Putting Your House, Co-op or Condo in a Trust in New York: Pros, Cons and Process

By Albert Goodwin, Esq., a New York-licensed attorney whose practice covers estate planning, trusts and Surrogate's Court matters. Last reviewed: 2025. Dollar figures and program rules change, so confirm current numbers before acting.

This page covers one narrow question: should you move your New York home into a trust, and if so, how? It covers one- to four-family houses, co-op apartments, condos and small rental buildings. It explains the New York deed and transfer-tax paperwork, how a revocable trust differs from a Medicaid asset protection trust for a home, and the tax and practical drawbacks that general trust overviews skip.

For the general case for trusts, see our page on the benefits of a living trust. For probate in general, see how to avoid probate in New York. For other property types, see which assets can and cannot go into a revocable trust.

The Two Trusts New Yorkers Use for a Home

Most New York homeowners who put a residence in a trust use one of two structures. They solve different problems, and choosing the wrong one is the most common planning mistake.

• Revocable living trust: You keep full control. You can sell, refinance, change beneficiaries or take the property back at any time (EPTL 7-1.16). The home stays your asset for income tax, estate tax, Medicaid and creditor purposes. The main payoffs are avoiding probate for the home and letting a successor trustee manage it if you become incapacitated.
• Medicaid asset protection trust (MAPT): This is an irrevocable trust in which you can keep the right to live in the home and receive any income, but you cannot receive principal. A trustee, usually an adult child, holds title. If the transfer happens more than 60 months before you apply for nursing-home Medicaid, the home is generally not counted as your resource. In exchange, you give up the ability to take the house back or direct a sale for your own benefit.

A third option, deeding the house outright to children, sometimes with a retained life estate, is still used. It carries the tax and creditor risks discussed below, which is why many New York attorneys now prefer a MAPT for the same goal.

How a Trust Is Created and Funded Under New York Law

Signing a trust agreement does not move your house into it. New York requires two separate steps:

1. Valid trust instrument: A lifetime trust must be in writing and signed by the creator and at least one trustee. The signatures must be acknowledged before a notary or witnessed by two witnesses (EPTL 7-1.17).
2. Transfer of title: Property is trust property only once it has been transferred to the trustee (EPTL 7-1.18). For a house or condo, that means a new deed. For a co-op, it means an assignment of the shares and proprietary lease.

An unfunded trust is a frequent problem in Surrogate's Court. If the deed was never recorded, the home usually passes under your will or by intestacy and goes through probate anyway. A pour-over will can send it to the trust, but only after probate.

Step by Step: Transferring a New York House or Condo to a Trust

1. Order a title search: Confirm exactly how title is held now: sole name, joint tenants, tenants in common, or tenancy by the entirety. Check for existing mortgages, liens and the legal description.
2. Prepare the deed: The deed usually runs from you, as owner, to you or another person "as Trustee of the [Name] Revocable Trust dated [date]." A bargain and sale deed with covenants is common, so any title covenants carry over.
3. Prepare the transfer-tax returns: Every New York deed needs the state Combined Real Estate Transfer Tax Return, form TP-584. A transfer into your own revocable trust, or a gift into a MAPT, generally involves no consideration, so state transfer tax is usually zero (Tax Law Article 31). The return must still be filed. In the five boroughs, the NYC Real Property Transfer Tax return (NYC-RPT) is also required, and the same no-consideration analysis usually applies. If the property is mortgaged, have your attorney confirm how the returns should report it.
4. File the RP-5217: The Real Property Transfer Report goes to the state for assessment purposes. In New York City it is completed as the RP-5217NYC through ACRIS. Outside the city it is filed with the county clerk along with the deed.
5. Add NYC-specific items: For one- and two-family homes in the city, a smoke and carbon monoxide detector affidavit accompanies the deed.
6. Record the deed: In Manhattan, the Bronx, Brooklyn and Queens, the deed and tax forms are prepared in ACRIS and recorded with the NYC Department of Finance, Office of the City Register. On Staten Island and in Nassau, Suffolk, Westchester and other counties, the county clerk records the deed. Recording and filing fees apply.
7. Follow up after recording: Notify your homeowners insurer, your lender, the assessor or NYC Department of Finance about property-tax exemptions, and your title insurer. Each is covered below.

The deed is public once recorded. The trust agreement itself is not, as explained on our page on whether trusts are public record.

What Happens to the Home After Death or Incapacity

Some trust guides describe a short affidavit filed with a "county recorder" to move a house out of a trust after death. That is how some other states work. It is not the New York procedure.

In New York, title is already in the trustee's name during your life. When you die, the successor trustee named in the trust takes over without any court appointment. To pass the home to a beneficiary, the successor trustee signs a new deed from the trustee to that beneficiary. If the house is being sold, the trustee signs a deed to the buyer. That deed is recorded through ACRIS or the county clerk with a new TP-584, NYC-RPT where applicable, and RP-5217. Title companies usually ask for the death certificate and the relevant trust pages showing the successor trustee's authority.

No probate petition is needed for the house, and family members do not have to wait for letters testamentary before they can act. Our page on access to a house after the owner's death explains the problems that arise when a home is not in a trust. For apartments, see access to an apartment after death.

If you become incapacitated, the successor trustee steps in under the trust's incapacity provisions, which typically require a physician's letter. Without a trust or a valid power of attorney, your family may need an Article 81 guardianship under the Mental Hygiene Law to sell or refinance your home. A trust controls only trust property, so it works alongside a power of attorney and health care proxy. Our advance directive page covers those documents.

Co-ops: Shares and a Proprietary Lease, Not a Deed

Most New York City apartment owners hold co-op shares rather than real property. You cannot record a deed for a co-op. Transferring it to a trust means assigning your stock certificate and proprietary lease to the trustee, and that raises issues a house does not.

• Board consent: Almost every proprietary lease requires board approval for an assignment. Many boards have a trust policy and a package of forms. Some ask for the trust agreement and a guaranty from you personally. Boards are usually more willing to approve a revocable trust where the shareholder keeps living in the unit than an irrevocable MAPT.
• Lender consent: If there is a share loan, the lender holds your stock and lease as collateral under a recognition agreement with the co-op. You need the lender's consent, and sometimes an amended recognition agreement.
• Transfer taxes and flip taxes: Co-op transfers are subject to the NYS and NYC transfer-tax filings even when no tax is due. Check whether the building's flip tax applies. Many buildings waive it for transfers to the shareholder's own trust, but not all do.
• Building paperwork: The managing agent issues new shares and a new or assigned lease in the trustee's name. Keep those originals with your trust documents.

If the board refuses, a trust is not the only tool. Some co-op owners use a transfer-on-death approach where the building permits it, or rely on a will and accept probate for that one asset.

Condos

A condo unit is real property, so the deed, ACRIS and tax-form steps above apply. Before signing, review the declaration and bylaws. Many condos have a right of first refusal on transfers. Boards routinely waive it for a transfer to the owner's own trust, but you need the waiver letter, and the title company will look for it. Notify the managing agent so common-charge statements and the board's records show the trustee.

Multi-Family and Rental Property

Small owner-occupied two- to four-family homes are common in Brooklyn, Queens and the Bronx. They can go into a trust the same way as a single-family house. A few points differ:

• Leases continue. Tenants' rights, including rent-stabilized tenancies, are not affected by a transfer to the owner's trust. Update rent-collection accounts and, where required, HPD property registration.
• The mortgage protection discussed below applies only to residential property with fewer than five dwelling units.
• For investment buildings, owners often hold the property in an LLC for liability purposes and place the LLC membership interests in the trust instead of deeding the building itself. Read the operating agreement and loan documents before assigning the interests.

Jointly Owned Homes and Tenancy by the Entirety

Married couples in New York often own their home as tenants by the entirety (EPTL 6-2.2). That form already passes the home to the surviving spouse without probate and gives limited protection from one spouse's individual creditors. Deeding the home to a trust ends the tenancy by the entirety.

For some couples that trade is worth it, because the trust avoids probate after the second death and covers incapacity. Other couples keep the tenancy by the entirety and fund the trust later, or plan for the survivor to deed the home into the trust. Unmarried co-owners, siblings or parents and children face different issues. See our page for an attorney for a house in two names.

Medicaid and the Home: What a MAPT Does and Does Not Do

Medicaid planning is the most misunderstood reason to put a home in a trust. The New York rules, mostly found in Social Services Law §366 and §369, 18 NYCRR Part 360 and the Department of Health's Medicaid Reference Guide, work as follows.

The home exemption has conditions

A home is generally an exempt resource for Medicaid eligibility if you live there or intend to return, or if your spouse or a dependent relative lives there. The exemption is subject to a home-equity limit that New York adjusts each year. It has been above $1 million in recent years. The equity limit does not apply while a spouse, a minor child, or a blind or disabled child lives in the home (42 U.S.C. §1396p(f)). An exempt home is still exposed to estate recovery after death.

A revocable trust gives no Medicaid protection

Assets in a revocable trust are treated as yours because you can take them back (42 U.S.C. §1396p(d)). A revocable trust does nothing to shelter a home for eligibility purposes.

How the MAPT works

In a typical New York MAPT, you transfer the home to an irrevocable trust and give up any right to principal. You keep the right to live there, receive income, and pay the carrying costs. A child or other trusted person serves as trustee. Trusts are commonly drafted so you keep a limited power to change which family members ultimately receive the property, and so the trust is a grantor trust for income-tax purposes.

The lookback period

Transferring the home to a MAPT is a transfer of assets. If you apply for nursing-home Medicaid within 60 months of the transfer, the value of the home can trigger a penalty period of ineligibility. After 60 months, the trust assets are generally not counted. New York law also provides for a 30-month lookback for community-based long-term care, such as home care. Its implementation has been delayed, so confirm the current status before relying on it either way. A MAPT works best when it is set up years before care is likely to be needed.

Exempt transfers of the home

Some transfers of a home carry no penalty at all. These include transfers to a spouse, to a child under 21 or a blind or disabled child, to a sibling with an equity interest who lived there at least a year before your institutionalization, and to a child who lived in the home and provided care for at least two years that kept you out of a nursing home (42 U.S.C. §1396p(c)(2)(A); SSL §366). If one of these applies, a trust may be unnecessary.

Estate recovery

New York generally limits Medicaid estate recovery to the probate estate, meaning assets that pass under a will or by intestacy. A home that passed through probate after the owner received Medicaid can be subject to a claim, with exceptions such as a surviving spouse or a minor or disabled child. A home properly held in a MAPT does not pass through the probate estate. In limited circumstances, the state can also place a lien during life on the home of a permanently institutionalized recipient (SSL §369). Recovery rules can change, so a plan should not depend on this point alone.

For Medicaid planning for a disabled family member, see the benefits of a special needs trust.

Tax Consequences You Need to Plan For

Capital gains and basis step-up

When an owner dies holding a home, the heirs generally receive a basis equal to the value at death (IRC §1014). That can erase decades of appreciation, which matters in New York, where many homes were bought for a small fraction of their current value.

• Revocable trust: The home is included in your estate, and beneficiaries get the step-up.
• MAPT: A properly drafted MAPT keeps your right to live in the home, which causes estate inclusion under IRC §2036, so beneficiaries still get the step-up. Drafting matters. A poorly drafted irrevocable trust can lose it.
• Outright gift to children: The children take your original basis (IRC §1015). If they sell after your death, they may owe capital gains tax that a trust would have avoided.

If the home is sold during your life, a grantor trust where you meet the ownership and use tests can generally still claim the $250,000 or $500,000 home-sale exclusion under IRC §121.

New York estate tax

A revocable trust neither reduces nor increases New York estate tax. The home's value counts toward your taxable estate either way. New York's exclusion amount is adjusted annually, and its "cliff" means estates modestly above the exclusion can lose it entirely. If your total estate is near that range, review advanced New York estate planning techniques.

Gift tax

A transfer into a revocable trust is not a gift. A transfer into a MAPT is commonly drafted to be an incomplete gift for federal purposes. Your attorney should confirm whether any gift-tax return is advisable.

Property-Tax Exemptions: STAR, Senior and Veterans

Recording a new deed can cause the assessor or the NYC Department of Finance to review or remove existing exemptions. Homes held in a trust can generally keep STAR, the senior citizen exemption (RPTL §467) and veterans exemptions when the person living there is a trust beneficiary who would otherwise qualify. You may need to submit the trust or file a new application. Owners who had the STAR exemption should ask whether the transfer will move them to the STAR credit program. Confirm the result with the assessor or DOF before recording, because a lost exemption can cost more each year than the trust saves.

Mortgages, Title Insurance and Homeowners Insurance

• Mortgage: The Garn-St Germain Act bars a lender from enforcing a due-on-sale clause when you transfer residential property with fewer than five units into a living trust where you remain a beneficiary and occupant (12 U.S.C. §1701j-3(d)(8)). That protection fits revocable trusts and many MAPTs. Notify the lender anyway. Refinancing a trust-owned home is usually possible, but some lenders review the trust or ask that title be temporarily deeded back.
• Title insurance: Ask your title insurer whether your existing owner's policy continues to protect the trustee, or whether an endorsement is needed. Do this before you record the deed.
• Homeowners insurance: Add the trustee and trust as named or additional insureds. A claim on a policy issued only to you individually, for a home titled to a trustee, invites a dispute.

Creditor Protection

A revocable trust offers no protection from your own creditors. New York treats a trust you can revoke for your own benefit as reachable by them (EPTL 7-3.1). An irrevocable trust from which you cannot receive principal can protect the home from future creditors. A transfer made to avoid existing or expected creditors can be undone under New York's Uniform Voidable Transactions Act (Debtor and Creditor Law Article 10).

Rule Against Perpetuities and Long-Term Trusts

Some families want the home held in trust for a surviving spouse and then for children or grandchildren. New York still follows the common-law rule against perpetuities. Under EPTL 9-1.1, an interest must vest no later than 21 years after the death of one or more people alive when the trust was created. A trust can therefore last for the lifetimes of people living at its creation plus 21 years, but not indefinitely. Trusts that keep a home in the family for long periods need careful drafting so the remainder interests are valid.

Costs and Drawbacks

A trust is not right for every homeowner. The costs and burdens include:

• Legal fees to draft the trust and prepare the deed or co-op assignment, plus recording and filing fees and possible title charges.
• Co-op board review, possible fees and the risk of refusal.
• Ongoing upkeep: refinancing, selling or changing insurance takes more paperwork.
• With a MAPT, a permanent loss of control. You cannot take the house back, and a sale requires the trustee's cooperation. The proceeds stay in the trust.
• Dependence on the trustee. A MAPT trustee who mismanages or refuses to cooperate can cause family conflict. See our page on a beneficiary living in an inherited house for the disputes that follow.
• Possible loss of tenancy-by-the-entirety protection or property-tax exemptions if the transfer is not handled carefully.

Compare those costs with probate. Surrogate's Court filing fees run on a scale up to $1,250 (SCPA 2402). Executors are entitled to statutory commissions (SCPA 2307), and there are attorney fees and months of delay. A New York City probate often takes many months, longer if there is a contest. Our sample NYC probate timeline shows the stages.

Deciding Whether to Put Your Home in a Trust

A revocable trust for the home tends to make sense if:

• You own property in more than one state, so a trust avoids an ancillary probate elsewhere.
• You are single or widowed, and the home would otherwise go through Surrogate's Court.
• You want a named person able to manage or sell the home promptly if you become incapacitated.
• You expect a will contest or want privacy for the terms of who inherits.

A MAPT tends to make sense if:

• You are healthy enough that nursing-home care is unlikely in the next five years.
• You have other assets or income to live on and do not need to borrow against or sell the home for yourself.
• You have a trustworthy trustee and a family that agrees on the plan.

A trust may not be worth it if:

• You and your spouse own the home as tenants by the entirety and the survivor can plan later.
• An exempt transfer under the Medicaid rules is available, such as to a caregiver child.
• Your co-op board will not approve a trust and you are not prepared to fight it.
• Care is likely to be needed within the lookback period, so a MAPT would not protect the home in time.

Hypothetical example

The following is an illustration only, not a client matter. A widowed Queens homeowner in her early seventies owns a two-family house bought decades ago. She is in good health, rents the second unit and wants the house to go to her two children. A revocable trust would avoid probate but give no Medicaid protection. A MAPT with a retained right to live in the home, a child as trustee and a provision keeping the trust within IRC §2036 could do three things: start the 60-month clock, preserve the step-up in basis for the children, and keep the rental income flowing to her. She would need to confirm her senior and STAR exemptions with DOF and notify her lender and insurer. She would also accept that she can no longer take the house back. Different facts, such as a pending diagnosis or a single child already living there as caregiver, could point to a different answer.

Frequently Asked Questions

Does putting my house in a trust trigger New York transfer tax?

Usually not. A transfer to your own revocable trust or a gift to a MAPT has no consideration, so state and NYC transfer tax is generally zero. The TP-584, NYC-RPT where applicable, and RP-5217 must still be filed. Mortgaged property needs a closer look.

Can I still sell or refinance?

With a revocable trust, yes. You act as trustee and sign the documents. With a MAPT, the trustee can sell, and the proceeds stay in the trust. The trust can buy a replacement home. Refinancing a MAPT property is harder and depends on the lender.

Does a trust protect my home from creditors?

A revocable trust does not. An irrevocable trust can protect against future creditors if you cannot reach principal and the transfer was not made to defeat existing creditors.

What happens to my STAR exemption?

It can generally be kept when a qualifying beneficiary lives in the home, but the recorded deed may trigger a review. Contact the assessor or NYC Department of Finance before or right after recording.

Will my beneficiaries owe capital gains tax?

With a revocable trust or a properly drafted MAPT, beneficiaries generally receive a stepped-up basis at your death. Outright gifts during life do not get one.

Do I still need a will?

Yes. A pour-over will catches assets left outside the trust and names a guardian for minor children. See our page on hiring an attorney for a trust in NYC for how the documents fit together.

Talk to a New York Trust Attorney

The right structure depends on how you hold title, whether you own a house, co-op or condo, your health and your family. We can review your deed or co-op documents, explain the Medicaid and tax trade-offs, and prepare and record the transfer. The Law Offices of Albert Goodwin has offices in Manhattan, Brooklyn and Queens. Call 212-233-1233 or email [email protected].

This page provides general information about New York law and is not legal advice. Statutes, Medicaid rules and tax figures change, and the right choice depends on your facts. Consult an attorney before transferring property.