New York Trust Attorney: Flat-Fee Revocable, Medicaid, and Special Needs Trusts

Which Trust Matches Your Goal

Clients rarely come in asking for a particular trust. They come in with a problem. The problem determines the document.

• Avoid probate and plan for incapacity: a revocable living trust with a pour-over will. You stay in control. It gives no creditor or Medicaid protection, because under EPTL 7-3.1 a trust you can revoke is void as against your creditors.
• Protect the house and savings from nursing home costs: an irrevocable income-only Medicaid asset protection trust, funded at least 60 months before you expect to apply for institutional Medicaid.
• Provide for a disabled child or sibling on SSI or Medicaid: a third-party supplemental needs trust under EPTL 7-1.12, or a first-party payback trust if the money already belongs to the beneficiary.
• Keep the estate under the New York exclusion: a credit shelter trust for married couples, an irrevocable life insurance trust (ILIT), or lifetime gifting. GRATs, IDGTs, and other tax-driven designs are on our advanced New York estate planning page.
• Control how a beneficiary receives money: a discretionary trust with staggered distribution ages, a spendthrift clause (income interests are already protected under EPTL 7-1.5), or a lifetime trust for a beneficiary with a creditor, a divorce, or an addiction problem.

Every lifetime trust we prepare is executed under EPTL 7-1.17: in writing, signed by the grantor and at least one trustee, and either acknowledged before a notary in the manner of a deed or signed in front of two witnesses who also sign. We supervise the signing. A trust that fails this formality can be challenged years later, when the grantor is no longer available to fix it.

What We Charge

We quote trust work as a flat fee after the first consultation, in writing, before you commit. The fee depends on how many assets need to be re-titled, whether real property is involved, and whether the plan needs a tax-driven design. As a general guide for our New York clients:

• Revocable living trust package: the trust, a pour-over will, a durable power of attorney, a health care proxy, and a living will. Funding of one residence and ordinary bank and brokerage accounts is included. Additional parcels of real property, cooperative apartments, and out-of-state property add to the fee because each requires its own deed, transfer forms, or board approval.
• Medicaid asset protection trust: the irrevocable trust, deed to the trustee with retained life estate, the transfer tax filings, coordination with your accountant on the grantor trust election, and a written timeline showing when the 60-month look-back clears. This package costs more than a revocable trust because the drafting choices affect eligibility, capital gains, and property tax exemptions, and each one has to be deliberate.
• Supplemental needs trust: a stand-alone third-party SNT, or an SNT built into your will or revocable trust. First-party payback trusts cost more because they require Medicaid payback language that satisfies 42 U.S.C. § 1396p(d)(4)(A) and, where a court is involved, approval of the trust terms.

Recording fees, the New York State and New York City real property transfer tax filings (TP-584 and NYC RPT, usually at zero tax for a transfer to your own trust), and any title company charges are billed at cost. We do not charge hourly for routine funding questions after the trust is signed.

How We Fund the Trust

An unfunded trust is a stack of paper. Most of the trusts that end up in Surrogate's Court anyway were signed and then never funded, so the assets passed by will or by intestacy. Our funding work follows a checklist:

1. Schedule A: we prepare and attach a schedule listing every asset transferred into the trust, and we update it when you add property later.
2. Real property: a new deed from you to the trustee, recorded with the county clerk or, in the five boroughs, through ACRIS, with the RP-5217 and TP-584 forms. A transfer of your home to a revocable trust in which you remain the beneficiary and occupant does not trigger the mortgage due-on-sale clause under the Garn-St Germain Act, 12 U.S.C. § 1701j-3(d)(8). We still notify the lender and the title insurer and, where available, obtain a title endorsement naming the trustee.
3. Cooperative apartments: a co-op is personal property, not real property. The shares and proprietary lease are assigned to the trustee, and the board must consent. Some boards refuse trusts, and some require a personal guaranty from the beneficiary. We review the proprietary lease before quoting the fee.
4. Bank and brokerage accounts: re-titled into the name of the trustee using the trust's tax identification number (your Social Security number, for a revocable or grantor trust). Where a bank resists, we use the bank's trust certification form or a certification of trust under EPTL 7-1.18 instead of handing over the full instrument.
5. Retirement accounts: never re-titled. Moving an IRA or 401(k) into a trust during life is a taxable distribution. We update the beneficiary designation instead, and if a trust is to be the beneficiary we draft it to qualify for the stretch rules that survive the SECURE Act.
6. Life insurance: the trust is named as beneficiary, or for an ILIT the policy is assigned to the trustee outright.
7. Beneficiary designations and TOD registrations: we reconcile every Totten trust account (EPTL 7-5.1), transfer-on-death securities registration (EPTL 13-4), and, since 2024, any transfer on death deed under Real Property Law § 424 so that none of them conflicts with the trust. A designation on an account overrides the trust and the will.
8. Tangible property and business interests: an assignment of tangible personal property, and for an LLC or closely held corporation, an assignment of the membership interest or shares with any consent the operating agreement requires.

Choosing Your Trustee

The trustee holds legal title and makes the decisions. The choice matters more than most of the drafting.

• Revocable trust: you serve as your own trustee. The important choice is the successor who takes over at incapacity or death. Name an alternate as well.
• Medicaid asset protection trust: you cannot be the trustee, and your spouse should not be. Most clients name one or two adult children. The trustee must understand that principal can never be distributed back to you, even in an emergency, or the protection fails.
• Supplemental needs trust: the trustee must know what the beneficiary's benefits program counts as income. Paying rent directly, for example, can reduce SSI. A sibling with a corporate co-trustee or a professional advisor is a common pairing.
• Co-trustees: two children as co-trustees forces agreement on every account and deed. We usually recommend one trustee with a named successor rather than co-trustees, unless the family specifically wants the check on each other.
• Corporate trustee: a bank or trust company brings continuity and recordkeeping and charges a published annual fee. See using a bank as trustee for the trade-offs.
• Out-of-state trustees: New York permits a non-resident individual trustee of a lifetime trust. A trustee outside New York can, however, move the trust's income tax residence, which may be an advantage or a problem depending on the state.

Every trustee is bound by the Prudent Investor Act, EPTL 11-2.3, and is entitled to statutory commissions under SCPA 2309 unless the instrument says otherwise. We draft a compensation clause so the family does not argue about it later.

The Income-Only Medicaid Trust: How It Is Built

The Medicaid asset protection trust we draft is irrevocable, and you keep three things: the right to all income the trust earns, the right to live in the house for life, and a limited power to change who inherits among your descendants. You give up one thing: any right to the principal.

Those retained rights are chosen for tax reasons as well as Medicaid reasons. Because you keep the income and a power of appointment, the trust is a grantor trust for income tax purposes and the assets stay in your taxable estate under Internal Revenue Code §§ 2036 and 2038. That sounds like a drawback, but it is the point: the house gets a stepped-up basis at your death under IRC § 1014, so your children do not pay capital gains on decades of appreciation. The retained residence right also preserves the STAR and senior citizen property tax exemptions and the $250,000/$500,000 home sale exclusion under IRC § 121 if the trustee sells during your life.

The look-back works like this. For nursing home (institutional) Medicaid, New York examines every transfer made in the 60 months before the application, Social Services Law § 366(5)(e). Transfers for less than fair value within that window create a penalty period, calculated by dividing the amount transferred by the regional nursing home rate the Department of Health publishes each year. Using a New York City rate in the range of $15,000 per month, a $300,000 transfer into the trust produces a penalty of about 20 months. The penalty does not begin to run until you are in a nursing home, have applied, and would otherwise be eligible, so a transfer made 40 months before the application does not get a 20-month credit; the full penalty runs from the application date. Once 60 months have passed since funding, the transfer is not examined at all.

Community (home care) Medicaid has had no look-back in New York. The 2020 state budget enacted a 30-month look-back for community Medicaid, and its implementation has been postponed several times. We confirm the status at the time you plan rather than assume either way. For the eligibility rules in detail, see our page on using a Medicaid trust to qualify.

The New York Estate Tax Cliff, With Numbers

For deaths in 2025, the New York basic exclusion amount is $7,160,000. The federal exclusion is $13,990,000, so a New Yorker can owe state estate tax with no federal tax at all.

New York does not phase out the exclusion gradually. Under Tax Law § 952(c), if the taxable estate exceeds the exclusion by more than 5 percent, the exclusion disappears and tax is computed on the entire estate from the first dollar. For 2025 the cliff sits at $7,518,000.

• A taxable estate of $7,100,000 owes no New York estate tax.
• A taxable estate of $7,600,000 is over the cliff. Tax is computed on the full $7,600,000 under the rate table in Tax Law § 952(b), roughly $719,000.

Going $500,000 over the line costs the family about $719,000. The planning answer for an estate near the threshold is usually one of the following: a credit shelter trust so a married couple uses both exclusions rather than one, charitable gifts under the will sized to bring the estate back under the cliff (a so-called Santa Clause provision), lifetime gifts, or an ILIT so the insurance proceeds are not counted. Note that New York adds back gifts made within three years of death under Tax Law § 954(a)(3); the sunset date for that rule has been extended more than once, and we check it when we design the gifts.

Changing an Irrevocable Trust: Decanting Under EPTL 10-6.6

Irrevocable does not mean frozen. New York was the first state with a decanting statute, EPTL 10-6.6. A trustee with authority to invade principal can appoint the assets to a new trust with updated terms. If the trustee's discretion over principal is unlimited, the new trust can change nearly any administrative or dispositive term, as long as it benefits only the existing beneficiaries. If the trustee's discretion is limited (an ascertainable standard such as health, education, maintenance and support), the new trust must keep the same beneficiaries and the same standard.

We use decanting to add supplemental needs provisions when a beneficiary becomes disabled after the trust was signed, to change the trustee succession, to extend distribution ages for a beneficiary who is not ready, and to move a trust's situs. The statute requires written notice to the grantor if living and to the persons interested in the trust, and the decanting takes effect 30 days after service unless everyone entitled to notice consents in writing sooner. A trustee cannot use decanting to reduce a fixed income interest or to extend the trust beyond the perpetuities period.

Where decanting does not fit, EPTL 7-1.9 allows the grantor to amend or revoke an irrevocable trust with the written, acknowledged consent of everyone beneficially interested. That route is only available while the grantor is alive and competent, and it is one reason we keep the beneficiary class in a Medicaid trust small and adult.

If the Trust Is Challenged

A lifetime trust is not probated, but it is not beyond the court's reach. SCPA Article 15 gives the Surrogate's Court jurisdiction over lifetime trusts, including appointing a successor trustee under SCPA 1502 when the named trustee cannot serve. A beneficiary who is not getting information can bring a proceeding under SCPA 2102 to compel the trustee to supply it, and under SCPA 2205 to compel an accounting. A trustee who mismanages assets can be removed under SCPA 711 and 719. A trust can also be attacked for lack of capacity, undue influence, or failure to comply with EPTL 7-1.17, and the person seeking to uphold it will need the drafting attorney's file and the witnesses. That is why we keep the execution record, a capacity note, and a copy of every funding document for each trust we prepare. For disputes, see breach of fiduciary duty and discovery and turnover proceedings.

Three Illustrative Situations

These are hypotheticals that show how the pieces fit. They are not accounts of specific clients or results.

• A widow in Bay Ridge with a two-family house and $200,000 in savings. She is 74 and healthy. The goal is to protect the house if she needs a nursing home in her 80s. The design: an income-only Medicaid trust holding the house, with her daughter as trustee. She keeps the rental income and the right to live in her unit. Most of the savings stay outside the trust so she has money she controls. The 60-month clock starts when the deed is recorded. Her pour-over will handles anything left outside the trust.
• A married couple in Scarsdale with a $9 million combined estate. Each spouse's will leaves everything to the other. On the second death, the estate is over the cliff and the entire $9 million is taxed. The design: each will creates a credit shelter trust funded up to the New York exclusion at the first death, with the survivor as income beneficiary, and a portability election on the federal return. The second estate drops below the cliff.
• Parents in Forest Hills with an adult son receiving SSI and Medicaid. Their wills leave him one-third outright, which would end his benefits the month the estate is distributed. The design: a third-party supplemental needs trust under EPTL 7-1.12, named in the parents' revocable trust and in the beneficiary designation on their IRAs, with the son's sister as trustee and a professional advisor as successor. No payback to Medicaid at the son's death, because the money never belonged to him.

Questions Clients Ask Before Hiring Us

Can I use one trust for both probate avoidance and Medicaid protection?

No. A trust you can revoke is countable for Medicaid and reachable by creditors. Clients who want both usually keep a revocable trust for the assets they need to control and a separate irrevocable trust for the house and the money they can set aside.

Do I lose my STAR exemption or my capital gains exclusion if I put my house in a Medicaid trust?

Not if the trust is drafted with a retained right of occupancy and as a grantor trust. The assessor treats you as the owner for exemption purposes, and the IRS treats you as the owner for the § 121 exclusion.

What if my child, the trustee, divorces or is sued?

The trustee holds the assets as a fiduciary, not as an owner. They are not marital property of the trustee and are not reachable by the trustee's creditors. A spendthrift clause separately protects the beneficiaries' interests.

How long does it take?

A revocable trust package is usually signed within two to three weeks of the consultation. Funding takes another few weeks, mostly waiting on banks and the recording office. A Medicaid trust follows the same drafting timeline, and the deed recording date is the date that matters for the look-back.

Do I need to tell my beneficiaries about the trust now?

Not for a revocable trust. For an irrevocable trust, the trustee has duties to the beneficiaries from the start, including a duty to inform on request, so we recommend the trustee at least know the trust exists and where the documents are. See are trusts public record for what is and is not disclosed.

Speak With a New York Trust Attorney

Albert Goodwin, Esq. prepares and funds trusts for clients in Manhattan, Brooklyn, Queens, the Bronx, and Staten Island, and in Nassau, Suffolk, and Westchester counties, and represents trustees and beneficiaries in the Surrogate's Courts of those counties. To get a written flat-fee quote for a revocable, Medicaid, or supplemental needs trust, call (212) 233-1233 or use the contact form on this site. Related service pages: wills, advance directives, avoiding probate in New York, and our Brooklyn estate practice.

This page is general information, not legal advice. Exclusion amounts, regional Medicaid rates, and look-back rules change each year and the outcome depends on your facts. Last reviewed by Albert Goodwin, Esq. against the EPTL, SCPA, Social Services Law, and Tax Law figures in effect for 2025.