A trust is a legal arrangement in which a grantor transfers assets to a trustee to hold for beneficiaries under written terms. In New York City, the core benefit is probate avoidance: assets titled in a properly funded trust pass to your beneficiaries without going through your borough’s Surrogate’s Court — keeping the transfer private, faster, and outside court fees. For NYC co-op and condo owners, a trust can also smooth the building-board approval that often complicates inheritance.
Grantor: The person who creates a trust and transfers assets into it (also called settlor or trustor). Trustee: The person or institution that legally holds and manages trust assets under a fiduciary duty. Beneficiary: The person entitled to benefit from the trust’s assets. Corpus: The body of assets held in the trust (also called the trust principal or res).
Revocable living trust vs. a will
| Feature | Revocable Living Trust | Will |
|---|---|---|
| Avoids probate | Yes (if funded) | No — goes through Surrogate’s Court |
| Privacy | Private; not filed publicly | Becomes a public court record |
| Control during life | Full — you can amend or revoke | N/A until death |
| Cost | Higher upfront | Lower upfront, court costs later |
| Incapacity planning | Successor trustee steps in | No effect during life |
A revocable living trust does not save estate taxes by itself, but it keeps your NYC apartment out of court and lets a successor trustee manage things if you become incapacitated.
Irrevocable trusts and Medicaid Asset Protection Trusts
An irrevocable trust cannot be freely changed once created, and in exchange the grantor gives up control. That trade-off enables asset protection. A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust used to shield a home or savings from long-term-care costs. New York applies a five-year lookback for nursing-home Medicaid: assets transferred into a MAPT must generally be in place five years before applying. For NYC families whose primary asset is an appreciated apartment, a MAPT planned early can preserve the home for the next generation.
New York trust types at a glance
| Trust type | Revocable? | Common NYC use |
|---|---|---|
| Revocable living trust | Yes | Probate avoidance for a co-op/condo |
| Irrevocable trust | No | Asset protection, estate-tax reduction |
| Medicaid Asset Protection Trust | No | Shield home from long-term-care costs |
| Supplemental Needs Trust (EPTL 7-1.12) | Varies | Provide for a disabled beneficiary without losing benefits |
| Testamentary trust | Created by will | Manage assets for minors after death |
Supplemental Needs Trust: Authorized under EPTL 7-1.12, an SNT holds assets for a person with disabilities so they can receive support without disqualifying them from Medicaid or SSI.
Why funding a trust is the step people skip
A trust controls only the assets actually retitled into it. An unfunded trust — signed but never funded — does nothing, and the assets still go through probate. Funding means changing title: re-deeding a condo into the trust, and for a co-op, working with the cooperative corporation to reissue the shares in the trust’s name under EPTL 7-1.12. Co-op boards must usually consent, so funding a co-op into a trust takes lead time. Skipping this step is the single most common reason NYC trusts fail.
Trustee duties under New York law
A trustee owes fiduciary duties to the beneficiaries and must follow the Prudent Investor Act (EPTL 11-2.3) — diversifying investments, acting with care, and managing the trust solely in the beneficiaries’ interest. Trustees must keep records, account for activity, and avoid self-dealing.
Probate-avoidance value for NYC owners
Because NYC estates are dominated by co-op shares and condos, the privacy and efficiency of a trust are especially valuable. A co-op passing through probate may sit in limbo while the executor obtains letters and the board reviews the transfer; a co-op already held in a funded revocable trust can transition through the successor trustee with far less friction. New York does not offer transfer-on-death deeds for real property, so a trust is one of the few clean ways to keep an apartment out of Surrogate’s Court. Compare the court route in the NYC probate process guide and the borough specifics in the NYC estate guide.
Frequently asked questions about trusts in New York
Do I still need a will if I have a trust? Yes. A “pour-over” will catches any asset you forgot to fund into the trust and names guardians for minor children. See the wills page.
Does a revocable trust protect assets from creditors or Medicaid? No. Because you keep control, a revocable trust offers no asset protection. Only an irrevocable trust, planned beyond the five-year lookback, protects assets from Medicaid.
Can a co-op be put into a trust? Yes, under EPTL 7-1.12, but the cooperative’s board usually must approve reissuing the shares to the trust, so allow time.
Book a 30-minute consultation with Russel Morgan to discuss whether a trust fits your NYC estate.
Have a question about your estate?
Talk it through with Russel Morgan — free 30-minute consult.