12 Estate Planning Myths & Misconceptions in New York City (2025-2026)
As a New York estate planning attorney with many years of experience, I have seen the same tragedies strike families over and over. These tragedies are not caused by complex legal loopholes; they are caused by simple, common, and dangerous misconceptions. Believing one of these “myths” is the equivalent of building your family’s financial future on quicksand.
I am Russel Morgan, and my firm, Morgan Legal Group, has successfully guided over 1,000 families through the probate and administration process. Our experience, backed by 900+ positive online reviews, has shown us that these myths are the #1 cause of lost inheritances, devastating tax bills, and bitter family conflicts.
In 2025 and 2026, these myths are more dangerous than ever. Two “time bombs” are ticking: the 2026 federal estate tax “sunset” and New York’s new 30-month Medicaid “look-back” for home care. What was “bad advice” five years ago is a multi-million dollar catastrophe today. This guide will authoritatively debunk the 12 biggest myths we see every day.
Myth #1: “I have a Will, so my family will avoid probate.”
The NY Reality: This is the #1 most dangerous myth. A Last Will and Testament does not avoid probate. A Will is a one-way ticket *to* probate court. It is a formal set of instructions for the Surrogate’s Court judge. It has no legal power until a judge validates it.
The New York City Probate Nightmare
In our 1,000+ cases, we know that probate in New York City (whether in Brooklyn, Queens, or Manhattan) is a disaster.
- It’s 100% Public: Your will and a full inventory of your assets (your co-op value, your accounts) become a public record.
- It’s Agonizingly Slow: A “simple” probate in NYC can take 1-2 *years*. Your assets are frozen.
- It’s Shockingly Expensive: Your estate must pay executor commissions (on a $1M estate, this is $34,000) plus thousands in court costs and legal fees.
- It Invites Conflict: The court process *requires* all next-of-kin to be notified, giving any disgruntled relative a formal invitation to contest the will.
The “Gold Standard” Solution: A Revocable Living Trust. A trust is a private contract. It owns your assets, so when you pass, there is no court, no delay, and no public record. It is the *only* way to guarantee you avoid probate.
Myth #2: “I’ll just add my child to my deed/bank account.”
The NY Reality: This is the “simple shortcut” trap. You sign a new deed that lists you and your child as “Joint Tenants.” It *does* avoid probate, but it creates three new, larger disasters.
- The Capital Gains Tax Bomb: You just handed your child a massive tax bill. When they *inherit* a home, they get a “step-up in basis” and pay $0 in capital gains tax. When you “gift” them the home by adding them to the deed, they get your *old* “cost basis.” A $2.1M home bought for $100k will result in a $500,000+ tax bill for your child. A trust avoids this 100%.
- The Creditor Trap: The moment you add your child, they are a legal owner. Is your child getting divorced? Their spouse can claim a stake in *your* home. Does your child have a tax lien? A creditor can force the sale of *your* home.
- The 2025 Medicaid Trap: This “gift” triggers the 5-year/30-month Medicaid “look-back” period, making you ineligible for long-term care.
Myth #3: “Medicare will pay for my long-term care.”
The NY Reality: This is the #1 elder law myth. Medicare pays $0 for long-term “custodial” care (home aides, assisted living). Medicare is your *health* insurance. Medicaid is the *only* program that pays for the $20,000/month cost of care. Believing this myth is the fastest way to lose your entire life savings.
Myth #4: “I can protect my home by ‘gifting’ it to my kids.”
The NY Reality: This is a catastrophe. This “simple” gift is a “transfer” that makes you 100% ineligible for Medicaid.
- It triggers the 5-year look-back for nursing home care.
- It triggers the new 30-month look-back for home care (the 2025 crisis).
You have not protected your home; you have simply lost control of it and disqualified yourself from the only program that can pay for your care.
The “Gold Standard” Solution: The Medicaid Asset Protection Trust (MAPT). This is an irrevocable trust you create *now* to start the look-back clock. After the clock runs out, your home is 100% protected. It is the *only* way to protect your home.
Myth #5: “I’m not rich, so I don’t need an estate plan.”
The NY Reality: This myth confuses “rich” with “owning property.” If you own a co-op in Queens or a small house in Staten Island, you have an “estate” that the NY Surrogate’s Court *will* force into probate. In fact, probate is a “middle-class tax” that hits $800,000 estates the hardest. Furthermore, the $20,000/month cost of long-term care will wipe out a $800,000 estate faster than a $20M one. Planning is *more* critical for the middle class.
Myth #6: “My estate is under $13.6M, so I’m safe from estate tax.”
The NY Reality: This is the “2026 Tax Sunset” trap. This $13.61M exemption is temporary. On Jan 1, 2026, it is being cut in half to ~$7M.
- A $10M estate that is “safe” today will suddenly owe over $1.2 MILLION in federal and state taxes in 2026.
- You are also ignoring the NYS “Cliff Tax”. NY has its *own* $6.94M exemption. If your estate is just 5% over, you *lose the entire exemption* and pay tax from dollar one.
The Solution: 2025 is your last “use it or lose it” window to make strategic gifts to advanced trusts (like SLATs) to lock in your high exemption before it vanishes.
Myth #7: “My Will controls my IRA/401k and life insurance.”
The NY Reality: This is a fatal error. Your IRA, 401(k), and life insurance are controlled by *beneficiary designation forms*. These forms override your Will. In our 1,000+ cases, we have seen this tragedy: A man’s will leaves everything to his new wife. His $2M IRA beneficiary form, signed 20 years ago, still lists his *ex-wife*. The ex-wife gets the $2M. The will is useless. A true plan audits and coordinates *all* these forms.
Myth #8: “A Power of Attorney is a simple ‘DIY’ form.”
The NY Reality: This is a New York-specific trap. NY has one of the *strictest* and most *complex* Power of Attorney (POA) forms in the country.
- Banks REJECT them: Banks reject “DIY” or online forms *every single day* for tiny errors.
- The Result: When a POA is rejected, your *only* option is a $20,000+ public guardianship proceeding.
- The Missing “SGR”: A “DIY” form lacks the “Statutory Gifts Rider” (SGR), making all Medicaid and tax planning impossible if you’re incapacitated.
An expertly drafted POA from a firm like ours is “battle-tested” to be accepted by NY banks.
Myth #9: “A Trust is only for billionaires.”
The NY Reality: This confuses tax planning with probate planning. While complex *tax-planning* trusts (like SLATs) are for the wealthy, the *most common* trust—the Revocable Living Trust—is for everyday homeowners. Its primary job is not to save on taxes; it’s to avoid the probate court. If you own a home or co-op in NYC, a Revocable Trust is the most effective and affordable tool to protect it from probate.
Myth #10: “My spouse will automatically get everything.”
The NY Reality: This is false if you have children. If you die in NY *without* a will (intestate), the law (EPTL 4-1.1) dictates who gets what. Your spouse does *not* get 100%.
- The Rule: Your spouse gets the first $50,000 and *half* (50%) of the remainder.
- Your *children* get the other 50%.
This can be a disaster, forcing the sale of the family home. It also fails to protect unmarried partners, who are “legal strangers” and get zero.
Myth #11: “My family will ‘do the right thing’.”
The NY Reality: “A verbal promise is not an estate plan.” As an attorney who has handled over 1,000 estates, I can tell you that grief, money, and family are a toxic combination. A “handshake deal” that “everyone will share” *will* end in a lawsuit. A legal plan removes all ambiguity and *prevents* conflict. It is the greatest gift you can give your family.
Myth #12: “It’s too late to plan.”
The NY Reality: This is the most dangerous myth of all. In 2025, it is almost *never* too late.
- Facing the 2026 Tax Sunset? You have until Dec. 31, 2025, to make strategic gifts.
- Facing a $20k/month care bill? Even “crisis” elder law planning can save a significant portion of your assets.
- Facing probate? It is never too late to create your *own* plan to protect your *own* assets.
Doing *something* is always better than doing nothing.
Conclusion: “Simple” is a Trap. “Comprehensive” is the Solution.
Your legacy is your life’s work. It is not a “DIY” project. In the complex 2025-2026 New York legal landscape, an “easy” plan is a guaranteed failure. The only way to make it “easy” for your loved ones is to do it the *right* way.
A comprehensive plan—a Revocable Trust, a “battle-tested” Power of Attorney, a Health Care Proxy, and a review of your assets against the 2025/2026 tax and Medicaid threats—is the only fortress that works.
Do not wait for a crisis. Schedule a consultation with the expert team at Morgan Legal Group today. Our 900+ positive reviews (as seen on Google) come from clients we’ve saved from these exact mistakes. Let us build your fortress.
For more information on New York’s probate laws, you can visit the NY Courts Surrogate’s Court official website.
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