Buying property in New York is one of the most significant financial decisions you will make. Looking to the future, you can protect assets with a trust. Without one, your property may go through a lengthy and costly probate process when you die, your heirs may face unexpected tax exposure, and your home could be vulnerable to Medicaid estate recovery if you ever need long-term care.
When most people buy property in New York, the last thing on their mind is what happens to it when they die. But the decisions you make now, including how the property is titled and whether it is held in a trust, determine whether your home passes smoothly to your family or gets tied up in court for months.
Below, estate planning attorney Rich Jordan from Seligson Law explains the main types of trusts used to protect New York real estate, what each one does, and how to choose the right approach for your situation.
Why Property Ownership in New York Creates Estate Planning Risk
New York real estate comes with several estate planning risks that most new buyers do not anticipate.
Probate
If you own your property in your own name and you die, your home becomes part of your probate estate. In New York, probate takes place in the Surrogate’s Court in the county where you lived.
The process is public, can take months or longer, and involves court and attorney fees that are paid from the estate before your family receives anything. During that time, your family might not be able to sell or transfer the property without court approval.
Estate tax exposure
New York has its own estate tax with a $7.35 million exemption for 2026 and a cliff rule that can make crossing that threshold far more expensive than most people expect. For many New York City homeowners, the value of their property combined with other assets can push their estate close to or above that threshold.
Medicaid estate recovery
If you ever need long-term nursing home care in New York, Medicaid may pay for that care and then seek reimbursement from your estate after you die. Your home is one of the primary targets for that recovery.
Without a plan in place, the property you bought and paid off over decades could be used to reimburse the state rather than passing to your family.
The Two Main Types of Trusts for New York Property
There is no single trust that is right for every situation. The choice between a revocable living trust and an irrevocable trust depends on what you are trying to protect against.
Revocable living trust
A revocable living trust is the most commonly used tool for avoiding probate on New York real estate. You transfer your property into the trust, but you remain in full control as the trustee. You can live in the home, sell it, refinance it, or change the terms of the trust at any time. Nothing about your day-to-day life changes.
When you die, your successor trustee distributes the property to your named beneficiaries privately and without court involvement. There is no probate, no public record, and no delay waiting for Surrogate’s Court approval.
What a revocable trust does not do is protect your property from estate tax or Medicaid recovery. Because you retain full control of the assets, they are still considered part of your taxable estate and are still countable for Medicaid purposes. For most New York homeowners whose primary concern is avoiding probate and making the transfer of their home straightforward, a revocable trust is the right starting point.
The critical requirement is that your property must actually be transferred into the trust by recording a new deed in the trust’s name. A trust that does not hold your property provides no protection for that property.
Irrevocable trust
An irrevocable trust removes your property from your name and your estate entirely. Once assets are transferred in, you give up direct ownership and control. In exchange for giving up that control:
- The assets are generally no longer part of your taxable estate
- The assets are no longer countable for Medicaid purposes, subject to applicable look-back periods
- The property is protected from Medicaid estate recovery after your death
- The property passes to your beneficiaries outside of both probate and Medicaid recovery
There are two main types of irrevocable trusts used for New York property:
- Medicaid Asset Protection Trust (MAPT): You transfer your home into the trust, and after the five-year look-back period for nursing home Medicaid has passed, the property is protected. You can continue living in the home during your lifetime
- Irrevocable trusts for estate tax reduction: Structures such as spousal lifetime access trusts and grantor retained annuity trusts remove assets from your taxable estate by giving up control of them. Each has different mechanics depending on your goals and family situation.
What Happens When You Fund the Trust
Creating a trust is only half the job. Funding it means actually transferring your property into the trust’s name. For real estate, this is done by recording a new deed that transfers title from you personally to you as trustee of your trust or to the irrevocable trust itself.
A trust document that does not hold your property does nothing to protect it, so if you create a trust but never record a new deed, your home still goes through probate as if the trust did not exist.
When working with an attorney to set up a trust for your New York property, confirm that the deed transfer is included in the engagement and that it will be recorded with the county clerk’s office.
Special Considerations for New York City Property
New York City real estate presents some unique considerations that property owners in the rest of the state do not face.
Cooperative apartments
If you own a co-op rather than a condominium or standalone property, transferring it into a trust requires approval from the co-op board. Many boards are unfamiliar with trust ownership or have policies that restrict it. Before creating a trust to hold a co-op, confirm with the building’s managing agent or attorney whether the board will permit a trust as a shareholder and what the approval process involves.
High property values and estate tax
Manhattan, Brooklyn, and other high-value New York City markets can produce property values that, combined with retirement accounts, life insurance, and other assets, push an estate toward or above the $7.35 million New York estate tax threshold.
For homeowners in these markets, a revocable trust addresses probate but not estate tax. A more advanced planning strategy involving irrevocable structures may be worth discussing with an attorney.
How a Trust Fits Into a Broader New York Estate Plan
A trust for your property is one piece of a complete estate plan, not a standalone solution. For most New York property owners, a comprehensive plan includes:
- A revocable living trust holding your home and major assets to avoid probate
- A pour-over will to capture any assets outside the trust at your death
- A durable power of attorney to authorize someone to manage your finances if you become incapacitated
- A health care proxy designating someone to make medical decisions on your behalf
- Beneficiary designations on retirement accounts and life insurance that are consistent with your overall plan
Talk to a New York Trusts Lawyer at Seligson Law
Buying property in New York is a major milestone. Making sure it is protected is the next step. Call Seligson Law at 213-293-6692 or send us a message to discuss which trust structure is right for your situation.
Frequently Asked Questions About Protecting New York Property with a Trust
1. Should I put my New York home in a trust?
For most New York homeowners, yes. A revocable living trust keeps your home out of probate, allows your family to receive it quickly and privately after your death, and gives you full control of the property during your lifetime. The trust must be properly funded by recording a new deed in the trust’s name.
2. What is the difference between a revocable and irrevocable trust for New York property?
A revocable trust avoids probate but does not protect your property from estate tax or Medicaid recovery because you retain control of the assets. An irrevocable trust may remove the property from your estate entirely, which can protect it from Medicaid recovery and reduce estate tax exposure, but requires you to give up direct ownership and control.
3. Does putting my home in a trust avoid probate in New York?
Yes, but only if the property is actually transferred into the trust by recording a new deed. A trust that does not hold your property in its name provides no probate protection for that property. Your successor trustee can then distribute the home to your beneficiaries without any involvement from Surrogate’s Court.
4. Can I still live in my home if it is in a trust?
Yes. With a revocable living trust, you remain in the home as if nothing has changed. You can also continue living in your home with a Medicaid Asset Protection Trust, which allows you to retain the right to occupy the property while removing it from your countable assets for Medicaid purposes.
5. Can I put a co-op apartment in a trust in New York?
Possibly, but it requires board approval. Unlike condominiums and standalone properties, co-ops require the building’s board to approve any transfer of shares, including a transfer into a trust. Confirm the board’s policy before setting up a trust to hold a co-op. Seligson Law can help you navigate this process.
6. Does a trust protect my home from New York estate tax?
A revocable living trust does not reduce your estate tax exposure because you retain control of the assets. An irrevocable trust structured for estate tax reduction can remove the property from your taxable estate. If your estate is approaching or above New York’s $7.35 million threshold, an irrevocable trust or other advanced planning strategy may be worth discussing.
7. How do I transfer my New York property into a trust?
You record a new deed with the county clerk’s office that transfers title from your own name to the trust’s name. For a revocable trust, the deed typically reads something like “John Smith, Trustee of the John Smith Revocable Trust.” This step must be completed for the trust to hold and protect the property. Contact Seligson Law to handle the deed transfer alongside your trust creation.
