What Types of Trusts Are There? A Simple Map

There are many kinds of trusts, and their names can be intimidating. But three questions sort out most of them: Can it be changed? When is it created? What is it for?

Question 1: Can It Be Changed?

• Revocable trust: While you are alive and competent, you can change or cancel it at any time. Flexible, but the property is still treated as yours.
• Irrevocable trust: Once created, it generally cannot be freely changed or taken back. You give up some control in exchange for tax or Medicaid benefits.

Note: In New York, a trust that does not expressly say it is revocable is presumed irrevocable (EPTL §7-1.16).

Question 2: When Is It Created?

• Living (inter vivos) trust: Signed and created during your lifetime.
• Testamentary trust: Written into your will. It comes into existence only after your will is probated. The trustee needs authority from the court and may be subject to court oversight.

Question 3: What Is It For? The Most Common Types

1. Revocable Living Trust

Purpose: Avoid probate, provide for management if you become incapacitated, control when children receive money and protect privacy.
Good for: Families with real estate (especially a co-op or out-of-state property), children or relatives overseas.
Cannot: Save taxes, protect you from creditors or help you qualify for Medicaid.

2. Medicaid Asset Protection Trust (MAPT)

Purpose: Protect a home and savings in case you later need nursing home or home care Medicaid.
How it works: This is an irrevocable trust. You can usually keep living in your home and receive the income the trust assets produce, but you cannot access the principal. A child usually serves as trustee. Once the assets have been in the trust for five years, they are generally not counted for nursing home Medicaid eligibility.
Extra benefits: When properly designed, a MAPT can usually preserve property tax benefits such as STAR, and your children can receive a step-up in cost basis at inheritance, reducing capital gains tax.

3. Supplemental Needs Trust (SNT)

Purpose: Provide for a family member with a disability without jeopardizing SSI, Medicaid or similar benefits (EPTL §7-1.12).
Three common forms:
- Third-party SNT: Funded by parents or relatives. Whatever remains at the beneficiary’s death can pass to other family members;
- First-party SNT: Funded with the beneficiary’s own money (for example, a lawsuit settlement). Medicaid must be repaid at the beneficiary’s death;
- Pooled trust: Managed by a nonprofit. In New York, pooled trusts are often used to handle “excess income” for home care Medicaid applicants.

4. Irrevocable Life Insurance Trust (ILIT)

Purpose: The trust owns a life insurance policy, so the death benefit is kept out of your taxable estate and is distributed under your rules. Useful when a policy could push your estate over the New York estate tax threshold. (See Part 13.)

5. Estate Tax Trusts for Married Couples

New York does not allow a surviving spouse to use a deceased spouse’s unused exclusion, so couples with larger estates often use:
- Credit shelter (bypass) trust: When the first spouse dies, assets up to the exclusion amount go into a trust. The surviving spouse can benefit, but those assets are not counted in the survivor’s estate;
- Disclaimer trust: Nothing is locked in advance. After the first death, the surviving spouse decides whether to disclaim some assets into the trust, which adds flexibility;
- QTIP trust: Your spouse benefits for life, and what remains afterward goes where you choose (for example, to your children from a prior marriage), while still qualifying for the marital deduction.

6. Trust for a Non-Citizen Spouse (QDOT)

If your spouse is not a U.S. citizen, property left to them does not automatically qualify for the unlimited marital deduction. A qualified domestic trust (QDOT) can defer federal estate tax. This comes up often in immigrant families.

7. Children’s and Education Trusts

These can be part of a living trust or will, or set up as a separate irrevocable trust that receives annual exclusion gifts ($19,000 per donor per recipient in 2026).

8. Charitable Trusts

• Charitable remainder trust: You or your family receive income first, and what remains goes to charity;
• Charitable lead trust: Charity receives income first, and what remains goes to your family.

9. Advanced Gifting Trusts

Examples include the spousal lifetime access trust (SLAT) and the grantor retained annuity trust (GRAT). These are mainly for larger estates that want to move future growth out of the taxable estate. They are complex and require careful design.

10. Pet Trust

New York law allows a trust for the care of a pet, with a named caretaker and funds (EPTL §7-8.1).

Is There a Trust That Protects My Assets From My Own Creditors?

Under New York law, a trust created for your own benefit is void as against your creditors (EPTL §7-3.1). So in New York, you cannot create a trust that benefits you and also blocks your own creditors. A few other states and foreign jurisdictions allow so-called “asset protection trusts,” but their effect for New York residents is uncertain, and they must be set up long before any problem arises. They cannot be used to avoid known debts.

Summary Table

The Bottom Line

Don’t start with “which trust do I want.” Start with “what problem am I trying to solve?” Once the goal is clear, the right tool follows, and many families combine several types of trusts.

Attorney’s perspective

I don’t start with “which trust do you want.” I start with “what problem are you solving.” Families often combine tools, such as a revocable trust to avoid probate and a life insurance trust to address New York’s estate tax cliff. The right combination depends on your assets and your family.

For advice about your own family’s situation, call +1 718-218-5805 or schedule a consultation. We meet clients in Flushing and Manhattan, in English or Chinese.

Related: Part 6: When I Say “Trust,” Which One Do I Mean? | Part 7: Which Assets Can Go Into a Trust? A Funding Checklist

Series overview

This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. For advice about your situation, please contact us.

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