New York City Co-Op and Your Estate

There are several issues that may arise when it comes to planning an estate which includes a co-op. Unlike a condominium, when a co-op is purchased, a share of the building or property itself is purchased. A cooperative is considered to be a corporation or limited liability company (LLC). This being the case, every owner within the complex has a right to an equal share of the property. No single person owns a particular unit, although each tenant resides in their own specified unit. Residents of a unit in a co-operative are subject to an occupancy agreement which functions similarly to a leasing agreement. Members bound by the agreement have a right to a specific unit within the property. Rules and regulations regarding the co-op are listed within the agreement. Often times, these rules appear to conflict with the placement of a co-op in a trust. It is advised to consult with a New York estate planning attorney concerning the special issues that face co-op shareholders and their desire to hand down a co-op property to a beneficiary.

Do you or loved one need help concerning a New York City co-op in regards to estate planning? An attorney can be of assistance. Contact a New York Estate Planning Attorney today!

• Qualified Personal Residence Trust (QPRT): This kind of trust saves money on gift and estate taxes by allowing a homeowner to transfer a principal residence to a trust for a certain period of time, at which the property is transferred to the beneficiary upon the expiration of the term.
• Revocable Living Trust: This type of trust is place where all of a person’s assets can be stored and are automatically transferred to a beneficiary upon the grantor’s death. It functions similarly to a will, only it is not subject to probate.

The majority of Manhattan area buildings are cooperatives. Before a person can close on one of them, most cooperatives require board approval, in part, to make sure that their investments are protected. A package of specified information regarding a potential shareholder and resident must be reviewed by the board before admission. A commitment from lender is also required if a unit is to be financed. Once the information is reviewed by the board, the shareholder and prospective resident must meet with them for an interview. If the interview goes well for the potential buyer, the board will contact the seller and set a closing date with the buyer and their representatives.

When a shareholder places their co-op shares in a trust, it tends to pose a litany of problems for the cooperative’s board. The main point of contention is that such an event will sidestep the process of board approval. Generally, the board votes to determine which buyer is suitable for their co-op. In the scenario of a trust, the beneficiary could be someone who would not normally have been approved by the board if they had come in using the standard process. Other issues arise in regards to the payment of maintenance fees once ownership is transferred to a trust. An attorney experience in New York estate planning law can help you with the transfer of a co-op to a trust and the potential resulting conflicts with the co-op board.

Do you or loved one need help concerning a New York City co-op in regards to estate planning? An attorney can be of assistance. Contact a New York Estate Planning Attorney today!