate over the cliff | Entire estate taxed, dollar one |
| Tax rate range | 3% – 16% (progressive) |
| New York gift tax | None — but gifts within 3 years of death are added back |
The solution. For estates near or over the cliff, irrevocable trusts move value out of your taxable estate. Assets gifted into a properly structured irrevocable trust are generally no longer yours at death, which can drop your estate below the exclusion — or under the cliff — and preserve the exemption entirely. Credit-shelter (bypass) trusts let married couples use both spouses’ exclusions instead of wasting one.
A New York-specific warning. New York has no gift tax, which makes lifetime gifting attractive. But the state adds back any gifts made within three years of death to the taxable estate. Deathbed gifting does not work here. This is why estate-tax trust planning must be done with margin, not in a crisis. See our New York estate tax guide for a fuller breakdown.
Solution 4: Providing for a Loved One with a Disability — the Supplemental Needs Trust
The problem. Leaving money directly to a child or relative who receives Medicaid or SSI can backfire. A direct inheritance counts as a resource and can disqualify them from the very benefits that pay for their care and housing.
The solution. A supplemental needs trust, authorized by EPTL 7-1.12. The trust — not the beneficiary — holds the funds, and a trustee uses them for supplemental needs the benefits don’t cover: therapies, education, travel, technology, quality-of-life items. Because the beneficiary cannot demand the principal, it isn’t counted against them, and benefits continue uninterrupted. This is one of the most important protective trusts in New York for families with special-needs members.
Solution 5: Controlling How Heirs Inherit — Discretionary and Testamentary Trusts
The problem. Sometimes the worry isn’t court or tax — it’s the heir. A young adult, a beneficiary with creditors or a divorce risk, or someone who struggles with money can lose an outright inheritance quickly.
The solution. Trusts that distribute on your terms. A discretionary trust gives the trustee authority to release funds gradually — at certain ages, for certain purposes, or with spendthrift protection that shields the inheritance from a beneficiary’s creditors. These terms can live inside a revocable living trust or be created under your will as a testamentary trust.
Where Trusts Fit in a Complete New York Plan
A trust is powerful, but it is one instrument in a quartet. A coordinated New York estate plan combines a will (EPTL §3-2.1 — two attesting witnesses, signature at the end, publication), one or more trusts, a durable power of attorney (GOL §5-1513, the 2021 statutory short form), and a health care proxy (Public Health Law Article 29-C) for medical decisions.
Skip the will and any asset you forgot to fund into the trust falls into intestacy under EPTL Article 4 — distributed by a rigid statutory formula, not your wishes. Skip the power of attorney and health care proxy, and a trust does nothing if you become incapacitated and someone needs to manage the assets outside the trust or make medical choices. Trusts handle property at death and protect assets in life; the proxy and POA handle the decisions only a living person can authorize. We explain the partners on our power of attorney and healthcare proxy pages.
For a county-by-county look at how this works across the state, see our New York statewide guide.
Frequently Asked Questions
Does a revocable living trust lower my New York estate tax?
No. A revocable trust avoids probate and provides incapacity protection, but because you keep the power to revoke it, the assets remain part of your taxable estate. To reduce New York estate tax — especially near the 2026 cliff of $7,717,500 — you need an irrevocable trust that removes value from your estate.
What is the 5-year look-back, and how does it affect a Medicaid trust?
When you apply for nursing-home Medicaid, the program reviews asset transfers from the prior five years. Transfers into an irrevocable Medicaid trust during that window can create a penalty period. That’s why the trust should be funded well in advance — ideally more than five years before care is needed.
Can I leave money to a disabled child without ending their benefits?
Yes — through a supplemental needs trust under EPTL 7-1.12. The trust holds the funds for supplemental needs that public benefits don’t cover, so the inheritance isn’t counted as the beneficiary’s resource and Medicaid or SSI continues.
New York has no gift tax — can I just give everything away before I die?
New York imposes no gift tax, but it adds back gifts made within three years of death to your taxable estate. Deathbed gifting won’t dodge the estate tax. Effective gifting and trust funding must happen with time to spare.
Do I still need a will if I have a trust?
Yes. A “pour-over” will catches any asset you didn’t transfer into the trust and directs it there, and it’s where you name guardians for minor children. Without a will, forgotten assets pass under New York intestacy law (EPTL Article 4).
Ready to Solve It?
The right trust depends on the problem you’re trying to fix. Russel Morgan, Esq. and Morgan Legal Group design trust-based plans for clients throughout New York State. Schedule a 30-minute consultation to map your problem to the right solution.
Further reading from Morgan Legal Group: how trusts fit an estate plan.