Debunking 7 Common NY Estate Planning Myths
For more than 30 years, I have dedicated my practice to helping New Yorkers protect their families and preserve their legacies. In thousands of consultations, I have found that the biggest obstacle to effective estate planning is not cost or complexity; it is misinformation. A persistent web of myths, half-truths, and outdated “common knowledge” prevents countless people from taking the necessary steps to secure their future, often with devastating consequences for their loved ones.
These myths are everywhere—passed down from family, seen in movies, or found on generic websites that don’t account for New York’s specific and often complex laws. Believing them can lead to flawed plans, unintended disinheritance, unnecessary taxes, and bitter family disputes. The truth is, a plan built on a foundation of myths is a house of cards, destined to collapse when it is needed most.
At Morgan Legal Group, we believe that clarity is the cornerstone of a powerful estate plan. This definitive 2026 guide is designed to be a powerful myth-busting tool. We will identify the seven biggest and most damaging estate planning myths we encounter every day and replace them with the legal reality here in New York. Let’s separate fact from fiction. For a personal consultation to build a plan based on truth, not myths, contact our firm.
Myth #1: “I’m not rich, so I don’t need an estate plan.”
Why People Believe It: The term “estate” itself sounds grand, conjuring images of sprawling properties and vast fortunes. The media often portrays estate planning as a tool for the ultra-wealthy to manage their dynasties, leading average New Yorkers to believe it has no relevance to their lives.
The Legal Reality in New York
This is the most dangerous myth of all. Estate planning is not about the size of your wealth; it is about the control of your life and the protection of your people. If you own *any* assets (a bank account, a car, a co-op in Queens) or have *any* people you care about, you need an estate plan. The primary goals of planning—naming a guardian for your children and appointing agents to make decisions if you are incapacitated—have nothing to do with wealth.
A Cautionary Tale: The Modest Estate in Chaos
A young couple with a toddler and a small apartment passed away unexpectedly. They believed they didn’t have enough assets for an “estate plan.” The consequences were tragic. A court had to decide which set of grieving grandparents would raise their child. Their small bank account was frozen for over a year while the court appointed an administrator. It was not a battle over millions, but a heart-wrenching and costly ordeal that a simple will could have prevented.
The Proactive Solution
Every adult in New York needs, at a minimum, a foundational estate plan consisting of a Last Will and Testament, a Durable Power of Attorney, and a Health Care Proxy. These documents ensure you, not a court, decide who is in charge of your children, your finances, and your healthcare if you cannot.
Myth #2: “A Will is enough to avoid probate.”
Why People Believe It: This is a fundamental misunderstanding of the purpose of a will. People logically assume that if they write down their wishes in a legal document, their family can simply follow those instructions without involving the courts. It feels like a private directive.
The Legal Reality in New York
A will does not avoid probate; it is the very document that guarantees probate. A will is a letter of instruction to the probate court (the Surrogate’s Court in New York). The entire purpose of the probate process is to have a judge validate your will, officially appoint your chosen executor, and supervise the administration of your estate. Without the court’s stamp of approval, your will has no legal authority.
A Cautionary Tale: The Public Probate
An elderly woman passed away with a valid will leaving her home in Staten Island to her daughter. The daughter assumed she could just take ownership. She was shocked to learn she had to hire an attorney, file the will with the court, notify all legal heirs, and wait for “Letters Testamentary” before she could even list the house for sale. The entire process took 14 months and her mother’s financial affairs became a public record.
The Proactive Solution
The most effective tool for avoiding probate is a Revocable Living Trust. By titling your assets in the name of a trust during your lifetime, they can be managed and distributed by your chosen successor trustee privately and efficiently, completely outside the jurisdiction of the probate court. Our firm specializes in creating these integrated wills and trusts.
Myth #3: “My estate is under the exemption, so I don’t need to worry about taxes.”
Why People Believe It: For the past several years, the federal estate tax exemption has been historically high (over $13 million per person in 2025). This has led many New Yorkers to believe that estate taxes are a problem only for the ultra-wealthy.
The Legal Reality in New York for 2026
This is a dangerously outdated myth. On January 1, 2026, the federal exemption is scheduled to be cut in half, to around $7 million. Suddenly, many more New York families will be exposed to a 40% federal estate tax. Furthermore, New York has its own separate estate tax with a much lower exemption ($6.94 million in 2025) and a brutal “cliff.” If your estate is more than 105% of the NY exemption, you lose the exemption entirely and your entire estate is taxed.
A Cautionary Tale: The Tax Cliff
A couple in Westchester has an estate worth $10 million. In 2025, they are well below the federal exemption. In 2026, their estate is suddenly $3 million over the new, lower federal threshold, creating a potential federal tax bill of $1.2 million, on top of their NYS estate tax. They failed to act in 2025 when powerful gifting strategies were available.
The Proactive Solution
Urgent action before the end of 2025 is critical. This involves advanced planning, such as making large, tax-free gifts using the current high exemption, or establishing sophisticated trusts like Spousal Lifetime Access Trusts (SLATs) or Irrevocable Life Insurance Trusts (ILITs). This is a complex area where an expert attorney like Russel Morgan is essential.
Myth #4: “A Revocable Trust protects my assets from creditors and Medicaid.”
Why People Believe It: The word “trust” sounds like a financial fortress. People hear that trusts offer “protection” and assume this applies to all risks, including long-term care costs or lawsuits during their lifetime.
The Legal Reality in New York
This is a critical misunderstanding of the different types of trusts. A Revocable Living Trust, because you retain full control over the assets, offers **zero** protection from your own creditors or from the cost of long-term care. If you are sued, creditors can seize assets in your revocable trust. If you need nursing home care, you must spend down the assets in your revocable trust to qualify for Medicaid.
A Cautionary Tale: The Exposed Nest Egg
A retired business owner placed his life savings into a revocable trust to avoid probate. Years later, he needed nursing home care. He was shocked to learn that the entire trust fund was considered an “available resource” and that he had to spend it all on his care before Medicaid would help. His children’s inheritance was wiped out.
The Proactive Solution
True asset protection from long-term care costs requires an **Irrevocable Trust**. Specifically, a Medicaid Asset Protection Trust, a cornerstone of our elder law practice, can shield your assets. However, this must be done at least five years before care is needed due to Medicaid’s look-back period. It is a powerful but highly specialized tool.
Myth #5: “My family knows my wishes, so I don’t need to write them down.”
Why People Believe It: In close-knit families, there’s a deep-seated belief that loved ones will naturally “do the right thing.” People have verbal conversations about who should get what or who should be in charge and believe these informal agreements will be honored.
The Legal Reality in New York
Verbal promises regarding inheritance or appointments are entirely unenforceable. New York law requires these intentions to be formalized in a legally executed document. In the absence of a valid will or trust, your assets will be distributed according to the strict laws of intestacy, regardless of what you “told” your family. Moreover, the stress of grief can cause even the best-intentioned family members to have very different memories of those conversations, leading to disputes.
The Proactive Solution
Your wishes are only legally binding when they are put in writing and signed with the proper legal formalities. A will, a trust, a Power of Attorney, and a Health Care Proxy are the only way to ensure your voice is heard.
Myth #6: “My plan is done, so I never have to think about it again.”
Why People Believe It: Creating an estate plan feels like a major accomplishment, and it is. People file the documents away and feel a sense of finality, assuming the plan will work perfectly forever.
The Legal Reality in New York
An estate plan is a snapshot of your life at the moment it was created. Life, however, is a moving picture. Laws change (like the 2026 tax cliff), your assets change, and your family changes. An outdated plan can be as dangerous as no plan at all.
A Cautionary Tale: The Outdated Plan
A couple created a plan when their only child was a toddler. They never looked at it again. Twenty years later, they had two more children, their net worth had grown tenfold, and the person they named as guardian had passed away. When they died, their plan created a mess, as it did not account for their two younger children or their now-taxable estate.
The Proactive Solution
Review your estate plan with your attorney every three to five years, and after any major life event: a birth, death, marriage, divorce, or significant change in your financial situation.
Myth #7: “My kids are tech-savvy; they’ll figure out my digital assets and crypto.”
Why People Believe It: This is a new and uniquely modern myth. Parents assume that their digitally native children will easily be able to access their online accounts, cloud photos, and cryptocurrency holdings.
The Legal Reality in New York
Without legal authority and practical access, even the most tech-savvy child will be locked out. Privacy laws prevent tech companies from granting access to accounts without legal standing. And for assets like cryptocurrency held in a private wallet, if the “private key” or “seed phrase” is lost, the assets are gone forever. Your child’s technical skill cannot overcome cryptographic impossibility.
The Proactive Solution
A modern 2026 estate plan must include a robust digital asset component. This involves creating a digital asset inventory, granting specific legal authority in your will and trust under New York’s RUFADAA law, and creating a secure, practical succession plan for your passwords and private keys.
Conclusion: From Myth to Reality
The world of estate planning is filled with myths that can lead to costly and heartbreaking consequences. But by understanding the reality, you can take control. You can ensure your plan is built on a foundation of legal truth, designed to withstand the challenges of the modern world. The most powerful step you can take is to move from assumption to action.
Do not let these myths dictate your family’s future. The end of 2025 is a critical time to act, especially with the monumental tax law changes on the horizon. At Morgan Legal Group, we are dedicated to providing the clarity and expertise you need to build a plan that is effective, efficient, and secure. Schedule a consultation today to bust the myths in your own plan and replace them with the peace of mind you and your family deserve.
For a helpful guide on the duties of an executor in New York, you can visit the resources provided by the New York State Unified Court System.
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