A 30-Year Expert’s Guide to the 2025 NY Crisis
As an estate planning attorney in New York for over 30 years, I can tell you that 2025 is the single most critical year for estate planning I have ever witnessed. The landscape is not just shifting; it is about to fall off a cliff. Families who fail to act *now* will face consequences that will vaporize their legacies.
What is estate planning? It is not just “writing a will.” A true estate plan is a comprehensive legal strategy that answers three critical questions:
- Who receives my assets when I am gone?
- Who makes decisions for me if I am alive but incapacitated?
- How do we protect my life’s savings from being destroyed by taxes, probate court, and long-term care costs?
In 2025, that third question has become a five-alarm fire. Two massive “time bombs” are set to detonate, and most New Yorkers are not prepared. At Morgan Legal Group, we are sounding the alarm. This is not a “someday” task. This is a “do-it-today” emergency.
The Two-Front War: Why 2025 Planning is Different
For decades, estate planning focused on a single battle: avoiding probate. Today, you are fighting a two-front war. A modern, effective New York estate plan must defend your family from two distinct sets of threats.
Front #1: The Legacy Battle (Probate, Conflict & Incapacity)
This is the “traditional” part of estate planning. It involves creating wills and trusts to ensure your assets go to the right people, privately and efficiently. It also involves planning for your own incapacity to avoid a humiliating guardianship proceeding.
Front #2: The Asset Protection Battle (Taxes & Long-Term Care)
This is the 2025 crisis. Two seismic shifts are threatening to wipe out your wealth.
- The 2026 Federal Estate Tax “Sunset”: This is a direct threat to high-net-worth New Yorkers. The federal tax exemption is about to be cut in *half*.
- The 2025 NY Medicaid “Look-Back”: This is a direct threat to middle-class New Yorkers. The “golden age” of protecting your home from home care costs is ending.
This guide will give you the complete battle plan. We will cover the tools for the legacy battle, and then we will expose the “time bombs” and give you the legal solutions. Contact us to build your fortress.
Front #1: The Legacy Battle (Probate, Wills & Trusts)
This front is about control. Who controls your assets? Who controls your medical decisions? And who is in charge when you are gone? If you do not make these choices, a judge in Surrogate’s Court will make them for you.
The “Default” Plan: New York Intestacy Law
If you do nothing—no will, no plan—you have a plan. It is called New York Intestacy Law (EPTL 4-1.1). This is the “default” plan written by the state. It is rigid, public, and guarantees court intervention.
If you die without a will, the state dictates who gets your assets.
- If you have a spouse and children, your spouse gets the first $50,000 and half the remainder. Your children split the other half.
- If you have children but no spouse, your children get everything.
- If you have a spouse but no children, your spouse gets everything.
- If you have no spouse or children, your assets go to your parents, then your siblings, then more distant relatives.
Notice who is *not* on this list? Your long-term partner (if unmarried). Your favorite stepchild. Your best friend. Your chosen charity. Intestacy law does not care about your wishes. It guarantees your estate goes through a public, costly court process called an “Administration.”
The “Beginner” Plan: The Last Will and Testament
A Last Will and Testament is the most basic form of estate planning. It is a vital document. In your will, you can:
- Name your beneficiaries (who gets what).
- Nominate an Executor to manage your estate.
- Nominate a Guardian for your minor children.
A will is a massive step up from intestacy. However, it comes with a terrible, universal misunderstanding. As an attorney, this is the myth I must bust every single day.
The Great Misconception: A Will *Guarantees* Probate Court
Read that again. A will does *not* avoid probate. A will is the *key document* used to *begin* the probate process. It is a set of instructions for the Surrogate’s Court judge. It is a letter to the court, and it is your family’s ticket of admission to a public, costly, and slow legal proceeding.
The New York Probate Nightmare: Why You Must Avoid It
Probate is the formal court-supervised process of validating your will, paying your debts, and distributing your assets. In New York, it is a system to be avoided at all costs. It is a nightmare for the family you leave behind.
Nightmare #1: It is 100% Public
Probate is a public court proceeding. Your will becomes a public record. Anyone can go to the courthouse in Queens or the Bronx and read it. They can see a full inventory of your assets, their values, and who you left them to. This is a goldmine for scammers and a shocking invasion of your family’s privacy.
Nightmare #2: It is Painfully Slow
A “simple” probate in New York can take 9 to 18 months. A complex one can take years. During this time, your assets are *frozen*. Your family cannot sell the house. They cannot access your investment accounts. The estate is locked down until the court gives permission, leaving your heirs in a stressful financial limbo.
Nightmare #3: It is Shockingly Expensive
Probate is not free. Your estate must pay court filing fees, appraisal fees, and attorney’s fees. Most importantly, your Executor is entitled to a *statutory commission* based on the value of your estate. On a $1 million estate, this can be $34,000, plus tens of thousands in legal fees. This is money that should go to your family, not to the system.
Nightmare #4: It Invites Family Conflict
The probate process legally requires that all your “next of kin” be notified. This includes the disinherited son or estranged family member. You are literally sending them a legal invitation to come to court and contest the will. This launches a long, bitter family law battle, draining the estate of all its money and destroying family relationships.
The “Gold Standard” Plan: The Revocable Living Trust
This is the *real* solution. A Revocable Living Trust is the cornerstone of a modern New York estate plan. It is a private legal document that allows you to avoid probate entirely. Think of it as a private “company” you create to hold your assets.
You create the trust. You name yourself as the “Trustee” (the manager). You “fund” the trust by transferring your assets into it (e.g., a new deed for your house). While you are alive, you have 100% control. Nothing changes. But when you die, the magic happens.
Your “Successor Trustee” (e.g., your responsible child) immediately steps in. They read your private instructions and distribute the assets.
- There is no court.
- There is no judge.
- There are no public filings.
- There are no delays or frozen assets.
- It is 100% private.
A trust is the *only* tool that ensures your legacy is handled privately, quickly, and according to your exact wishes. It is the single best way to protect your family from the probate nightmare.
Front #1, Part B: The Incapacity Crisis (Guardianship)
What if you do not die? What if you have a stroke, an accident, or develop dementia? Who pays your bills? Who makes your medical decisions? A will does *nothing* for you while you are alive.
The “Must-Have” Incapacity Documents
A complete estate plan protects you during incapacity. You need these three documents:
- Durable Power of Attorney: This document appoints a financial “agent” to pay your bills and manage your assets if you cannot. Without this, your accounts are frozen.
- Health Care Proxy: This document appoints a medical “agent” to make medical decisions for you. Without this, doctors will not speak to your family, and you could receive treatment you never wanted.
- Living Will: This document states your end-of-life wishes (e.g., regarding life support). It guides your Health Care Agent’s hand.
The Nightmare You Avoid: Article 81 Guardianship
If you have no incapacity documents, your family must file an “Article 81 Guardianship” proceeding. This is a public court case where your family must prove to a judge that you are incompetent. It is a humiliating, expensive, and slow process. The judge may appoint a stranger to control your life and finances. A Revocable Trust, combined with a Power of Attorney, avoids this entirely. Your chosen Successor Trustee steps in automatically, with no court involved.
Front #2: The 2025-2026 Financial “Time Bombs”
This is the new front. This is the 2025 crisis. Two massive financial changes are here, and they threaten to destroy everything you have saved. One targets high-net-worth estates. The other targets the middle class.
Time Bomb #1: The 2026 Federal Estate Tax “Sunset” (For High-Net-Worth)
This is the most talked-about event in wealthy circles. The 2017 Tax Cuts and Jobs Act (TCJA) temporarily doubled the federal estate tax exemption. In 2025, that exemption is $13.61 million per person. On January 1, 2026, this law “sunsets.”
The exemption will be cut in half. It is projected to drop to around $7 million per person.
For a married couple in New York City with a $15 million estate, this is a catastrophe. Today, they owe $0 in federal estate tax. In 2026, their estate will be over the new ~$14 million combined limit. This triggers a 40% federal tax.
The New York “Double Whammy” (The NYS “Cliff” Tax)
New York has its *own* separate estate tax. The NYS exemption is $6.94 million. Unlike the federal tax, the NY tax has a “cliff.” If your estate is more than 105% of this limit (approx. $7.28 million), you do not just pay tax on the overage. You *lose the entire exemption* and pay tax from dollar one.
This “sunset” creates an urgent need for advanced planning. The “use it or lose it” strategy is to make large gifts *now*, in 2025, using the high exemption before it vanishes. We use sophisticated Irrevocable Trusts (like SLATs and ILITs) to move assets out of your estate, saving millions in taxes. This window is closing fast.
Time Bomb #2: The Imminent NY Medicaid “Look-Back” (For Middle Class)
This is the crisis that affects 90% of New Yorkers. This is about protecting your home and savings from long-term care costs. As we established, Medicare does not pay for long-term care. Medicaid does.
For decades, New York had a “golden age” of home care planning. We had “crisis” planning. Because there was *no look-back period* for Community (Home) Care, we could protect your home and assets today, and you could qualify for Medicaid tomorrow. This golden age is over.
New York has passed a law to implement a 30-month (2.5-year) “Look-Back” for home care. As of late 2025, this rule is imminent. It could be implemented *any day*. Once it is, crisis planning is dead. Any gift or transfer you made within the last 2.5 years will be penalized, and you will be denied care. This includes:
- Giving your house to your children.
- Giving your grandchild money for college.
- Adding a child to your bank account.
This rule change is a direct attack on the middle-class family home. The *only* way to protect your home now is to plan *in advance*.
The Solution: The Medicaid Asset Protection Trust (MAPT)
The solution is an Irrevocable Trust, commonly called a Medicaid Asset Protection Trust. You transfer your home and other assets into this trust *now*. This starts the look-back clock. After the period passes (5 years for nursing home, 2.5 years for home care), those assets are 100% protected. They are invisible to Medicaid. This is the *only* tool that protects your home from the $20,000/month cost of care *and* from Medicaid Estate Recovery (the “clawback”).
Case Studies: The Cost of Inaction in New York
As an attorney, I see the tragic results of failed plans every day. Here are the most common disasters.
Case Study 1: The Brooklyn “Will-Only” Probate Disaster
A family comes to us with their mother’s will. The estate is a $1.2 million brownstone and $300,000 in a bank account. One of the three children is disinherited. Because they only had a will, the estate *must* go to probate. The disinherited son files a contest. The estate is frozen for three years. The $300,000 in cash is eaten by $150,000 in legal fees. The family is forced to sell the home to pay the lawyers and is shattered by the conflict.
How a Trust Would Have Fixed It: A Revocable Trust is private. The disinherited son would not have been notified. He would have had no forum to contest. The house would have passed privately to the other children in a matter of weeks.
Case Study 2: The Queens “Joint Deed” Tax Trap
A loving mother adds her son to the deed of her home to “avoid probate.” She bought the home in 1980 for $100,000. It is now worth $1.1 million. She dies. The son inherits, and it does avoid probate. But he also inherits her $100,000 “cost basis.” When he sells the house for $1.1 million, he has a $1 million capital gain. He is hit with a $250,000+ tax bill.
How a Trust Would Have Fixed It: A trust preserves the “step-up in basis.” The son would have inherited the home *at its date-of-death value* ($1.1 million). He could sell it for $1.1 million and pay $0 in capital gains tax.
Case Study 3: The Long Island “No Plan” Medicaid Crisis
A couple in their 80s has a $700,000 home and $300,000 in savings. The husband needs home care. They have no trust. They are told they must “spend down” their $300,000 to qualify for Medicaid. They burn through their life savings in 18 months. When the husband dies, the state places a lien on the home to recover the money they spent. The wife is forced to sell.
How a Trust Would Have Fixed It: If they had created a MAPT 5+ years earlier, the home and savings would be 100% protected. They would have qualified for Medicaid *and* kept their entire $1 million legacy.
Your 2025 Estate Planning Checklist
Do not be one of these families. A complete estate plan is your only defense. Here is your 2025 checklist.
- Inventory Your Assets & Goals: What do you own? Who do you want to get it? Who do you trust?
- Assemble Your “Core 5” Documents:
- Revocable Living Trust (To avoid probate & guardianship).
- Pour-Over Will (The safety net for the trust).
- Durable Power of Attorney (For financial incapacity).
- Health Care Proxy (For medical incapacity).
- Living Will (For end-of-life wishes).
- Confront the “Time Bombs”:
- If your estate is over $7M, schedule a call to discuss urgent 2025 tax-gifting strategies.
- If you are over 60, schedule a call to discuss a Medicaid Asset Protection Trust before the look-back hits.
- Fund Your Trust: This is the most critical step. A trust is an empty box. You must re-title your assets into its name. A good law firm manages this for you.
- Review Your Plan: Life changes. Your plan must be reviewed every 3-5 years.
Why You Cannot Use an Online Form (The NY Expert Advantage)
You may be tempted to use a “DIY” legal website. In New York, this is a recipe for disaster. Online forms do not understand New York’s unique and complex laws.
- They do not know how to handle a New York Co-op, which has specific rules for trust funding.
- They do not understand the NYS “Cliff” Tax and how it interacts with federal law.
- They cannot advise you on advanced elder law strategies like “Spousal Refusal.”
- They cannot protect you from elder abuse.
As an attorney, I, Russel Morgan, Esq., have 30 years of experience. My job is not to sell you a document. My job is to provide counsel. My team has seen every trap and every opportunity. Our clients, as you can see from our Google reviews, feel a sense of relief knowing their plan is built by experts.
Your Legacy Is a Choice, Not a Guarantee
Understanding estate planning in 2025 means understanding the urgency. The rules are changing. The windows for protection are closing. Doing nothing is a choice. It is a choice to let a judge, the IRS, or a nursing home take control of your legacy.
A proper plan is your declaration of control. It is the fortress you build around your family. It protects them from the court, from taxes, from creditors, and from conflict. It is the greatest gift you can leave them.
Contact Morgan Legal Group Today
Do not wait for the 2026 sunset. Do not wait for the Medicaid look-back to become law. The time to plan is now. Schedule a consultation with the expert team at Morgan Legal Group. We serve clients across New York State, from Rochester to Westchester and all five boroughs. Let us build your fortress today.
For more information on New York’s probate and estate laws, you can review the official New York Estates, Powers & Trusts Law (EPTL).
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