Q: Does New York allow real estate to be held in a trust?
A: New York State law as well as the law of most other states (I am licensed to practice law in NY and NJ) permits and allows real estate ownership in a trust. Many individuals, including married couples, transfer the ownership of real property into a trust while continuing to reside in the residence or vacation home;trusts are also used to hold commercial properties. Trusts are either revocable or irrevocable and each is very useful and important. Revocable trusts are primarily used to avoid probate--ie. court involvment in estate transfers primarily to the next generation. It is essential to note that revocable trusts are of limited use for tax planning and elder law/long term care planning; to protect assets such as the family residence from claims for the costs of nursing home, the real estate would normally have to be transferred into an irrevocable trust with retained life rights to occupy in the persons who set up the trust. Under existing federal law, there is a five (5) year look back period for Medicaid claims with regard to the outright gift of assets to the next generation or the transfer of a residence or other asset into an irrevocable trust. The five year lookback clock or period never starts if the residence is transferred only into a revocable trust; only an irrevocable trust starts the 5 year clock. There are also many other reasons to hold own real estate in a trust. Consult with an attorney on thse issues and have a lawyer prepare the trust documents.
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