Which Assets Should and Shouldn't Go Into a Revocable Trust in New York

By Albert Goodwin, Esq., a New York estate planning and probate attorney admitted to practice in New York State. This guide focuses specifically on the funding decisions that make or break a New York revocable living trust. Last updated 2024.

Signing a revocable living trust is only half the job. A trust controls only the assets that are actually retitled into it — a process estate planners call funding. An unfunded trust avoids nothing; the assets still pass through Surrogate's Court probate. The harder and more valuable decision is knowing which assets to fund into the trust and which to deliberately leave out, because in New York the wrong move can trigger taxes, forfeit exemptions, or break a closely-held business's tax status. This page is the deep, New-York-specific resource on those funding decisions. For the broader case for a living trust, see our overview of the benefits of a living trust and how to avoid probate in New York.

Quick Reference: Fund It or Leave It Out

Putting New York Real Estate Into the Trust

Real estate is usually the reason a New Yorker sets up a revocable trust in the first place, because real property held in an individual's name passes through Surrogate's Court. Funding it involves these steps:

• Prepare a new deed transferring title from yourself as an individual to yourself "as Trustee of the [Name] Revocable Trust dated [date]."
• Record the deed where the property sits. In New York City (Manhattan, Brooklyn, Queens and the Bronx) deeds are recorded through the NYC Department of Finance / City Register (ACRIS); in Staten Island and in counties outside the City they are recorded with the County Clerk. Recording fees and a per-block/per-lot cover sheet apply.
• File transfer-tax forms. Even though a transfer to your own revocable trust is generally a non-consideration transfer, New York still requires Form TP-584 (combined real estate transfer tax return) and, in the City, Form RP-5217NYC (or RP-5217 outside the City). The transfer to your own grantor trust typically qualifies for an exemption, but the forms must still be completed.
• Notify your insurer and mortgage lender. The federal Garn–St. Germain Act (12 U.S.C. § 1701j-3) generally bars a lender from calling a residential loan due when an owner transfers to a revocable trust in which the borrower remains a beneficiary.

STAR, homestead and senior exemptions — the New York wrinkle

Before deeding a primary residence into a trust, confirm you will not lose property-tax benefits. New York's STAR exemption, Enhanced STAR for seniors, and the senior citizens (RPTL § 467) and veterans exemptions are generally preserved when a residence is held in a revocable trust for the benefit of the occupant-owner, but the assessor must be notified and the application reviewed so the exemption follows into the trust. For homestead creditor protection under CPLR § 5206, a properly drafted revocable trust for the benefit of the occupant typically preserves the protection, but this should be confirmed in drafting.

Bank and Brokerage Accounts

Retitling deposit and investment accounts is usually the simplest funding step. Each institution has its own forms, but in New York you will generally:

• Provide a Certification of Trust. Under EPTL § 7-2.9, a third party may rely on a certification of trust rather than demanding the full trust instrument, which keeps the dispositive terms private.
• Supply the trust's tax identification number — for a typical grantor revocable trust this is your own Social Security number while you are alive, not a separate EIN.
• Sign the institution's account-change paperwork and receive new statements titled in the name of the trust.

The account operates exactly as before. You write checks, deposit, and trade as usual; only the legal owner of record changes.

Why Retirement Accounts Stay Out

Do not retitle an IRA, 401(k) or 403(b) into a revocable trust. Changing the owner of a qualified retirement account is treated as a full distribution, making the entire balance immediately taxable as ordinary income. Instead, you name the trust (or named individuals) as the beneficiary of the account. The beneficiary designation, not the will or the trust funding, controls who receives the account at death.

If you do name a trust as beneficiary, drafting matters. Since the SECURE Act (and SECURE 2.0), most non-spouse beneficiaries must empty an inherited retirement account within 10 years. To preserve favorable treatment, the trust generally must be a "see-through" trust meeting the IRS conduit or accumulation requirements. This is a drafting decision to coordinate with your attorney, not something to attempt with a standard beneficiary form alone.

Life Insurance and Annuities

You can name a revocable trust as the beneficiary of a life insurance policy, and that is often a sensible choice when minor children or staggered distributions are involved — the death benefit is paid into the trust and administered under its terms, avoiding probate. But putting the policy ownership into a revocable trust accomplishes nothing for taxes: because you retain the power to revoke, the death benefit remains in your taxable estate.

The estate-tax tool for life insurance is an irrevocable life insurance trust (ILIT), which removes the death benefit from your estate but requires you to permanently give up control. Because New York has a separate estate tax (see below), an ILIT can matter for New York families well below the federal exemption. Annuities should likewise be left in place and the trust named as beneficiary; assigning an annuity into a trust can trigger penalties and accelerate taxable gain.

New York Estate Tax: Why Funding Choices Have Tax Stakes

New York imposes its own estate tax separate from the federal estate tax, and the New York exclusion amount is far lower than the federal one. New York also has a notorious "cliff": if a taxable estate exceeds 105% of the exclusion amount, the exclusion is lost entirely and the whole estate is taxed, not just the excess. A revocable trust by itself does not reduce the New York taxable estate — everything in a revocable trust remains fully includible because you kept control. If estate-tax reduction is a goal, the planning happens through credit-shelter (bypass) provisions, gifting, or irrevocable trusts layered on top of the revocable trust, not through the act of funding alone. See our overview of advanced New York estate planning techniques.

Closely-Held Businesses, S-Corp Stock and Other Special Assets

LLC and partnership interests. These usually can be assigned to your revocable trust, but check the operating or partnership agreement first; transfer-restriction and consent clauses may require approval from other members.

S-corporation stock. A revocable grantor trust is a permitted S-corporation shareholder during your life, and for a limited period after death. To avoid accidentally terminating the S election after death, the trust must be drafted to qualify (for example, as a Qualified Subchapter S Trust or Electing Small Business Trust). Get this right in drafting — an inadvertent termination is expensive to fix.

Vehicles. The New York DMV will retitle a vehicle into a trust, but it is rarely worth the effort for an ordinary car; small estates often have simpler options. Collector and high-value vehicles are a different calculation.

Tangible personal property. Art, jewelry, furniture and collectibles have no title document, so they are funded by a written assignment of personal property to the trust rather than by retitling.

Cryptocurrency and digital assets. A trust can hold digital assets, and New York's Fiduciary Access to Digital Assets law (EPTL Article 13-A) governs a fiduciary's access. The practical problem is key access — if your trustee cannot reach the private keys, the asset is effectively lost. Document access securely and separately from the public record.

What Happens to Assets You Forget to Fund

A pour-over will is the safety net for anything still in your individual name at death. It directs those assets into the trust — but only after they pass through Surrogate's Court probate. The pour-over will catches forgotten assets; it does not save them from probate. That is the whole point of diligent funding during life: the more you transfer now, the less your family has to probate later. For how that probate plays out in New York, see our sample NYC probate timeline.

How This Page Fits With Our Other Trust Resources

• Benefits of a living trust — whether a trust is right for you.
• Avoiding probate in New York — the goal funding serves.
• Working with a NYC trust attorney — the engagement process.
• Are trusts public record? — privacy compared with a will.

This page is our dedicated resource on the funding decision — which assets belong in the trust and which do not.

Discuss Your Funding Plan With a New York Estate Attorney

Funding decisions turn on facts the chart above can't see — your exposure to the New York estate-tax cliff, your business agreements, your beneficiary designations, and your STAR and homestead exemptions. Albert Goodwin is a New York attorney who handles estate planning and Surrogate's Court matters across Manhattan, Brooklyn, Queens, the Bronx, Staten Island, Long Island and Westchester. To review which assets should go into your trust, call 212-233-1233 or email [email protected]. Learn more about Albert Goodwin.

This article is for general information about New York law and is not legal or tax advice. Statutes and tax thresholds change; consult a licensed New York attorney about your specific situation.