I often meet with families in our Manhattan office who have owned the same home for generations. Their biggest fear isn’t the market—it’s the thought of their children getting tangled in Surrogate’s Court for a year or more just to inherit the family brownstone. They ask me, “Russel, should we put the house in a trust?” The answer depends entirely on what the family is trying to accomplish.
For most people, placing a primary residence into a trust is not about complex tax avoidance. It’s about stewardship. It is a deliberate act to remove your single most valuable asset from the machinery of the probate process—a process that is public, time-consuming, and can be costly.
The Power of Avoiding Probate
When you die owning real estate in your name alone, your will must be validated by the Surrogate’s Court in the county where the property is located. This is probate. Until the court formally appoints an executor, the property is frozen. It cannot be sold, retitled, or refinanced. The house sits in legal limbo while the family pays for its upkeep.
A properly funded trust changes this dynamic. By titling your home in the name of a trust, you—the grantor—no longer own it as an individual. The trust owns it. You appoint a trustee to manage it for your chosen beneficiaries. Upon your death, the property does not pass through probate because it is not part of your probate estate. Your chosen successor trustee can then manage or distribute the property according to the instructions you left in the trust document. The transfer is private and bypasses the court’s direct supervision.
Revocable vs. Irrevocable: The Question of Control
The most common concern I hear is about control. “If the trust owns my house, can I still sell it? Can I take out a home equity loan?” The distinction between a revocable and an irrevocable trust is critical here.
A revocable living trust is the most common vehicle for holding a primary residence. It is exactly what it sounds like—revocable. While you are alive and have capacity, you retain complete control. As the grantor and initial trustee, you can amend the trust, change beneficiaries, sell the property, or dissolve the trust entirely. Your relationship with your home changes very little. You simply hold the title in a different capacity—as a trustee rather than an individual.
An irrevocable trust is a different instrument for a different purpose. Once you transfer your home into an irrevocable trust, you generally cannot take it back. You give up control. Why would anyone do this? The primary drivers are typically asset protection from creditors or long-term care planning. By placing the asset outside your legal ownership, you may protect it from future claims or start the clock on the Medicaid five-year look-back period. This is a significant, and permanent, decision.
The Mechanics of the Transfer
Transferring your home into a trust is not just a matter of signing a trust document. The transfer must be formally recorded with a new deed. This legal document retitles the property from your individual name to your name as trustee—for example, from “Jane Smith” to “Jane Smith, as Trustee of the Jane Smith Revocable Trust.”
In New York, this process involves executing and filing the deed with the appropriate county clerk’s office. This is not a suggestion; it is a legal requirement. New York’s Estates, Powers and Trusts Law § 7-1.18 confirms that a trust is only valid for assets that have actually been transferred to it. Failing to properly “fund” the trust by recording this new deed is one of the most common mistakes we see. An unfunded trust is just a set of instructions with no assets to control—and the house will end up in Surrogate’s Court anyway.
Placing your home in a trust is a powerful tool for generational planning. It allows for a seamless transition of a significant family asset. But it must be done with intention and a clear understanding of the type of trust that aligns with your family’s legacy.
If you are considering how best to manage your real estate as part of your estate plan, the first step is a frank assessment of your goals. I invite you to schedule a legacy planning session with our firm, where we can review your existing deed and discuss how a trust structure might serve your family’s future.
