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Islandia is a village in Suffolk County, New York, so trusts created or administered here are governed primarily by New York State law. A trust is a legal arrangement in which one party, the trustee, holds and manages property for the benefit of another, the beneficiary, under terms set by the person who creates the trust, the grantor or settlor. Trusts can help you manage assets during life, plan for incapacity, avoid or simplify probate, support loved ones, protect vulnerable beneficiaries, and carry out tax and charitable objectives.
Common New York trust types include revocable living trusts, irrevocable trusts, testamentary trusts created by a will, supplemental needs trusts for individuals with disabilities, charitable trusts, insurance trusts, credit shelter and QTIP trusts for spouses, and Medicaid asset protection trusts. While New York does not require most lifetime trusts to be filed with the court, trustees must follow strict fiduciary duties and beneficiaries have rights to information and, when appropriate, accountings.
Trusts can be powerful tools, but they are technical and heavily regulated. You may want to consult a New York trusts and estates attorney in these situations:
- You want to avoid or streamline probate and keep your affairs private.- You need a plan in case of incapacity, including who can manage your assets without a court guardianship.- You have a blended family and want to balance support for a spouse with preserving inheritances for children from prior relationships.- You wish to protect a beneficiary who is a minor, has a disability, struggles with addiction, or is financially inexperienced.- You are considering Medicaid planning for long term care and need to understand look back rules and transfer penalties.- You own a business, multiple properties, or assets in more than one state and want continuity of management.- You want to minimize state or federal estate taxes and coordinate beneficiary designations with your trust.- You need to fund a trust correctly and retitle real estate, bank, and investment accounts.- You are a trustee and need guidance on your duties, investments, taxes, and beneficiary communications.- There is a dispute about a trust, a request for an accounting, a possible breach of fiduciary duty, or a need to modify or decant a trust.
- Governing statutes: New York trusts are governed mainly by the Estates, Powers and Trusts Law, often called the EPTL, and the Surrogate's Court Procedure Act, often called the SCPA. Islandia matters typically proceed in Suffolk County Surrogate's Court, and some disputes may be heard in New York State Supreme Court.
- Creating a lifetime trust: New York requires specific execution formalities for lifetime trusts, often including notarization and in some cases witnesses. Consult EPTL 7-1.17 requirements when signing to ensure validity.
- Trustee duties and investments: Trustees owe duties of loyalty, prudence, and impartiality. The New York Prudent Investor Act, EPTL 11-2.3, requires a diversified, risk and return balanced investment approach tailored to the trust purposes and beneficiaries.
- Principal and income rules: New York has detailed rules for allocating receipts and expenses between income beneficiaries and remainder beneficiaries, with options for adjustments and total return unitrust conversions in appropriate cases.
- Spendthrift and creditor issues: Spendthrift provisions can protect a beneficiary's interest, but New York does not allow self settled asset protection trusts for the grantor. A trust you create for your own benefit generally is reachable by your creditors under EPTL principles.
- Supplemental needs trusts: EPTL 7-1.12 recognizes supplemental needs trusts that preserve means tested benefits like SSI and Medicaid when drafted and administered correctly.
- Decanting and modifications: New York permits certain trustees to appoint or decant assets from one trust to another with updated terms under EPTL 10-6.6, subject to statutory conditions and beneficiary protections. Courts can also reform or modify trusts in appropriate cases.
- Rule against perpetuities: New York generally limits how long a private trust can last under EPTL 9-1.1. Planning should account for duration limits and vesting rules.
- Trustee compensation and accountings: Trustee commissions are governed by statute, and beneficiaries can request or compel accountings through SCPA procedures. The trust document can modify default compensation rules.
- Taxes: New York and federal tax rules may apply to trusts. Many revocable trusts are grantor trusts taxed to the grantor during life. New York taxes certain resident trusts and recognizes exceptions in limited cases. New York also has an estate tax with a distinctive exclusion and potential cliff. Coordination with a tax professional is recommended.
- Medicaid planning: New York has a 60 month look back for nursing home Medicaid transfers. Community Medicaid look back rules and implementation timelines are subject to change. Planning with irrevocable trusts must be done carefully and well in advance to be effective.
A will takes effect at death and must go through probate in Surrogate's Court. A revocable living trust operates during life and after death, can provide for incapacity management, and often avoids or reduces probate for assets properly titled in the trust. Many plans use both a trust and a simple pour over will.
Most lifetime trusts do not have to be filed with the court in New York. Trustees still must follow statutory duties and the trust terms. Court involvement arises if there is a dispute, a petition for instructions, or a compelled accounting.
Funding means retitling assets to the trustee's name or arranging beneficiary designations to the trust when appropriate. This can include new deeds for real property, updated bank and brokerage titles, assignments of membership interests, and updated insurance and retirement account beneficiary forms when suitable. Funding steps vary by asset type and should be coordinated with your lawyer and financial institutions.
No. A standard revocable trust offers no creditor or Medicaid protection for the grantor because the grantor retains control. Certain irrevocable trusts may offer protection if properly structured and funded well in advance, but New York does not permit self settled asset protection trusts for your own creditors.
Yes, Medicaid asset protection trusts can be part of a plan. Transfers to such trusts are subject to look back and penalty rules, including a 60 month look back for nursing home Medicaid. The rules are complex and timing is critical, so speak with a New York elder law attorney before making transfers.
A trustee must follow the trust terms, act in the beneficiaries' best interests, invest prudently, keep accurate records, keep beneficiaries reasonably informed, file required tax returns, and avoid conflicts of interest. When in doubt, a trustee should seek legal advice or court instructions.
Trustee commissions are set by statute unless the trust says otherwise. The schedule covers income and principal and may vary for individual versus corporate trustees. Beneficiaries can review commissions through an accounting.
Possibly. A trust may allow removal by specified persons. Otherwise, beneficiaries can petition the court to remove a trustee for cause, such as serious breach of duty, incapacity, or persistent failure to administer the trust effectively.
Many trust matters for Islandia residents are handled in Suffolk County Surrogate's Court. Some lifetime trust disputes may proceed in New York State Supreme Court. Your attorney will choose the proper forum based on the issue.
A revocable trust can typically be amended or revoked during the grantor's lifetime and capacity. Irrevocable trusts are harder to change but may be modified through consent, court approval, decanting, or other statutory tools when permitted.
- Suffolk County Surrogate's Court for probate, trust accountings, and related proceedings.- New York State Unified Court System for forms and procedural guidance in Surrogate's and Supreme Court matters.- New York State Bar Association and Suffolk County Bar Association lawyer referral services for local trust and estates counsel.- New York State Department of Health for Medicaid rules and guidance.- New York State Department of Taxation and Finance for fiduciary income tax and estate tax information.- Office of the New York State Attorney General Charities Bureau for charitable trust oversight.- Nassau Suffolk Law Services and local legal aid organizations for income qualified assistance.- Touro Law Center clinics in Central Islip that may offer limited scope assistance in certain matters.
- Clarify your goals: probate avoidance, tax planning, disability planning, protecting beneficiaries, business succession, or Medicaid planning.- Gather key information: a list of assets and how they are titled, beneficiary designations, family details, existing estate planning documents, and any business agreements.- Schedule consultations: speak with one or more New York trusts and estates attorneys familiar with Suffolk County practice. Ask about experience with your specific goals, such as special needs or Medicaid planning.- Discuss design choices: trustee selection, successor trustees, beneficiary provisions, ages and conditions for distributions, and whether you need a revocable or irrevocable structure.- Understand costs: request a clear fee structure and an engagement letter. Ask about expected filing fees, recording fees for deeds, and potential ongoing trustee costs.- Execute properly: follow New York execution formalities for trusts and related documents. Coordinate powers of attorney, health care proxies, and a pour over will.- Fund the trust: complete re titling, deeds, and beneficiary changes. Confirm with financial institutions and record any real estate documents as required.- Maintain and review: keep organized records, meet tax filing obligations, and review your plan after major life events or changes in law.
This guide is for general information only and is not legal advice. Laws change and your situation is unique. Consult a qualified New York attorney for advice tailored to your circumstances.
