New York Estate Planning — What Retirees Need to Know in 2026
New York levies a state estate tax on estates above $7,350,000, which catches many middle-class retirees off guard. Probate costs 4–8% of your gross estate and takes 9–15 months on average — costs that can be avoided with the right documents in place. New York recognizes TOD deeds, giving residents cost-effective ways to transfer real property outside of probate. Medicaid estate recovery in New York is expanded — the state can recover from assets that passed outside of probate, including TOD deeds and some trust accounts. Advanced planning is essential.
Key New York Estate Planning Facts for 2026
| Topic | New York Rule | Risk Level |
|---|---|---|
| State Estate Tax | Yes | Review |
| State Inheritance Tax | None | Low |
| Probate Cost Estimate | 4–8% · 9–15 months | Moderate |
| Medicaid Look-Back Period | 60 months (5 years) for asset transfers | High |
| Homestead Exemption | $89,975–$179,950 (county-specific) | Protective |
| Lady Bird Deeds | No | Not Available |
| TOD Deeds | Yes (TOD Deed) | Protective |
| Asset Protection Trust | No | Gap |
| Power of Attorney | notarization required | Required |
New York Probate: What It Costs and How to Avoid It
New York uses its own probate code, which can make the process more structured and court-supervised than UPC states. Even so, probate still costs 4–8% of gross estate value and takes 9–15 months on average. Estates under $50,000 (personal property only) may qualify for a simplified affidavit process.
- Revocable Living Trust Assets properly funded into a trust pass outside probate and remain private. Typical cost range: $3500–$6000.
- TOD Deed Expanded estate recovery state; TOD deed does not protect home from Medicaid. TOD deed took effect 7/19/2024 with 18-month creditor clawback provision.
- Joint Ownership Planning Joint tenancy structures can avoid probate but may create tax or creditor exposure. Review before implementing.
- Small Estate Affidavit Available for estates under $50,000 (personal property only). Waiting period: 30 days.
*Estimates derived from New York probate and Medicaid data. Educational use only.
Medicaid Asset Protection: New York's 60-Month Rule Explained
New York follows federal Medicaid rules with a strict 60-month look-back period. Any asset transfer for less than fair market value within that window can trigger a penalty period. Warning: New York uses expanded estate recovery, meaning Medicaid can recoup from assets that passed outside of probate.
- Medicaid Trust Planning Assets placed in a properly structured irrevocable trust may be protected after the 60-month look-back expires.
- Spousal Asset Protection Community spouse resource allowance for 2026: $162,660.
New York Estate Planning Checklist — What to Do Next
| Priority | Action | Cost Range | Impact |
|---|---|---|---|
| High | Update all beneficiary designations | $0 | Avoids unintended probate transfer |
| High | Execute Durable Power of Attorney | $400–$800 | Protects during incapacity |
| Medium | Create Revocable Living Trust | $3500–$6000 | Full probate avoidance |
| Medium | Elder Law Consultation | $400–$600 | Reduce Medicaid exposure |