Mr. Goodwin is everything you want in an attorney: professional, honest, thorough, and genuinely caring. He always explains things clearly, so I understood exactly what was happening and what to expect next. His attention to detail and persistence really stood out. Looking back, I feel lucky to have found him. He guided me through the whole process expertly, and I deeply appreciate all his hard work. Would definitely recommend him to anyone needing legal help.
Call Today:
212-233-1233
Family Trust Attorney in New York
By Albert Goodwin, Esq. — admitted to practice in New York State. Last updated: June 2024.
A "family trust" is not a single legal product. It is a planning approach in which a New York family uses one or more trusts — most often a revocable living trust or an irrevocable trust — to manage property during life and pass it to the next generation efficiently. The right structure depends on your goals: avoiding Surrogate's Court probate, protecting assets for Medicaid eligibility, reducing New York estate tax, or providing for minor or special-needs beneficiaries.
New York trusts are governed primarily by the Estates, Powers and Trusts Law (EPTL) and administered under the Surrogate's Court Procedure Act (SCPA). This page explains, in plain English, how these trusts work under New York law and how our office can help. It focuses on planning and drafting; if you are dealing with a dispute over an existing trust, see our pages on breach of trust and trust accountings.
What Makes a Trust Valid in New York
Under EPTL § 7-1.17, a lifetime (inter vivos) trust in New York must be in writing and executed by the person creating it (the grantor). The grantor's signature must be acknowledged before a notary public, or witnessed by two people who also sign the instrument. A trustee who is not the sole grantor must also sign and have that signature acknowledged or witnessed. These execution formalities matter — a trust that is not properly signed and acknowledged can be challenged or held invalid.
A trust is only as good as its funding. Creating the document is not enough; assets must actually be re-titled into the name of the trust. An unfunded trust accomplishes nothing, which is one of the most common and costly mistakes we see.
Revocable Living Trust vs. Irrevocable Trust in New York
The two most common family trusts serve very different purposes. A revocable trust keeps you in full control but offers little asset protection. An irrevocable trust gives up control in exchange for protection from creditors, Medicaid spend-down, and estate taxes.
| Feature | Revocable Living Trust | Irrevocable Trust |
|---|---|---|
| Can you change or cancel it? | Yes, any time during your life | No (generally — limited amendment via EPTL § 7-1.9 with all beneficiaries' consent) |
| Avoids probate? | Yes, if funded | Yes, if funded |
| Protects assets from your creditors? | No — assets are still treated as yours | Yes, if properly drafted and funded |
| Helps with Medicaid eligibility? | No | Yes, subject to the look-back period |
| Removes assets from your taxable estate? | No | Often, depending on terms |
| Who controls the assets? | You, as grantor and usually trustee | An independent trustee; you generally cannot be trustee |
Because New York law treats assets in a revocable trust as still belonging to the grantor, a revocable trust will not shield property from creditors, lawsuits, or Medicaid. It is, however, an excellent probate-avoidance and incapacity-planning tool. Only a properly drafted and funded irrevocable trust provides genuine asset protection.
Avoiding Probate Through a Trust
Property titled in a funded trust passes directly to your beneficiaries under the trust terms, without a probate proceeding in the New York Surrogate's Court. This can save time and expense, keep your affairs private (probated wills become public record, while trusts generally do not), and avoid ancillary probate when you own real estate in more than one state. For an overview of the alternative, see how to avoid probate in New York and our sample NYC probate timeline.
Medicaid Asset Protection Trusts in New York
One of the most common reasons New York families create an irrevocable trust is to protect a home and savings while preserving eligibility for Medicaid long-term care. New York imposes a five-year (60-month) look-back period for institutional (nursing home) Medicaid, meaning transfers into an irrevocable trust made within five years of applying can trigger a penalty period. New York has historically not applied a look-back to Community Medicaid (home care), though a 30-month look-back for community-based services has been enacted and its implementation has been repeatedly delayed — making timing and current rules critical to review with counsel before transferring assets.
A Medicaid Asset Protection Trust must be irrevocable, and the grantor typically retains the right to income (and to live in a transferred home) but not the principal. For details, see using a Medicaid trust to qualify. Eligibility figures change annually; confirm current limits with the New York State Department of Health.
New York Estate Tax Planning
New York imposes its own estate tax, separate from the federal estate tax, with its own exemption that is adjusted annually. New York's most important quirk is the so-called "estate tax cliff": if a taxable estate exceeds the exemption by more than 5%, the entire estate — not just the excess — becomes subject to New York estate tax. This makes careful planning essential for estates near the threshold. Trusts can help, including:
- Credit shelter (bypass) trusts to use both spouses' exemptions.
- QTIP trusts to defer tax while controlling where assets ultimately pass.
- Irrevocable Life Insurance Trusts (ILITs) to keep policy proceeds out of the taxable estate (the insured generally cannot be the trustee, and transfers of an existing policy are subject to a three-year rule).
Advanced techniques such as GRATs, charitable remainder and charitable lead trusts, and grantor trusts are discussed in detail on our advanced New York estate planning page. Always verify current exemption amounts with the New York State Department of Taxation and Finance.
Protecting Beneficiaries — Children, Grandchildren, and In-Laws
A family trust lets you decide how and when beneficiaries receive their inheritance rather than handing it over outright. Common goals include:
- Staggered distributions for young adults — for example, portions at ages 25, 30, and 35.
- Management for minors, who cannot legally hold property; without a trust, a guardian must be appointed and the court supervises every distribution.
- Keeping assets within your bloodline by drafting terms that shelter an inheritance from a child's divorce or creditors.
- Continuity of management if you become incapacitated, by naming a successor trustee you trust. See planning for disability.
Special Needs Trusts
If a loved one is disabled and receives means-tested benefits such as Medicaid or SSI, an outright inheritance can disqualify them. A Supplemental (Special) Needs Trust holds funds for their benefit without counting as a resource, allowing them to keep public benefits while the trust pays for supplemental needs. Read more on our dedicated page about the benefits of a special needs trust.
Choosing the Right Trustee
The trustee controls and administers the trust and owes fiduciary duties to the beneficiaries. You may name a trusted family member, a professional, or a bank. Each option has trade-offs in cost, expertise, and impartiality — see our discussion of using a bank as trustee. Choosing the wrong trustee is a frequent source of later conflict.
Frequently Asked Questions
Do I still need a will if I have a trust?
Yes. We almost always pair a trust with a "pour-over" will so that any assets you forgot to transfer into the trust are captured at death. A will is also where you name a guardian for minor children.
Are trusts public record in New York?
Generally no. Unlike a probated will, a trust is a private document that is not filed with the Surrogate's Court. See are trusts public record.
What can and cannot go into a trust?
Most real estate, bank accounts, and investment accounts can be retitled into a trust, but some assets (such as retirement accounts) should not be. See assets that can and cannot go into a revocable trust.
How long is the New York Medicaid look-back?
Five years for nursing-home Medicaid. The community (home care) look-back rule has been enacted but its start date has been repeatedly postponed — confirm the current status before transferring assets.
Can an irrevocable trust ever be changed?
Sometimes. EPTL § 7-1.9 allows revocation or amendment of an irrevocable lifetime trust if the grantor and all persons beneficially interested consent in writing. New York also recognizes limited "decanting" under EPTL § 10-6.6.
Speak With a New York Family Trust Attorney
Albert Goodwin, Esq. is a New York estate planning attorney who helps families throughout New York City — New York County (Manhattan), Kings County (Brooklyn), Bronx County, Queens County, and Richmond County (Staten Island) — as well as Nassau, Suffolk, and Westchester Counties, design trusts tailored to their goals under New York law.
To discuss whether a revocable, irrevocable, Medicaid, or special needs trust fits your situation, call (212) 233-1233 to schedule a consultation. Learn more about Albert Goodwin.
This page is general legal information about New York law, not legal advice, and does not create an attorney-client relationship. Statutory references and figures change; consult an attorney about your specific circumstances.
About the Author
Albert Goodwin Esq. is a licensed New York attorney with over 18 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
