Protecting Your Assets With a Trust in New York

You protect your assets with a trust in New York by transferring ownership of selected property into a legally created trust, governed by the New York Estates, Powers and Trusts Law (EPTL) Article 7, so that those assets are managed by a trustee under clear rules instead of passing through the public Surrogate’s Court process. Depending on which type of trust you choose, a properly drafted New York trust can keep your estate out of probate, protect your privacy, shield assets from long-term-care costs through Medicaid planning, reduce estate tax exposure, and provide for a loved one with disabilities without disrupting their benefits. Because New Yorkers ask the same handful of questions again and again, the rest of this article is organized as a question-and-answer guide to the concerns we hear most often.

What Does It Actually Mean to “Protect” Assets With a Trust?

A trust is a legal arrangement in which you (the grantor) transfer assets to a trustee, who holds and manages them for the people you name (the beneficiaries). Once an asset is titled in the name of the trust, it is governed by the trust document and by EPTL Article 7 — not by the default rules that apply to property you own outright.

“Protection” can mean several different things, and choosing the wrong trust for your goal is the most common mistake we see:

• Protection from probate and publicity — keeping your affairs private and out of the Surrogate’s Court.
• Protection from incapacity — making sure someone can manage your assets if you can no longer do so.
• Protection from creditors and long-term-care costs — shielding assets from future claims, including Medicaid spend-down.
• Protection from estate tax — removing assets from your taxable estate.
• Protection of a vulnerable beneficiary — providing for a disabled loved one without ending their public benefits.

No single trust does all of these things at once. Learn more on our trusts overview page.

Which Type of Trust Protects My Assets in New York?

The right trust depends entirely on your goal. Here is how the main options compare.

Trust Type	Can You Change It?	Main Protection	Saves NY Estate Tax?	Medicaid / 5-Year Look-Back
Revocable living trust	Yes — amend or revoke anytime	Avoids probate, privacy, incapacity management	No — assets stay in your taxable estate	No protection (assets still “available”)
Irrevocable trust	Generally no	Asset protection, estate-tax reduction, Medicaid eligibility	Yes (if properly structured)	Subject to the 5-year look-back
Supplemental / special needs trust	Depends on type	Preserves means-tested benefits for a disabled beneficiary	Varies	Designed to protect Medicaid/SSI

The Revocable Living Trust

A revocable living trust lets you keep complete control. You can amend it, revoke it, move assets in and out, and serve as your own trustee. Its primary benefits are avoiding probate, privacy, and incapacity management — if you become unable to manage your affairs, your named successor trustee steps in without a court guardianship proceeding. The important caveat: because you retain full control, a revocable trust does not save estate tax. The assets remain part of your taxable estate.

The Irrevocable Trust

An irrevocable trust generally cannot be amended once created. In exchange for giving up control, you gain the ability to remove assets from your taxable estate, achieve asset protection, and engage in Medicaid planning. The trade-off New Yorkers must understand is the five-year look-back: transfers into an irrevocable trust are scrutinized for the 60 months before a Medicaid application, so timing matters enormously.

The Supplemental (Special) Needs Trust

A special needs trust, authorized under EPTL 7-1.12, holds assets for a beneficiary with a disability without disqualifying them from means-tested benefits like Medicaid and SSI. The trustee may pay for supplemental quality-of-life needs while the beneficiary keeps the public benefits they rely on.

Does a Trust Really Avoid the Surrogate’s Court?

Yes — and this is one of the strongest reasons New Yorkers create trusts. A will must be probated in the Surrogate’s Court, which makes its contents a matter of public record and subjects your estate to a court-supervised process that can take months. A trust avoids probate for the assets it holds and keeps those arrangements private. The catch is that the protection only applies to assets you actually retitle into the trust — an unfunded trust protects nothing. See our trust vs. will comparison for a fuller breakdown.

Will a Trust Lower My New York Estate Tax?

It depends on the trust. New York imposes its own estate tax with a feature that catches many families off guard:

• 2026 basic exclusion amount: $7,350,000. Estates at or below this generally owe no New York estate tax.
• The “cliff” at 105% of the exclusion: $7,717,500. If your taxable estate exceeds the cliff, you lose the entire exemption — not just the amount above the threshold — and tax is calculated on the whole estate.

A revocable trust does nothing to reduce this exposure, because those assets stay in your taxable estate. An irrevocable trust, properly structured, can move assets out of your taxable estate and help keep you under the cliff. If your estate is anywhere near $7.35M–$7.72M, this planning is urgent.

What Are My Trustee’s Responsibilities?

Whoever you name as trustee owes serious fiduciary duties under New York law:

• Prudent-investor standard — the trustee must invest and manage trust assets prudently, under EPTL Article 11-A.
• Duty of loyalty — the trustee must act in the beneficiaries’ interest, not for personal gain.
• Duty to account — the trustee must keep records and provide an accounting to the beneficiaries.

Choosing the right trustee, and making sure they understand these obligations, is as important as choosing the right trust. Our trust administration team helps trustees meet these duties correctly. New York’s SCPA and EPTL set out the commission schedules that govern trustee compensation, so fees are not arbitrary.

Frequently Asked Questions

Q: Can I be the trustee of my own trust?
A: Yes — with a revocable living trust you can serve as your own trustee and keep full control during your lifetime, then name a successor trustee to take over at incapacity or death. With most irrevocable trusts, you typically give up that level of control to achieve tax and asset-protection benefits.

Q: How does the five-year look-back work for Medicaid?
A: When you apply for Medicaid long-term-care coverage, New York reviews asset transfers made within the prior 60 months. Transfers into an irrevocable trust during that window can trigger a penalty period, which is why Medicaid trusts should be funded as early as possible.

Q: Does a revocable trust protect my assets from creditors or nursing-home costs?
A: No. Because you retain control over a revocable trust, the assets are still considered available to you — and therefore reachable by creditors and counted for Medicaid. Asset protection from these claims generally requires an irrevocable trust.

Q: Do I still need a will if I have a trust?
A: Usually yes. Most plans pair a trust with a “pour-over” will to catch any assets that were never retitled into the trust, and to address matters a trust cannot, such as naming a guardian for minor children.

Speak With a New York Trust Attorney

The right trust can keep your estate private, out of the Surrogate’s Court, protected from long-term-care costs, and under New York’s estate-tax cliff — but only when it is matched precisely to your goals and funded correctly. At Morgan Legal Group, Russel Morgan, Esq. and our team design trust plans for families across New York State.

Schedule a consultation: https://calendly.com/russel-morgan/30min