New York families often ask whether they need a revocable or an irrevocable trust. The answer depends on the job you want the trust to do. A revocable trust is mainly a tool for keeping control while planning for probate and incapacity. An irrevocable trust is mainly a tool for moving assets out of your hands. People consider it for nursing-home Medicaid planning, New York estate-tax planning, or holding life insurance. Neither type does everything, and many New York plans use both.
This guide compares the two side by side under New York law. It covers control, signing and funding rules, probate, the Medicaid look-back, creditor challenges, fiduciary tax returns, and New York's estate-tax “cliff.” For more detail on each type, see our revocable living trust guide and our irrevocable trusts guide.
Revocable vs Irrevocable Trust: Side-by-Side Comparison
| Issue | Revocable trust | Irrevocable trust |
|---|---|---|
| Control and changes | Designed so the creator (grantor) can amend or revoke it. The creator often serves as trustee. | Designed so the creator gives up the power to take the assets back. Any flexibility comes from the trust's own terms. |
| New York formalities | Must be in writing and either acknowledged or witnessed (EPTL 7-1.17). Amendments follow the same rule. | Same execution rule under EPTL 7-1.17. |
| Funding | Valid only to the extent assets are actually transferred to it (EPTL 7-1.18). | Same rule under EPTL 7-1.18. |
| Nursing-home Medicaid | Not designed as a Medicaid asset-protection tool. Ask counsel how Medicaid would view these assets. | Medicaid asset protection trusts are planned around the 60-month nursing-home look-back. Timing should be reviewed with counsel. |
| Creditor challenges | Not designed as an asset-protection tool. | Depends on drafting and circumstances. Transfers can be challenged under Debtor and Creditor Law 273, 274 and 278. |
| Fiduciary returns | Income-tax treatment depends on how the trust is structured. Review it with your tax adviser. | A trust that files its own returns uses federal Form 1041 and New York Form IT-205, generally due by the 15th day of the fourth month after the tax year ends. |
| NY estate tax | Not, by itself, an estate-tax reduction tool. | Can be part of estate-tax planning. New York's three-year gift add-back (Tax Law 954(a)(3)) and the 2026 exclusion amount need review. |
| Incapacity | A funded trust with a successor trustee is an “available resource” that a guardianship court considers (Mental Hygiene Law 81.03(e)). | Usually managed by a trustee other than the creator, under the trust's terms. |
The sections below explain each row.
Control: Who Can Change the Trust?
The main difference is control. A revocable trust is designed so that you keep it. Many people serve as their own trustee, manage the assets, and keep the right to change beneficiaries or revoke the trust. The trust names a successor trustee to step in when you no longer can.
With an irrevocable trust, you give up most of that control on purpose. Medicaid, estate-tax and creditor planning with an irrevocable trust is built around the creator not being able to take the assets back. Some irrevocable trusts include limited, carefully drafted flexibility, such as a trustee or trust protector with defined powers. Any such feature should be reviewed with your attorney, because it can affect the trust's purpose. You should not sign an irrevocable trust expecting to unwind it later.
How New York Requires Lifetime Trusts to Be Signed and Funded
Both types of trust follow the same basic New York formalities.
- Execution (EPTL 7-1.17). A lifetime trust must be in writing. It must be signed and acknowledged by the creator and by at least one trustee (unless the creator is the sole trustee). As an alternative, it can be signed in the presence of two witnesses who also sign. Amendments must meet the same requirements.
- Funding (EPTL 7-1.18). A lifetime trust is valid only to the extent that assets have actually been transferred to it. A statement in the trust document that property “is hereby transferred” is not a transfer.
The funding rule is where many plans fail. A signed but unfunded trust does little. In practice, funding means retitling accounts and, for a home, preparing a new deed. Our office handles these steps with clients so the trust actually holds what it is supposed to hold. Assets left in your own name may need to go through Surrogate's Court, either under your will or, if there is no will, under New York's intestacy rules (EPTL 4-1.1).
Moving a New York home into a revocable trust can qualify for exemptions from state real estate transfer tax. The exemptions cover conveyances without consideration and mere changes in identity (Tax Law 1405(b)(4) and (b)(6)). New York City has a parallel mere-change-of-identity exemption (NYC Admin. Code 11-2106(b)(8)). An exemption is not the same as no paperwork, though. Transfer-tax filings are still generally expected.
Probate: Both Types Depend on Funding
Families often hear that a trust “avoids probate.” Under New York law, that benefit depends on funding. A lifetime trust is valid only to the extent assets are transferred to it (EPTL 7-1.18). Assets that were properly moved into either type of trust are governed by the trust's terms rather than passing under your will.
The real difference lies elsewhere. A revocable trust lets you keep control. An irrevocable trust requires you to give it up. If probate planning and incapacity planning are your main goals, a revocable trust is usually the more flexible starting point.
A revocable trust can also help with incapacity. New York's guardianship statute directs courts to consider “available resources,” and it expressly lists trusts, powers of attorney and health care proxies (Mental Hygiene Law 81.03(e)). A funded trust with a capable successor trustee, together with a power of attorney and a health care proxy, can reduce the chance that your family needs a court-appointed guardian.
Medicaid: The 60-Month Look-Back
This is where the two types differ most sharply in how they are used.
Revocable trusts are not a Medicaid asset-protection tool
A revocable trust is built so you keep full control over its assets. Families do not use it to plan around nursing-home costs. If long-term care is a concern, ask counsel how Medicaid would view assets in a revocable trust before relying on one.
Irrevocable Medicaid trusts and the 60-month look-back
A Medicaid asset protection trust (MAPT) is an irrevocable trust, typically drafted so that the trustee cannot pay principal to you or your spouse. For nursing-home (institutional) Medicaid, the look-back period is 60 months (Social Services Law 366(5)(e); 42 U.S.C. 1396p(c)(1)(B)). Because of that look-back, the date assets go into the trust matters. Before you apply, ask counsel how any transfer inside the 60-month window could affect eligibility.
Two practical points:
- Plan early. Families who consider a MAPT usually do so well ahead of any need for care. When care is already close, other strategies may fit better.
- A spouse at home. For 2026, New York's community spouse resource allowance ranges from $74,820 to $162,660, and the community spouse minimum monthly maintenance needs allowance is $4,066.50 (NYS DOH GIS 26 MA/03). Ask counsel how these figures apply to your household.
For a family member with a disability, federal and New York law also recognize two special trusts. One is a first-party trust for an individual under 65, with a payback to the state. The other is a pooled trust managed by a nonprofit association (42 U.S.C. 1396p(d)(4)(A) and (C); Social Services Law 366(2)(b)(2)(iii)). These follow their own rules and are drafted separately.
The 30-month community Medicaid look-back is not in effect
New York has proposed a 30-month look-back for community-based long-term care, such as home care, as part of a federal waiver request. As of November 2026, official Department of Health materials do not show it as implemented. State law makes it subject to federal approval, and no effective date has been confirmed. Do not plan as if a 30-month community look-back currently applies. The 60-month nursing-home look-back remains in force.
For drafting details, trustee choices and how a MAPT handles a home, see our Medicaid asset protection trust guide.
Creditor Challenges and the Limits of Asset Protection
A revocable trust is not designed to protect assets from your own creditors, because you keep control over it.
An irrevocable trust is sometimes used as part of asset-protection planning, but there are important limits:
- Voidable transfers. New York's Debtor and Creditor Law 273, 274 and 278 (effective April 4, 2020) let creditors challenge transfers made with actual intent to hinder, delay or defraud. The statute lists “badges” of fraud that courts consider. It also reaches certain constructively fraudulent transfers, even without that intent. The creditor generally must prove its claim by a preponderance of the evidence. Claims are generally subject to a four-year limit. For actual-intent claims, a creditor may instead have one year from discovery. Certain insider claims under DCL 274(b) have a one-year limit.
- What you keep matters. Before you rely on a trust for protection, review with counsel any interest or control you keep in it, and any out-of-state trust structure.
Asset-protection planning works best when it is done early, before any claim exists, and with assets you can afford to give up.
Income Tax and Fiduciary Returns
How a trust's income is taxed depends on how the trust is drafted, and a revocable trust and an irrevocable trust may be treated differently. Review income-tax treatment with your attorney and tax adviser before funding any irrevocable trust, especially with appreciated assets.
When a trust or estate files its own returns, the deadlines are:
- Federal Form 1041: generally the 15th day of the fourth month after the tax year ends. For calendar-year trusts, that is April 15 (April 15, 2026 for tax year 2025).
- New York Form IT-205: the same timing under Tax Law 651(a), with April 15, 2026 as the calendar-year deadline for tax year 2025. Tax Law 657 allows an extension of up to six months.
New York Estate Tax and the Cliff
A revocable trust is not, by itself, an estate-tax reduction tool. Irrevocable trusts are often part of estate-tax planning. Whether a given transfer helps depends on how the trust is drafted and what you keep, so review it with counsel.
2026 figures, from official sources:
- New York basic exclusion amount: $7,350,000 for deaths from January 1 through December 31, 2026 (NYS Department of Taxation and Finance). For 2025 it was $7,160,000.
- Federal basic exclusion amount: $15,000,000 per person for 2026 (IRC 2010(c)(3), as amended by Pub. L. 119-21; Rev. Proc. 2025-32).
- Federal annual gift exclusion: $19,000 per recipient for 2026 (Rev. Proc. 2025-32).
The cliff. Under Tax Law 952, the New York credit phases out between 100% and 105% of the exclusion amount, and no credit is available above 105%. For 2026, 105% of $7,350,000 is $7,717,500. An estate just above that line can owe much more New York tax than one just below it.
Gift add-back. Certain gifts made within three years of death are added back into the New York taxable estate (Tax Law 954(a)(3)). Under current law the add-back sunsets for deaths on or after January 1, 2032. Bills affecting New York's estate tax are pending, so confirm the current rules before relying on any figure here.
Life insurance. Federal law includes life insurance proceeds in the gross estate when they are receivable by the executor, or when the insured held any incidents of ownership at death (26 U.S.C. 2042). That is one reason some families consider a separate irrevocable trust to hold a policy.
For worked examples and spousal planning ideas, see our New York estate tax cliff guide.
Which Fits Your Situation?
These are general patterns, not recommendations for any one family:
- You mainly want to plan for probate and incapacity, and you want to keep control. A common starting point is a funded revocable trust, plus a will, power of attorney and health care proxy.
- You want to plan for future nursing-home costs and can plan well ahead. An irrevocable Medicaid asset protection trust is often considered, alongside a revocable trust for the assets you keep.
- Your estate is near or above New York's $7,350,000 exclusion. Irrevocable gifting or life insurance trusts are often reviewed, along with cliff-aware will and trust provisions.
- You are worried about a lawsuit or creditor claim that already exists. A transfer made now may be challenged as a voidable transfer. Get advice before moving any assets.
Many New York clients end up with both: a revocable trust for the assets they want to keep, and an irrevocable trust for the assets they are ready to give up. To see how these pieces fit into a full plan, visit our estate planning services page.
Frequently Asked Questions
Can I use my revocable trust for Medicaid or estate-tax planning later?
Medicaid and estate-tax planning with a trust generally involves a separately drafted irrevocable trust and an actual transfer of assets to it. For nursing-home Medicaid, the 60-month look-back focuses on transfers, so the date assets move matters. Talk to counsel about timing.
Does a revocable trust protect my house from nursing-home costs?
A revocable trust is not designed for that, because you keep full control. Families planning around nursing-home costs usually look at an irrevocable Medicaid asset protection trust or other strategies, with the 60-month look-back in mind. Ask counsel how your home would be treated.
Is there a 30-month look-back for home care in New York?
Not in effect as of November 2026. New York proposed a 30-month look-back for community-based long-term care, but official sources do not show it as implemented. The 60-month look-back for nursing-home Medicaid remains in force.
Will an irrevocable trust avoid New York estate tax?
It can be part of the plan, depending on drafting and what you keep. Watch the three-year gift add-back under Tax Law 954(a)(3), which under current law sunsets for deaths on or after January 1, 2032. Also keep the 2026 exclusion amount of $7,350,000 and the 105% cliff ($7,717,500) in mind.
Can I be the trustee of my own trust?
For a revocable trust, it is very common. For an irrevocable trust, the choice of trustee can affect Medicaid, estate-tax and creditor goals, so review it with counsel. Many irrevocable trusts name a trusted family member or another person instead.
Do I still need a will if I have a trust?
Most plans include one. A will covers assets that never made it into the trust, and assets outside the trust may need to go through Surrogate's Court. That is why funding the trust under EPTL 7-1.18 matters. In New York, a will is signed at the end and witnessed by two witnesses (EPTL 3-2.1). Electronic wills are not in effect until December 12, 2027.
Talk With a New York Trusts and Estates Attorney
The choice between a revocable and an irrevocable trust depends on your assets, your family, your health outlook and how much control you are willing to give up. Schwartsman Law Group PLLC advises clients on New York trusts, Medicaid planning and estate-tax planning. Call (212) 518-3868 to schedule a Free Consultation. Our practice focuses on New York law. This guide is general information, not legal advice for your situation.