New York Trusts FAQ: 2026 Answers & Your Next Steps

If you are weighing whether to set up a trust in New York, you likely have a short list of practical questions — and you want clear, actionable answers, not legalese. This FAQ is built as a checklist you can work through: each answer ends with a concrete next step so you know exactly what to do. It covers revocable and irrevocable trusts, special needs planning, the 2026 New York estate tax, and trustee duties under the New York Estates, Powers and Trusts Law (EPTL) Article 7.

Morgan Legal Group serves clients statewide — New York City, Long Island, Westchester, the Hudson Valley, and Upstate. When you’re ready to map your own plan, you can book a 30-minute consultation with attorney Russel Morgan, Esq.

Quick-reference: which trust does what?

Goal	Best fit	Key trade-off
Avoid probate & keep affairs private	Revocable living trust	Does not reduce estate tax
Reduce estate tax / protect assets	Irrevocable trust	Generally cannot be changed
Qualify for Medicaid long-term care	Irrevocable trust	5-year look-back applies
Protect a disabled loved one’s benefits	Special needs trust	Strict spending rules (EPTL 7-1.12)
Manage assets if you become incapacitated	Revocable living trust	Requires funding the trust now

Next step: Identify your single most important goal from the column above before your consultation — it determines which trust we build first.

Trust basics

What is a trust, and how is it governed in New York?

A trust is a legal arrangement in which a grantor transfers assets to a trustee, who manages them for beneficiaries under written instructions. New York trusts are governed by the Estates, Powers and Trusts Law (EPTL) Article 7. Whether the trust is revocable or irrevocable shapes nearly every other answer on this page. Start with our trusts overview to see how the pieces fit together.

Next step: List the assets you’d want a trust to hold (home, accounts, business interest) — funding is what makes a trust work.

What’s the difference between a revocable and an irrevocable trust?

A revocable living trust lets you keep full control: you can amend or revoke it during your lifetime. Its primary benefits are avoiding probate, privacy, and incapacity management. Importantly, it does not save estate tax — those assets remain in your taxable estate.

An irrevocable trust generally cannot be amended once created. People accept that rigidity in exchange for powerful benefits: estate-tax reduction, asset protection, and Medicaid planning.

Next step: Decide whether control (revocable) or protection (irrevocable) matters more to you — see revocable vs. irrevocable side by side.

Do I need a trust if I already have a will?

A trust and a will do different jobs. A trust avoids probate and is private; a will is a public document that must be probated in the Surrogate’s Court. Many New Yorkers use both — a trust for the core estate and a “pour-over” will as a backstop. Our trust vs. will page walks through how they work together.

Next step: Locate your current will and note its date — anything signed before a major life change usually needs a review.

Taxes and Medicaid

What is the New York estate tax in 2026?

For 2026, New York’s basic exclusion amount is $7,350,000. New York also has a notorious “cliff.” If your taxable estate exceeds 105% of the exclusion — $7,717,500 — you lose the entire exemption, and the whole estate becomes taxable, not just the excess.

2026 NY estate tax figure	Amount
Basic exclusion amount	$7,350,000
Cliff threshold (105%)	$7,717,500
Result above the cliff	Entire estate taxable

Next step: Add up your gross assets (including life insurance and real estate). If you’re anywhere near $7M, the cliff makes irrevocable-trust planning urgent.

Can a trust lower my estate tax?

Only the right kind. A revocable trust does not reduce estate tax — the assets stay in your taxable estate. To remove value from your taxable estate, you generally need an irrevocable trust, which can move appreciating assets (and their future growth) outside the estate. Given the New York cliff, this is one of the most common reasons clients near the threshold call us.

Next step: Calculate how far your estate sits above $7,717,500, if at all — that gap is what irrevocable planning targets.

How do irrevocable trusts work for Medicaid in New York?

An irrevocable trust can help you qualify for Medicaid long-term care by removing assets from your countable resources — but it is subject to the five-year look-back. Transfers made within five years of applying can trigger a penalty period, so timing is everything. The best move is to plan before a health crisis, not during one.

Next step: Note the date of any large gift or transfer in the last five years before applying — and start the irrevocable-trust clock as early as possible.

Special situations

How do I protect a disabled family member without losing their benefits?

Use a Supplemental (Special) Needs Trust (SNT) under EPTL 7-1.12. An SNT lets you set aside funds for a beneficiary with disabilities while preserving means-tested benefits like Medicaid and SSI, because trust assets aren’t counted as the beneficiary’s own. Distributions must follow strict rules so they supplement — not replace — those benefits. See our special needs trust page for details.

Next step: Confirm whether your loved one currently receives or may need Medicaid/SSI — that determines whether an SNT belongs in your plan.

What are a New York trustee’s duties — and how are trustees paid?

A trustee is a fiduciary. Core duties include the prudent-investor standard (EPTL Article 11-A), a duty of loyalty (acting solely in beneficiaries’ interests), and a duty to account to beneficiaries. Trustees are entitled to commissions; New York sets these out through SCPA/EPTL commission schedules rather than letting trustees set their own fee.

Next step: Choose a trustee you trust to follow these duties — and ask us about co-trustees or a corporate trustee if no single person fits. Our trust administration page explains the role.

My trust is already signed — is anything left to do?

Often, yes. The most common mistake is a trust that is signed but never funded — meaning assets were never retitled into it. An unfunded trust can’t avoid probate. Beyond funding, trustees must administer the trust, keep records, and account to beneficiaries. If you’ve inherited a trustee role, trust administration support keeps you compliant with EPTL duties.

Next step: Pull the deeds and account statements for assets the trust was meant to hold and confirm each is titled in the trust’s name.

Your next move

Use this page as a checklist: pick your top goal, run the numbers against the 2026 cliff, gather your documents, and identify your trustee. Then bring those answers to a strategy session so we can build — or fix — your plan efficiently.

Schedule your 30-minute consultation with Russel Morgan, Esq. — Morgan Legal Group serves clients across New York State.

This FAQ is general information, not legal advice. New York estate-tax figures and statutes change; verify current figures at tax.ny.gov and review the EPTL at nysenate.gov.