At What Net Worth Do I Need a Trust in New York?

When it comes to estate planning, one of the most common questions people ask is, At what net worth do I need a trust? The answer is not as simple as a dollar amount. No specific net worth threshold determines whether you need a trust. Instead, it depends on your goals, the complexity of your estate, and whether you need the benefits a trust provides. At the Law Offices of Andrew M. Lamkin, P.C., our award-winning legal team can help you analyze these issues and determine if a trust is your best option for managing your estate.

What Is a Trust?

You create a trust in a legal document, allowing you to transfer assets to a separate entity managed by a trustee for the benefit of your chosen beneficiaries (including yourself). Unlike a will, which takes effect after you pass away, you can use a trust to manage assets during your lifetime and distribute them according to your wishes after death.

Who Needs a Trust Instead of a Will?

Trusts can help many individuals when it comes to estate planning. You may need a trust instead of a will if:

• You want to avoid probate and ensure a smooth transfer of assets to your heirs;
• You have minor children or dependents with special needs who require long-term financial support;
• You own property in multiple states and want to simplify the transfer process;
• You want to protect your assets from creditors or lawsuits; or
• You have a blended family and want to control how to distribute your assets after your passing.

While a will is often an essential document for estate planning, it does not provide the same level of control and flexibility as a trust. A trust allows you to dictate how and when your assets are distributed, even long after you pass away.

How to Create a Trust

Creating a trust involves several steps if you determine that one is right for you. Depending on the type of trust you choose, the following steps may be part of the creation process.

Define Your Goals

Before you create a trust, consider why you need one. Are you looking to avoid probate? Do you want to provide for a loved one with special needs? Are you trying to maintain Medicaid eligibility while living in your home? Knowing your goals can help you choose the right type of trust.

Choose the Type of Trust

There are many different kinds of trusts, and each can serve a different purpose. Types of trusts include the following:

• Revocable living trust. With this type of trust, you retain control over your assets during your lifetime and can make changes as needed.
• Irrevocable trust. Once you establish this type of trust, you cannot modify or revoke it, but it can offer significant asset protection and tax benefits.
• Supplemental needs trust. This trust is designed for beneficiaries with disabilities to ensure they receive financial support without jeopardizing their access to government benefits.
• Medicaid trust. Creating this type of trust can help you stay within the asset limits for Medicaid eligibility without having to sell your property.
• Trust for the benefit of a minor. You can create a trust to set aside funds and property to support your child.

You can create a trust for any lawful purpose, and we can help you every step of the way.

Select a Trustee

A trustee is responsible for managing the trust assets according to your wishes. You can serve as your own trustee or appoint a trusted individual, a professional trustee, or a financial institution.

Fund the Trust

A trust is only effective when properly funded. This means transferring ownership of assets—such as real estate, bank accounts, investments, and business interests—into the trust’s name.

Draft the Trust Document

A legally binding trust document outlines the terms of the trust, including: 

• Who the beneficiaries are, 
• The trustee’s responsibilities, 
• How assets should be managed and distributed, and 
• Rules for revoking the trust (if any).

An experienced estate planning attorney can help ensure your trust document complies with New York state laws.

Execute the Trust Documents

After you draft your trust document, you and at least one of your trustees will likely have to sign it in the presence of two witnesses. The witnesses to your signature must also sign the trust document to make it valid.

Maintain the Trust

Once you establish your trust, it is important to keep it updated. Life changes—such as marriage, divorce, the birth of a child, or changes in financial circumstances—may require modifications to the trust. Any changes must be in writing and signed by any individual your trust authorized to make changes and two witnesses.

Do I Need a Trust?

Many people wonder if a specific financial threshold exists for needing a trust. The truth is, a trust is not about net worth—it’s about what you want to accomplish.

That said, here are some general matters you may want to think about:

• If your estate is valued at more than $7.16 million (as of 2024), you may benefit from a trust to reduce estate taxes in New York;
• If you own significant assets that could be subject to probate, a trust can help your heirs and beneficiaries avoid lengthy court proceedings;
• If your wealth consists of illiquid assets like real estate or a business, a trust can help manage those assets; and 
• If you have extensive property but cannot exceed certain asset limits to receive government benefits, a trust may help you maintain your property while receiving benefits.

Ultimately, the decision to create a trust should be based on your estate planning goals and financial situation rather than a specific dollar amount.

Should You Speak With an Estate Planning Attorney?

Are you reviewing your books and asking, At what net worth do I need a trust? We can help you answer that question. At the Law Offices of Andrew M. Lamkin, P.C., we have over a decade of experience and focus on helping clients create customized estate plans. We can help you protect your assets and provide for your loved ones. Whether you need a will, a trust, or a combination of both, we can guide you through the process and ensure your wishes are followed.

Reach out to the Law Offices of Andrew M. Lamkin, P.C., by phone or online. We are here to help you navigate estate planning with confidence and peace of mind.

Resource List

• The Laws of New York, Chapter 17-B, §7-1.12, link.
• Explanation of the Effect of Trusts on Medicaid Eligibility, New York State Department of Health, link.
• The Laws of New York, Chapter 17-B, §7-1.4, link.
• The Laws of New York, Chapter 17-B, §7-6.4, link.

Andrew Lamkin

Andrew Lamkin is principal in the law firm of Andrew M. Lamkin, P.C., where he focuses his practice in the areas of elder law, estate planning and special needs planning, including Wills and Trusts, Medicaid planning, estate administration and residential real estate transactions. He is admitted to practice law in New York and New Jersey.

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