I once worked with a family whose matriarch had lived in the same Brooklyn brownstone for over 50 years. When she passed away, her will clearly stated that the house should be divided among her three children. But a will doesn’t transfer title. The will had to be validated by the Kings County Surrogate’s Court, a process known as probate. For nearly a year, the house sat in legal limbo—the children couldn’t sell it, couldn’t refinance it, and couldn’t fully take ownership. The process turned their inheritance from a foundation for the future into a source of immense frustration.
This is a common story. For many New York families, their home is not just their largest asset; it’s the heart of their legacy. The question of whether to place that home into a trust is not about legal paperwork. It’s about stewardship. It’s about ensuring a seamless transition of that legacy from one generation to the next, with intention and clarity.
The Trust as a Vehicle for Your Property
When you place your house in a trust, you change its ownership. The trust—a legal entity you create—becomes the new owner of record. You, as the creator or “grantor,” appoint a “trustee” to manage the property according to the rules you set in the trust document. During your lifetime, you can serve as your own trustee, retaining full control.
The primary reason my clients consider this is to avoid probate. Because the trust owns the home, not you personally, the property is not part of your probate estate upon death. It does not fall under the jurisdiction of the Surrogate’s Court. Your successor trustee—often a child or trusted family member—can take control and manage the property according to your instructions, without the court delays and public filings mandated by Surrogate’s Court Procedure Act (SCPA) Article 14.
This isn’t just about avoiding a procedural headache. Probate is a public process. Your will, your assets, and your beneficiaries become a matter of public record. A trust maintains your family’s privacy. The transfer of your home happens privately, according to the terms you laid out.
Revocable vs. Irrevocable: The Trade-Off Between Control and Protection
The most critical decision is what kind of trust to use. The choice comes down to a fundamental trade-off: flexibility versus protection.
The Revocable Living Trust
A revocable trust is the most common vehicle for holding a primary residence. It is exactly what it sounds like—revocable. You can change it, amend it, or dissolve it entirely at any time. You can sell the house, take out a mortgage, or do anything else you could do as an individual owner. For all practical purposes, your day-to-day life is unchanged. You retain complete control. The trust functions as a contingency plan, a set of instructions for what happens when you are no longer able to manage the property yourself, either due to incapacity or death.
The Irrevocable Trust
An irrevocable trust is a much more significant step. Once you transfer your home into this type of trust, you generally cannot take it back. You give up control. Why would anyone do this? The primary reasons are asset protection and long-term care planning.
By placing the home in a properly structured irrevocable trust, you can shield it from future creditors or lawsuits. More commonly, families use it to plan for potential Medicaid needs for long-term care. By transferring the asset out of your name, you can start the clock on Medicaid’s five-year “look-back” period. After five years, the value of the home is typically not counted against you when determining eligibility.
This path requires careful consideration. You lose direct control over the asset. While you can continue to live in the home, you can’t simply decide to sell it and keep the proceeds. The decision to sell would belong to your trustee, and the proceeds would belong to the trust. This is a powerful tool for asset preservation, but it demands a high degree of certainty and a clear understanding of the sacrifices involved.
When a Trust May Not Be the Right Answer
A trust is not a universal answer. For some, a simple will is sufficient. The costs of setting up and maintaining a trust can be a factor. There are also tax implications to consider.
For instance, the capital gains tax exclusion for a primary residence—which allows an individual to exclude up to $250,000 (or $500,000 for a married couple) of gain on a sale—can be preserved in a revocable trust. However, preserving that same benefit with an irrevocable trust requires very specific drafting. A poorly constructed trust could inadvertently forfeit this valuable tax benefit for your heirs.
The decision to place your home in a trust is deeply personal. It depends on the value of your assets, the dynamics of your family, and your vision for the future. It’s a deliberate act of planning that weighs the desire for a smooth transition against the costs and complexities involved.
The goal is to ensure the stewardship of your most important asset passes to the next generation with clarity and purpose. The first step in that process is often a simple review of your property’s deed and a conversation about what you truly want to accomplish for your family. If you would like to discuss how your own property is titled and whether a trust aligns with your legacy, my office can schedule a review of your current documents.
