Revocable Living Trust Attorney New York

What Is a Revocable Living Trust Under New York Law?

A revocable living trust is a legal arrangement created during your lifetime in which you, as the grantor, transfer ownership of assets into a trust that you continue to control. New York's Estates, Powers and Trusts Law (EPTL) governs how these trusts are created, administered, and amended. As the name suggests, the trust is revocable, meaning you retain the power to modify or terminate it at any time during your life, as long as you remain mentally competent.

In a typical New York revocable living trust, the same person serves three roles:

• Grantor (Settlor): The individual who creates the trust and transfers assets into it.
• Trustee: The person who manages the trust assets, usually you, during your lifetime.
• Beneficiary: The person who benefits from the trust — also you, while living, with successor beneficiaries named for after your death.

Upon your death or incapacity, a successor trustee you have named takes over and administers or distributes the trust assets according to your written instructions.

Key Benefits of a Revocable Living Trust in New York

• Avoiding New York Probate

  Probate in New York can be lengthy, expensive, and public. The Surrogate's Court process often takes many months — and sometimes years if a will is contested. Filing fees in New York are based on the size of the estate and can be substantial for larger estates. Assets properly titled in a revocable living trust pass directly to your named beneficiaries without court involvement, saving time, money, and stress for your family.

• Privacy Protection

  A New York will admitted to probate becomes a public record. Anyone can review the inventory of your assets and the identities of your beneficiaries. A revocable living trust is a private document, and its terms generally remain confidential — an important consideration for high-net-worth individuals, business owners, and families with complex personal circumstances.

• Planning for Incapacity

  If you become incapacitated without a trust, your loved ones may need to seek a guardianship under Article 81 of the New York Mental Hygiene Law — a court-supervised proceeding that is costly, time-consuming, and intrusive. A revocable living trust smoothly empowers your successor trustee to manage your financial affairs without court intervention.

• Simplified Management of Out-of-State Property

  If you own real estate outside New York, your estate may otherwise face ancillary probate in each jurisdiction where property is located. Holding that real estate in a revocable living trust avoids ancillary probate altogether.

• Flexibility and Control

  You can amend your trust at any time to add or remove beneficiaries, change distribution terms, name new trustees, or restructure the plan as your circumstances evolve.

Revocable Living Trust vs. Last Will and Testament

For many New Yorkers, the most effective estate plan combines both documents — a revocable living trust as the primary vehicle, supported by a "pour-over" will that captures any assets inadvertently left outside the trust.

Funding the Trust: A Critical Step

A revocable living trust only avoids probate for assets that have actually been transferred into it. This process — called funding the trust: is where many do-it-yourself plans fail. Our attorneys assist with retitling and properly aligning assets, including:

1. 1Real estate, including the preparation and recording of new deeds with the appropriate county clerk
2. 2Cooperative apartment shares, which require the cooperation and consent of the co-op board
3. 3Bank, brokerage, and investment accounts
4. 4Closely held business interests, LLC memberships, and partnership interests
5. 5Beneficiary designations on life insurance and retirement accounts (where appropriate)
6. 6Personal property, intellectual property, and valuable collectibles

New York co-op transfers in particular require careful handling, as boards often impose specific requirements before approving the transfer of shares into a trust.

New York Estate Tax Considerations

While a revocable living trust does not by itself reduce estate taxes, it can be drafted to incorporate sophisticated tax planning strategies. New York imposes its own estate tax with a "cliff" provision: estates that exceed the New York basic exclusion amount by more than 5% lose the exclusion entirely and are taxed on the full value of the estate. For married couples, our attorneys can build credit shelter (bypass) provisions and disclaimer planning into the trust framework to maximize both spouses' exclusions and minimize state and federal estate tax exposure.

Who Should Consider a Revocable Living Trust?

A revocable living trust is not necessary for every New Yorker, but it can be particularly valuable if you:

• Own real estate, especially multiple properties or property outside New York
• Have significant financial assets you wish to keep private
• Want to plan for the possibility of future incapacity
• Have minor children, blended families, or beneficiaries with special needs
• Own a business and want to provide for continuity of management
• Wish to spare your family the burden, delay, and cost of Surrogate's Court
• Value privacy and discretion in your estate plan

Our New York Trust Drafting Process

We guide clients through a thorough, customized process:

1. 1Initial Consultation: We discuss your family situation, assets, goals, and concerns.
2. 2Plan Design: We recommend a structure for your circumstances, integrating the trust with wills, powers of attorney, health care proxies, and living wills.
3. 3Drafting: We prepare your trust agreement and supporting documents in compliance with New York law.
4. 4Execution: We oversee proper signing and notarization to ensure validity.
5. 5Funding: We assist with retitling assets, preparing deeds, and coordinating with financial institutions and co-op boards.
6. 6Ongoing Review: We recommend periodic reviews as your family, finances, and the law evolve.

Schedule a Consultation With a New York Trust Attorney

Estate planning is one of the most important steps you can take to protect your family and your legacy. Our New York revocable living trust attorneys combine technical legal knowledge with thoughtful, personal guidance. We invite you to contact our office to schedule a confidential consultation and learn how a revocable living trust can fit into a comprehensive plan built around your goals under New York law.

You can contact us by phone at 212-233-1233 or by email at [email protected].

What a Revocable Living Trust Cannot Do

A quick note on terminology: a "living trust" and a "revocable trust" are, in most cases, the same thing. A living (inter vivos) trust is simply one created during your lifetime, and most are drafted to be revocable. The distinction that actually matters under New York law is between revocable and irrevocable trusts, because a revocable trust has important limits:

• No Medicaid asset protection. Because you retain full control, assets in a revocable trust remain countable for Medicaid eligibility purposes. New Yorkers seeking protection from nursing-home costs generally need an irrevocable Medicaid Asset Protection Trust (MAPT), and New York Medicaid imposes a five-year look-back on transfers for institutional care — so assets are generally protected only once five years have passed from the transfer. New York has historically not applied a look-back to community-based (home-care) Medicaid, though a community look-back has been authorized and repeatedly delayed; current rules should be confirmed before transferring assets.
• No creditor protection. Assets you can revoke and reclaim remain reachable by your creditors during your lifetime.
• No estate tax reduction by itself. Revocable trust assets are fully included in your gross estate. Reducing New York or federal estate tax exposure requires irrevocable structures such as lifetime gifting strategies, SLATs, ILITs, or credit shelter planning built into the trust framework.

A revocable trust trades asset protection for flexibility, while an irrevocable trust trades flexibility for protection. Our attorneys can advise which structure, or combination, fits your goals.

Income Tax Treatment of a Revocable Living Trust

During your lifetime, a revocable living trust is a "grantor trust" for income tax purposes and is effectively ignored by the IRS. The trust uses your Social Security Number rather than a separate EIN, all trust income is reported on your personal Form 1040, and no separate trust income tax return is required. Creating and funding the trust does not change how you file your taxes.

At your death, the trust becomes irrevocable and a separate taxpayer. Your successor trustee must obtain an EIN for the trust and file a federal Form 1041 and, where applicable, a New York fiduciary return on Form IT-205 for income earned during administration. Because trust income tax brackets are highly compressed — a trust reaches the top federal bracket at only a few thousand dollars of retained income — trustees often distribute income to beneficiaries to shift it to their lower individual brackets. The successor trustee also has duties such as obtaining date-of-death appraisals, paying debts and expenses, and making distributions according to the trust terms.

Step-Up in Basis: A Key Advantage Preserved

Under Internal Revenue Code § 1014, assets included in a decedent's gross estate receive a "step-up" in income tax basis to fair market value at death, eliminating a lifetime of unrealized capital gain for your heirs. Because revocable trust assets remain in your gross estate, they receive a full step-up in basis at your death — even if no estate tax is owed. This is an important advantage over outright lifetime gifts, which carry over your original, lower basis under IRC § 1015 and can leave your beneficiaries with a substantial built-in capital gain. Certain irrevocable trusts can also be drafted to preserve the step-up while achieving Medicaid or estate tax objectives, but this requires careful, technical drafting — it should never be assumed.

Execution Requirements Under EPTL § 7-1.17

A lifetime trust is not valid in New York unless it satisfies the formalities of Estates, Powers and Trusts Law § 7-1.17. The trust must be in writing and either (1) executed and acknowledged by the grantor — and, unless the grantor is the sole trustee, by at least one trustee — before a notary public in the manner required for recording a deed, or (2) signed by the grantor in the presence of two witnesses who also sign the document. Amendments and revocations must generally be executed with these same formalities. Improper or unwitnessed signing is one of the most common reasons homemade trusts fail, which is why we oversee execution to ensure strict compliance with the statute.

What Happens When the Grantor Dies

At the grantor's death, the revocable trust becomes irrevocable, and the successor trustee takes control of the trust assets under the terms of the trust agreement — without petitioning the Surrogate's Court or obtaining Letters Testamentary. For real property held in the trust, the successor trustee typically records an affidavit of death of trustee, together with a certified copy of the death certificate, in the county where the property is located. In Manhattan, Brooklyn, Queens, and the Bronx, this recording is made with the City Register through ACRIS (the Automated City Register Information System); in Staten Island and counties outside New York City, it is recorded with the County Clerk. This establishes the successor trustee's authority of record and allows administration to proceed far more quickly and privately than probate.

What a Revocable Trust Does Not Do

Because you retain full control over the trust assets, a revocable living trust does not provide creditor protection or income tax savings during your lifetime:

• Income tax: A revocable trust is a "grantor trust" for federal income tax purposes. It uses your Social Security number rather than a separate EIN, and all trust income is reported on your individual income tax return.
• Creditor protection: Assets in a revocable trust remain reachable by your creditors, because you can withdraw them at any time.
• Gift add-back: New York has no separate gift tax, but certain gifts made within three years of death are added back to the estate for New York estate tax purposes — a point we account for in lifetime giving strategies.

If asset protection or Medicaid planning is a goal, an irrevocable trust, which you generally cannot amend and from which you cannot freely retrieve assets — may, depending on its terms, remove assets from creditors' reach and file its own return under its own EIN. The trade-off is the loss of control, and we help clients weigh which structure fits their objectives.