A revocable living trust is a trust created during the grantor’s lifetime that can be changed, amended, or revoked at any time while the grantor has capacity. The grantor transfers assets into the trust during life, and those assets are managed by the trustee (often the grantor during life) for the benefit of the named beneficiaries. At the grantor’s death, the trust becomes irrevocable and the assets are distributed according to the trust’s terms without going through probate, one of the primary reasons families choose to use trusts in their estate plans.
In New York, revocable trusts are governed by EPTL Article 7 and, for trusts created after the effective date, the Uniform Trust Code provisions in EPTL Article 7-A.
The Primary Benefit: Avoiding Probate
The most significant advantage of a revocable living trust is probate avoidance. Assets held in the trust at the grantor’s death pass directly to the beneficiaries named in the trust instrument, without any filing in Surrogate’s Court. There is no probate petition, no citation to distributees, no court supervision of the distribution, and no public record of what was distributed to whom.
For Westchester County families, probate avoidance can be valuable for several reasons. Probate is a public proceeding; anyone can access the court file and learn the contents of the will, the value of the estate, and the identities of the beneficiaries. A revocable trust keeps this information private. Probate also takes time (six to twelve months or more for contested or complex estates) and costs money (court fees, executor commissions on probate assets, and attorney fees for the probate proceeding).
What a Revocable Trust Does Not Do
It does not save estate taxes. For estate tax purposes, the assets in a revocable trust are included in the grantor’s gross estate because the grantor retained the power to revoke. A revocable trust, standing alone, provides no estate tax benefit. However, a revocable trust can be structured to include credit shelter trust provisions that activate at the grantor’s death, which do provide estate tax planning for married couples.
It does not provide asset protection during life. Because the grantor can revoke the trust at any time, the grantor’s creditors can reach the trust assets during the grantor’s lifetime.
It does not eliminate the need for a will. Even with a revocable trust, every estate plan should include a “pour-over will” that directs any assets not already in the trust (because they were inadvertently left out or acquired after the trust was funded) into the trust at death. The pour-over will acts as a safety net.
Creating the Trust
A revocable trust is created by a written trust instrument (the trust agreement) signed by the grantor. Under EPTL 7-1.17, a revocable lifetime trust must be in writing, signed by the grantor, and its terms must be set forth in the trust instrument or in a written document incorporated by reference.
The trust instrument names the grantor, the trustee (who manages the trust assets), the successor trustee (who takes over if the initial trustee becomes incapacitated or dies), and the beneficiaries.
During the grantor’s lifetime, the grantor typically serves as both grantor and trustee, maintaining full control over the trust assets.
Funding the Trust
A trust is only effective to the extent it holds assets. “Funding” the trust means transferring ownership of assets from the grantor individually to the grantor as trustee of the trust. This step is critical, and it is the step most often neglected.
Real property. Requires a new deed transferring the property to the trust. In Westchester County, this means recording the deed with the Westchester County Clerk. New York does not impose a transfer tax on transfers to a revocable trust by the grantor (Tax Law Section 1405(b)(6)), so there is no real estate transfer tax cost.
Bank and investment accounts. The grantor re-titles accounts in the name of the trust or designates the trust as beneficiary.
Brokerage accounts. Similar to bank accounts; the account is re-titled in the name of the trust.
Life insurance. The trust can be named as the beneficiary of a life insurance policy. Note that beneficiary designations must be coordinated with the overall estate plan to work effectively.
Retirement accounts. Naming the trust as beneficiary of an IRA or 401(k) requires careful planning because of the income tax rules governing distributions from retirement accounts. The trust must qualify as a “see-through trust” to preserve the beneficiary’s ability to stretch distributions over his or her life expectancy. This is a technical area that requires coordination with a tax advisor.
An unfunded revocable trust provides no benefit. If the grantor creates a trust but never transfers assets into it, the assets remain in the grantor’s individual name and pass through probate.
Revocable Trusts and the New York Estate Tax
Although the trust itself does not save estate taxes, a well-drafted revocable trust for a married couple can include provisions that create a credit shelter trust (bypass trust) at the first spouse’s death. The credit shelter trust preserves the first spouse’s New York basic exclusion amount ($7,350,000 in 2026), which would otherwise be wasted because New York does not allow portability of the state estate tax exclusion.
This is the same planning that can be accomplished through a will with testamentary trust provisions, but using a revocable trust offers the additional benefit of probate avoidance.
Amendment and Revocation
The grantor can amend or revoke the trust at any time during his or her lifetime, provided the grantor has capacity. Under EPTL 7-1.17, the power to revoke may be exercised by the grantor’s agent under a power of attorney only if the power of attorney expressly grants that authority. If the grantor becomes incapacitated without having granted the agent authority to modify the trust, the trust terms become effectively fixed.
Revocable Trusts for Multi-State Property Owners
One of the strongest arguments for a revocable trust in Westchester County applies to families who own real property in more than one state. When a decedent owns real property in another state, the estate may need to open an “ancillary probate” proceeding in that state. This means two court proceedings, two sets of filing fees, and potentially two sets of attorneys.
If the out-of-state property is held in a revocable trust, ancillary probate is unnecessary. The trustee can transfer the property according to the trust terms without any court involvement.
For Westchester families who own a vacation home in Florida, Connecticut, the Carolinas, or elsewhere, this can be a meaningful benefit.
When a Revocable Trust May Not Be Necessary
Not every Westchester family needs a revocable trust. A trust adds complexity and cost to the estate plan, and it requires ongoing attention to ensure new assets are properly titled. For families with straightforward estates, where most assets pass by beneficiary designation or joint ownership, a will-based plan may be sufficient.
The decision to use a revocable trust depends on factors including the size and complexity of the estate, whether the family owns multi-state real property, the desire for privacy, and the family’s tolerance for the probate process.
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