Most New Yorkers don’t discover their trust was flawed until it’s too late. Whether you’re in Manhattan, Long Island, Westchester, or Upstate New York, the same preventable errors keep surfacing — and they can cost families thousands of dollars and months of court delays.
Mistake #1 — Using a Revocable Trust to Avoid Estate Tax
A revocable living trust avoids probate and maintains privacy, but assets remain in your taxable estate. New York’s 2026 basic exclusion is $7,350,000, with a hard cliff at $7,717,500: estates exceeding that threshold lose the entire exemption. If reducing estate-tax exposure is your goal, you need an irrevocable trust.
Mistake #2 — Waiting Too Long to Plan for Medicaid
Irrevocable trusts used for Medicaid planning are subject to a 5-year look-back. Transfers made within that window can trigger disqualification. Early planning under EPTL Article 7 is critical.
Mistake #3 — Leaving a Disabled Beneficiary Off a Special Needs Trust
Inheriting assets outright can disqualify a loved one from Medicaid or SSI. A Supplemental Needs Trust under EPTL § 7-1.12 preserves eligibility while still providing support.
Mistake #4 — Choosing the Wrong Trustee
Under EPTL Article 11-A, trustees must meet the prudent-investor standard, maintain loyalty, and account regularly to beneficiaries. A poor choice can expose the trust — and the trustee — to personal liability. See our trust administration guidance.
Mistake #5 — Treating a Trust as a Will Substitute — or Vice Versa
A will is public record and must be probated in Surrogate’s Court. A properly funded trust avoids probate entirely. Understanding the trust vs. will distinction is foundational to any New York estate plan. Start with our trusts overview.
Ready to avoid these pitfalls? Attorney Russel Morgan, Esq. serves clients across New York State. Schedule a consultation today.
Further reading from Morgan Legal Group: how an irrevocable trust works.