Manhattan and Brooklyn co-op owners face a wrinkle that condo and house owners don't: the apartment isn't real property you can simply deed into a trust. It's shares in a corporation paired with a proprietary lease, and moving that into a trust usually means going through the co-op board.
Why Co-Ops Are Different
When you own a co-op, you don't hold title to real property - you hold shares of stock in the cooperative corporation, along with a proprietary lease that gives you the right to occupy your specific unit. Transferring that combination of shares and lease into a revocable trust is legally a transfer of the shares and an assignment of the lease, and most proprietary leases require board consent before any transfer, including transfers into a trust for estate planning purposes. This is very different from a condo or house, where a deed can typically be recorded without third-party approval.
What Board Approval Usually Involves
Most co-op boards have become more accustomed to estate planning transfers over the years, but the process still typically requires:
- A formal application to the board requesting consent to transfer the shares and assign the proprietary lease to the trustee of your revocable trust.
- Providing a copy of the trust document, or a certification of trust summarizing its key terms, so the board can confirm you remain the beneficial owner and retain control during your lifetime.
- Confirming that you, as grantor and trustee, will continue to occupy the unit and remain personally responsible for maintenance and house rules, since boards are typically concerned with preserving those obligations regardless of the ownership structure.
- Sometimes, a nominal transfer fee or legal review fee charged by the co-op's counsel to process the paperwork.
- In some buildings, an updated recognition agreement with the co-op's lender if the shares are financed, since the lender needs to be aware of the trust transfer as well.
Practical Considerations Before You Start
Because approval isn't guaranteed to be quick, it helps to review your proprietary lease and house rules before submitting a transfer request, and to talk with the managing agent about the board's typical timeline and documentation preferences. Some boards process these requests routinely and quickly; others treat every transfer, even into your own revocable trust, with the same scrutiny as a sale to a new buyer. Building in enough lead time avoids a situation where your broader estate plan is otherwise complete but the co-op transfer remains pending.
Fitting the Co-Op Into Your Overall Plan
A co-op transfer into a trust is one piece of a larger trust funding process and should be coordinated with your full estate plan so that your most valuable asset doesn't end up as the one piece left outside the trust.
If you own a co-op and want help navigating the board approval process for a trust transfer, Marianna Schwartsman can guide you through it. Schedule a free consultation or call +1 212 518 3868.
