For many Suffolk County families, the house is not only their largest asset but also the center of their estate plan. That makes the question of whether to place a home into a trust especially important. We are often asked whether transferring a residence to a trust will avoid probate, protect the property, simplify matters for children, or reduce taxes. The answer depends heavily on the type of trust, your family circumstances, the value of your estate, and what you want the property to accomplish after your death. A trust can be an effective estate planning tool, but placing a house into the wrong type of trust, or failing to properly transfer title, can produce results very different from what you intended.
At Bernard Law P.C., we believe the better question is not simply, “Should I put my house in a trust?” Instead, we ask what problem you are trying to solve. A revocable trust, an irrevocable trust, and leaving the home in your individual name can each produce very different legal and financial consequences.
A Revocable Living Trust Can Help A Home Avoid Probate
One of the primary reasons New York homeowners place real estate into a revocable living trust is to keep that property outside the probate estate.
A will does not avoid probate. If your home remains titled solely in your individual name when you die, the executor may need to proceed through New York Surrogate’s Court before the property can ultimately be sold or transferred according to your will. By contrast, a home properly transferred into a revocable living trust can generally continue to be administered by the successor trustee without requiring probate solely to establish authority over that property.
New York Estates, Powers and Trusts Law § 7-1.17 establishes formal requirements for creating lifetime trusts, including requirements concerning the execution of the trust instrument. New York law also specifically addresses the funding of lifetime trusts under EPTL § 7-1.18.
That distinction between creating a trust and funding it is critical. Signing a trust agreement does not automatically place your house inside the trust. The ownership of the property ordinarily must be transferred by an appropriate deed. If the house remains in your individual name, the estate may still face the probate issue you were attempting to avoid.
A Revocable Trust Usually Does Not Mean Giving Up Control Of Your House
Some homeowners hesitate to use a trust because they are concerned that they will lose control of their property.
With a properly structured revocable living trust, that is generally not the objective. You may serve as trustee, continue living in the home, maintain it, and retain the authority provided by the trust to manage or dispose of it. New York law provides that a lifetime trust is irrevocable unless the instrument expressly makes it revocable, which is why the drafting of the trust itself matters. EPTL § 7-1.16 addresses that rule and the amendment or revocation of revocable lifetime trusts.
A revocable trust can also provide continuity if you later become unable to manage the property yourself. A successor trustee may be able to step in according to the terms of the trust rather than requiring the family to begin a court proceeding merely to obtain management authority.
This can be particularly valuable when a home must be maintained, insured, repaired, rented, or prepared for sale during a period of incapacity.
An Irrevocable Trust Is A Very Different Planning Decision
Homeowners should not treat every trust as interchangeable.
An irrevocable trust can be used for objectives that are very different from those of a revocable trust. Depending upon the structure and circumstances, irrevocable trust planning may be considered in connection with asset preservation, Medicaid planning, estate tax planning, or long-term family wealth planning.
But the tradeoff can be significant. Transferring a home to an irrevocable trust may restrict your ability to later change the arrangement, reclaim the property, or use it in ways that were previously available to you.
New York fiduciary law also imposes responsibilities on trustees. EPTL § 11-1.1 provides trustees and other fiduciaries with statutory powers regarding the management of trust property, subject to the governing instrument and applicable law.
We therefore caution against transferring a home into an irrevocable trust simply because someone has been told that it will “protect the house.” Protection from what, and at what cost, must be answered before the transfer is made.
Tax Consequences Should Be Considered Before Transferring A Home
Any plan involving valuable New York real estate should also be reviewed from a tax perspective.
Depending upon the trust structure, questions can arise concerning income taxation, estate taxation, capital gains treatment, and the property’s tax basis after death. A strategy that accomplishes one planning objective may create an unintended tax result elsewhere.
For Long Island homeowners, this can be particularly significant because appreciated real estate may represent a substantial percentage of the family’s wealth. Before transferring property, we want to understand the homeowner’s basis, current property value, estate size, family objectives, and anticipated disposition of the home.
This is one reason we do not believe in treating trust planning as a standardized transaction. The right result depends upon the entire estate plan, not simply the deed to the house.
New York Snowbirds May Have An Additional Reason To Consider A Trust
For clients who own a primary or secondary residence in both New York and Florida, trust planning can become even more important.
Real estate is generally governed by the law of the state in which it is located. If a New York resident dies owning Florida real estate individually, the family may potentially face estate administration proceedings in more than one state. Properly structured and funded trust planning may help reduce the need for ancillary probate involving out-of-state property.
However, snowbird planning should not focus solely on probate. Domicile, New York estate taxation, Florida homestead considerations, creditor issues, and how each property is titled must also be evaluated.
Dan Bernard is admitted to practice in both New York and Florida, and we regularly consider these interstate issues when creating estate plans for clients who divide their lives between the two states.
Whether Your House Belongs In A Trust Depends On Your Larger Estate Plan
There is no universal rule that every New York homeowner should place a house into a trust. For some families, a revocable living trust provides greater continuity, privacy, and probate avoidance. For others, an irrevocable trust may address a specific long-term planning objective. In still other situations, transferring the residence into a trust may add complexity without providing a meaningful benefit.
We believe the decision should begin with your goals. We look at who should ultimately receive the home, whether you want it sold or retained, whether you are concerned about incapacity, whether you own property in another state, your potential tax exposure, and whether long-term asset preservation is part of your plan.
Only after answering those questions can we determine whether placing your house into a trust makes sense.
FAQs About Putting A House In A Trust In New York
Does Putting My House In A Trust Avoid Probate In New York?
It can. If the property is properly transferred into a revocable living trust during your lifetime, the successor trustee can generally administer the property under the trust rather than relying on probate solely to establish authority over the house. However, simply signing a trust agreement is not enough. The property must actually be transferred into the trust through proper title documentation.
Can I Still Live In My House After Putting It In A Revocable Trust?
Generally, yes. A properly drafted revocable living trust commonly allows you to continue occupying and controlling your residence. Many clients continue managing the property in essentially the same manner as before because they serve as trustee while they are capable of doing so.
Can I Sell A House That Is In My Revocable Trust?
Generally, a trustee with appropriate authority can sell trust property. New York EPTL § 11-1.1 grants fiduciaries various powers involving property management, although the trust instrument itself must also be reviewed. If you are the trustee of your own revocable trust, the trust is commonly drafted to preserve broad management authority.
Is An Irrevocable Trust Better For Protecting My House?
Not necessarily. An irrevocable trust may provide benefits for certain planning objectives, but it generally requires giving up significantly more control than a revocable trust. We would want to understand exactly what risk you are attempting to protect against before recommending such a transfer.
Does Putting My House In A Trust Reduce Estate Taxes?
A standard revocable living trust generally should not be viewed as an estate tax avoidance device by itself. More advanced irrevocable trust strategies may have tax planning applications, but the result depends upon the type of trust, estate value, and overall structure.
What Happens If I Create A Trust But Never Transfer My House Into It?
This is one of the most important practical problems in trust planning. If you create a trust but leave the property titled individually, the house may remain part of your probate estate. Creating the trust and funding the trust are separate steps.
Should I Put My Florida Home And My New York Home In The Same Trust?
Possibly, but the answer requires careful interstate planning. Owning property in both states raises issues involving probate, domicile, taxation, and Florida-specific property rules. We evaluate both properties together rather than treating them as unrelated assets.
Can My Children Keep The House After I Die?
Yes, if your estate plan is structured that way, but the planning should address how expenses, taxes, repairs, and decisions regarding the property will be handled. Leaving a house equally to several children without creating rules for management can sometimes lead to disagreements.
Schedule Your Free Consultation With Bernard Law P.C. Today
Deciding whether to put your house into a trust should be part of a larger estate planning discussion. We help clients determine whether a revocable trust, irrevocable trust, will-based plan, or another strategy best fits their family, property, tax considerations, and long-term goals. We also work with New York snowbirds who need coordinated planning involving homes and other assets in both New York and Florida.
At Bernard Law P.C., our goal is to create an estate plan specifically designed around your life rather than place you into a standardized plan.
If you own a home in New York and are considering placing it into a trust, we can help you understand the advantages, limitations, and potential consequences before you transfer the property. Bernard Law P.C. is located in Hauppauge, New York, and serves individuals and families throughout Suffolk County.
Call our Suffolk County estate law attorney at Bernard Law P.C. at (631) 378-2500 to schedule a free consultation and let’s discuss whether placing your home into a trust is appropriate for your estate plan.
