Estate Planning for Married Couples in New York

Married couples have planning advantages that single individuals don't — the unlimited marital deduction, portability of federal exemptions, joint trust structures, and the right to control what happens to assets both during and after the marriage. But New York adds complexity that most couples don't anticipate: a state estate tax with a much lower exemption than the federal level, an elective share right that can override even carefully drafted wills, and pitfalls in joint ownership that can unravel years of planning in a single transaction. Getting this right matters.

Start With What You're Actually Trying to Accomplish

Before we talk about trusts and tax strategies, let's talk about goals. Most married couples in New York want three things from their estate plan:

1. If one spouse dies, the surviving spouse should be fully provided for
2. When both spouses are gone, assets should pass to their children (or other chosen beneficiaries) efficiently — without unnecessary taxes, without probate delay, and without family conflict
3. If either spouse becomes incapacitated, the other should be able to manage all assets without going to court

Those three goals sound simple. The challenge is that New York law and federal tax law don't make it easy to achieve all three simultaneously without intentional planning. The tools that maximize protection for the surviving spouse sometimes conflict with the tools that minimize estate taxes. Joint ownership avoids probate but creates exposure to creditors. The marital deduction defers taxes but doesn't eliminate them.

A good estate plan finds the right balance for your specific situation. What follows is a guide to the key tools and how they interact.

The Marital Deduction: Your First Line of Defense

Both federal law and New York law allow assets to pass between spouses free of estate tax — this is the marital deduction. The transfer can happen outright (you leave everything to your spouse directly) or in a qualifying trust. There's no dollar limit on the marital deduction for U.S. citizen spouses.

This is why simple "I love you" wills — where each spouse leaves everything to the other, and then to the children — work reasonably well for couples without significant estate tax concerns. The first death generates no estate tax regardless of how large the estate is, because the marital deduction covers everything. The problem comes at the second death, when the marital deduction is no longer available and the full combined estate is potentially taxable.

In 2026, the federal exemption is approximately $13.6 million per person. The New York State exemption is only $7.16 million. If your combined estate exceeds these thresholds — or if the federal exemption sunsets to approximately $7 million per person after 2025, as was anticipated under prior law — a more sophisticated approach is required.

Joint Revocable Trusts: How They Work for Married Couples

A joint revocable trust is a single trust document signed by both spouses together. Both spouses are co-trustees and co-grantors. All jointly owned assets are transferred into the trust, and the couple manages them together exactly as they did before.

When one spouse dies, the trust typically splits into separate shares. The deceased spouse's share may become irrevocable and flow into one or more subtrusts (we'll discuss those below). The surviving spouse's share continues in the revocable trust, which they can modify as their own.

The primary advantages of a joint revocable trust over simple wills are:

• Assets in the trust pass to the surviving spouse and then to children without going through Surrogate's Court probate — saving time, cost, and publicity
• The trust provides seamless management if either spouse becomes incapacitated, without requiring a court-appointed guardian or separate power of attorney proceedings
• The trust works across state lines, which matters for couples who own real property in multiple states

For more on the probate-avoidance benefits of trust structures, see our guide on how to avoid probate in New York.

The Key Subtrust Structures: A, B, and QTIP

When a married couple has estate tax concerns — or wants to ensure that children from a prior marriage are protected — the joint trust typically divides at the first death into one or more subtrusts. The most common structures are:

The Credit Shelter Trust in Practice

Here's why the Credit Shelter Trust (B Trust) matters so much in New York. Suppose a couple has $14 million in total assets. Without a credit shelter trust, everything passes to the surviving spouse at the first death via the marital deduction. When the surviving spouse dies, the entire $14 million is potentially taxable. The deceased spouse's exemption went unused.

With a credit shelter trust, the deceased spouse's $7.16 million New York exemption (and approximately $13.6 million federal exemption) is captured in the B Trust at the first death. That trust is never included in the surviving spouse's taxable estate — so it passes to the children completely free of estate tax at the second death. Any appreciation inside the trust over the years also escapes estate tax. For a couple with significant assets, this structure can save hundreds of thousands of dollars in New York estate taxes.

QTIP Trusts and Second Marriages

The QTIP trust is the go-to tool for couples in second marriages with children from prior relationships. A husband with three children from his first marriage wants to provide for his second wife — but he also wants to ensure that his children ultimately receive his assets. A simple outright bequest to the surviving wife doesn't guarantee that outcome. She could remarry, change her own estate plan, or simply spend the assets down over the years.

The QTIP trust solves this. The wife receives all the income from the trust during her lifetime — she's fully provided for. But when she dies, the remainder passes to the husband's children from his first marriage, exactly as he specified. She can't change the remainder beneficiaries. This structure qualifies for the marital deduction, so there's no estate tax at the first death.

For a deeper look at blended family planning challenges, our article on estate planning for blended families in New York addresses many of these dynamics.

Understanding New York's Elective Share Right

This is one of the most important — and most frequently overlooked — aspects of estate planning for married couples in New York. Under New York Estates, Powers and Trusts Law Section 5-1.1-A, a surviving spouse has the right to claim an "elective share" of the deceased spouse's estate regardless of what the will says.

The elective share in New York is one-third of the net estate if the deceased spouse left descendants, or one-half if they didn't. More importantly: the elective share applies to the "testamentary substitute" — assets that pass outside the will, including jointly held property, pension benefits, pay-on-death accounts, and certain gifts made within one year of death.

Why does this matter? Suppose a husband wants to leave most of his estate to his children from his first marriage, leaving only the minimum required to his second wife. If that minimum is less than the elective share, she can elect to take the statutory share instead — overriding his plan entirely.

On the flip side: if a couple is considering a more aggressive estate tax plan that significantly reduces what passes to the surviving spouse (for example, using large irrevocable trusts during lifetime), the elective share creates a floor below which the surviving spouse's share cannot fall. This must be factored into any plan that doesn't provide the surviving spouse with full access to all assets.

Spousal Lifetime Access Trusts (SLATs): Removing Assets While Retaining Access

For high-net-worth couples who want to remove assets from their taxable estate while still allowing the surviving spouse to benefit from them, a Spousal Lifetime Access Trust (SLAT) is a powerful — and technically complex — option.

Here's how it works: Spouse A creates an irrevocable trust and funds it with assets that come from Spouse A's separate estate. Spouse B is a discretionary beneficiary of the trust. Because the trust is irrevocable and Spouse A doesn't retain control, the assets are removed from Spouse A's taxable estate. But because Spouse B can receive distributions, the couple indirectly retains access to the funds.

SLATs are particularly attractive right now because of the large federal exemption. Couples who fund SLATs during a high-exemption period lock in the benefit even if the exemption later decreases — a strategy known as "exemption capture." See our guide on estate planning for high net worth individuals in New York for more on this and similar strategies.

The risks are real. If Spouse B dies first, Spouse A loses the indirect access to the trust assets — forever. If the couple divorces, Spouse A loses the assets entirely. These trusts can't be undone. They require careful drafting, proper funding, and ongoing compliance with trust administration requirements.

Beneficiary Designations: The Part of Your Estate Plan That Overrides Everything Else

This is where I see perfectly drafted wills and trusts get undermined by a single oversight. Retirement accounts, life insurance policies, and bank accounts with pay-on-death designations pass outside your will and trust — directly to whoever is named as beneficiary, regardless of what your will says.

Common mistakes married couples make with beneficiary designations:

• Naming their estate as beneficiary of a retirement account (creating a taxable event and eliminating the stretch provisions)
• Failing to update designations after remarriage (an ex-spouse named years ago may inherit)
• Naming minor children directly instead of a trust (requiring court supervision of the funds until age 18)
• Forgetting to name a contingent beneficiary (if the primary beneficiary predeceases you, the account defaults to your estate)

A complete estate plan for married couples includes a full review and update of every beneficiary designation — retirement accounts, life insurance, annuities, and any bank or investment accounts with transfer-on-death designations. This isn't optional and it isn't a secondary consideration. It's as important as the will and trust themselves.

Incapacity Planning: Powers of Attorney and Healthcare Documents

Estate planning for married couples isn't just about what happens when you die. It's about what happens if either of you becomes incapacitated first.

Under New York law, a spouse doesn't automatically have the legal authority to manage their partner's finances or make medical decisions if the partner can't. Without a durable power of attorney and healthcare proxy, the other spouse may have to go to court under Article 81 to get that authority. That process takes months, costs thousands of dollars, and involves ongoing court oversight.

Every married couple needs these documents:

• A durable power of attorney naming the spouse as agent for financial matters
• A healthcare proxy naming the spouse as agent for medical decisions
• A living will documenting end-of-life care wishes

These are simple documents compared to trusts. There's no excuse not to have them. If your documents were drafted before 2021, New York made significant changes to the statutory short form power of attorney — you should have your attorney review whether an update is advisable.

When You Should Review or Update Your Plan

Estate plans aren't one-and-done. For married couples, a review makes sense when:

• You marry or remarry
• You have or adopt a child
• A spouse dies (obviously) or you divorce
• Your net worth increases significantly — especially if you cross the New York $7.16 million threshold
• You acquire real estate in another state
• A named beneficiary, executor, or trustee dies or becomes unavailable
• Tax law changes materially (the federal exemption is scheduled to change after 2025)
• You or your spouse receives a significant inheritance

If your existing plan was drafted more than five years ago, a review is almost certainly warranted. New York law changes, tax law changes, and your life circumstances change. An outdated plan can be worse than no plan at all — it creates false confidence while leaving real gaps.

For more on the full range of planning strategies available to New York couples, visit Morgan Legal NY's estate planning resource page.