For Brooklyn residents who own a cooperative apartment, incorporating a revocable living trust into your estate plan can offer significant advantages, especially when it comes to bypassing the lengthy probate process in Kings County Surrogate’s Court. The probate process in Brooklyn can take over 1.5 years to complete, leaving heirs in limbo and potentially causing delays in the transfer of property. If you’re looking to streamline the inheritance of your co-op apartment and avoid the frustrations of probate, a revocable living trust may be the ideal solution – especially if your cooperative management allows such trusts to hold stock.
In this blog, we’ll explore why a revocable living trust is such a valuable tool for co-op owners in Brooklyn and how it can save time, money, and stress for your heirs.
What is a Cooperative Apartment and How Does Ownership Work?
A cooperative apartment (co-op) is a type of property ownership (not real property ownership) unique to places like New York City. Instead of owning real estate, you own shares of a corporation that owns the entire building. The shares you hold entitle you to lease and occupy a specific unit within the building. Because you own shares in a corporation, transferring ownership of a co-op upon your death requires the transfer of stock, which can complicate estate planning.
Typically, if you pass away and leave your co-op to heirs through a will, that will must go through the probate process before the stock can be transferred. In Brooklyn’s Kings County Surrogate’s Court, probate is a time-consuming and often bureaucratic process that can take 1.5 years or more. During that time, your heirs may face uncertainty or delays in selling or occupying the apartment.
The Problem with Probate in Brooklyn’s Kings County Surrogate’s Court
Brooklyn is one of New York City’s busiest boroughs, and its probate court – Kings County Surrogate’s Court – is no exception. Several factors make probate especially lengthy and burdensome in Brooklyn:
1. High Volume of Cases:
Brooklyn’s large population means that the Kings County Surrogate’s Court is inundated with probate cases. This heavy caseload contributes to long processing times, often resulting in probate taking over a year and a half.
2. Complex Estates:
Probate cases that involve real estate, cooperative apartments, or multiple heirs can be particularly complex, leading to further delays. Disputes among heirs, creditor claims, or issues with estate taxes can complicate and extend the process.
3. Frozen Assets:
While a will is in probate, your assets—including your co-op apartment—are often frozen. This means your heirs may not be able to occupy, sell, or lease the apartment until probate is completed. For families depending on the property for living arrangements or financial support, these delays can be frustrating.
How a Revocable Living Trust Solves the Problem
A revocable living trust is a powerful estate planning tool that allows you to transfer ownership of assets, including your cooperative apartment, without going through probate. When you place your co-op apartment in a living trust, the trust—not you personally—becomes the owner of the shares in the co-op. Upon your death, the successor trustee you name can immediately transfer the apartment to your heirs, bypassing probate entirely.
Here’s why a revocable living trust is a great option for co-op owners in Brooklyn:
1. Avoiding the Lengthy Probate Process
With Kings County Surrogate’s Court taking 1.5 years or more to probate a will, using a revocable living trust allows your heirs to skip probate altogether. The trust transfers ownership of the co-op to your beneficiaries immediately upon your death, saving them from dealing with court delays and legal complications.
2. Seamless Transfer of Cooperative Shares
In a revocable living trust, the successor trustee can transfer the shares of your co-op to your heirs without needing court approval. This can be done quickly and efficiently, allowing your loved ones to either occupy or sell the apartment without waiting for probate to conclude.
3. Privacy
Unlike probate, which is a public process, a revocable living trust is a private document. When your estate passes through probate, details about your assets, including the value of your co-op and the identities of your heirs, become part of the public record. By using a trust, your estate’s financial details remain private.
4. Flexibility and Control
A revocable living trust gives you the ability to maintain control of your co-op during your lifetime. You can buy, sell, or mortgage the property, and you can revoke or modify the trust at any time. Additionally, the trust can include instructions for how your co-op should be managed if you become incapacitated, ensuring that your property is handled according to your wishes.
How Cooperative Apartments in Brooklyn Can Be Held in Trust
One key to using a revocable living trust for a co-op apartment is ensuring that the co-op’s board of directors allows shares to be held in a trust. Each co-op has its own bylaws and rules regarding ownership, and while many co-op boards in Brooklyn permit shares to be transferred into a revocable trust, some do not. Before creating your trust, it’s essential to confirm with your co-op board whether it allows such transfers.
What to Check with Your Co-op Board:
– Trust Ownership Policies:
Verify with the co-op board whether they allow stock to be held in a revocable living trust. Some boards may have specific requirements or restrictions on trust ownership.
– Approval Process:
Co-op boards often have an approval process for any transfer of shares, including to a trust. Make sure you understand the process and the documents the board will need to approve the transfer.
– Successor Trustee and Beneficiary Requirements:
Some co-op boards may have rules about who can serve as a successor trustee or who can inherit the shares. Be sure that the individuals you name in your trust comply with these requirements.
Why Brooklyn Residents Should Consider a Revocable Living Trust for Their Co-op
For Brooklyn residents, the combination of a busy probate court and the complexity of owning a cooperative apartment makes a revocable living trust an ideal estate planning tool. Here’s why you should consider using a trust:
1. Faster Access for Your Heirs
Without the delays of probate, your heirs can access the co-op apartment or its proceeds immediately. This can be particularly important if your heirs depend on the property for living arrangements or financial stability.
2. Cost Savings
Probate can be expensive, with legal fees, court costs, and administrative expenses that reduce the value of your estate. Avoiding probate with a trust can help preserve more of your assets for your beneficiaries.
3. No Court Oversight
Probate requires court involvement and oversight, which can be stressful and intrusive. A living trust allows for the private, efficient transfer of assets without court interference.
If you own a cooperative apartment in Brooklyn, call us! Setting up a revocable living trust is a smart and strategic estate planning move, especially given the long probate process in Kings County Surrogate’s Court. By transferring your co-op shares to a living trust, you can avoid probate delays, maintain privacy, and ensure that your loved ones receive their inheritance quickly and without unnecessary legal hurdles.
