Land Trusts in New York are for Tree HuggersDavid Parkerwww.DavidParkerEsq.com

Making your Real Estate Trust – New York Compliant

Why can’t I do a Land Trust in New York?

Certain states such as Illinois or Florida have a specific statute called a Land Trust Act which determines how a land trust can be used to purchase and own property in those states. The rules, authority and process are laid out in that state statutes and are specific to each state. New York does not have a similar land trust statute. The only mention of a land trust in New York State Law is under the Environmental Conservation Laws that establish a trust for the land – to protect it from development.

That doesn’t mean that the strategies taught by many across the county won’t work in New York. Rather it emphasizes something they may have mentioned in their course. You need a lawyer to make sure that your land trust is compliant with New York State Law.

Know your terms in New York – The Intervivos Trust

Since New York State does not have a land trust act, you must look at the appropriate law that governs trusts which is Article 7 of the Estates, Powers and Trusts Law (“EPTL”). There are two types of trusts in New York, an express trust or a trust that is created by operation of law. Trusts created by operation of law are set up by a court; for example, if a will was not properly drafted and the court determines that a trust is the proper method to protect a particular beneficiary. However, we are not concerned with those types of trusts.

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An express trust is defined in EPTL 11-11-.1(a)(2) as “…any express trust of property, created by a will, deed or other instrument, whereby there is imposed upon a trustee a duty to administer property for the benefit of named or otherwise described income or principal beneficiary or both.” A party can create two types of express trusts: a testamentary trust and an Intervivos trust. A trust that takes effect when you die, is a testamentary trust. This is different than one created by operation of law because you create it while you are alive. A party spells out in a will that certain assets are to be placed into trust when they die. The terms of the trust are created when the person is alive but the trust does not come into existence until the person is dead. A typical example is used by parents to care for their children in the event of the parent’s death.

A trust that is created and takes effect while you are living is an Intervivos trust. Intervivos comes from Latin term, “between the living”. It refers to any trust that is created during your life and becomes operational during your life. A trust can contain any type of property, such as stocks, bonds, personal items or in our case, real property. This is different from other states which have specific laws for land trusts and other laws for personal property trusts.So if you are looking to purchase property in a trust in New York, know your terms, here it is called an Intervivos Trust. It can work the same way as the land trusts you have read about but only if you get the right New York Lawyers to make sure your deal is New York Compliant.

About David Parker

In 15 years of legal practice, David Parker has worked on a variety of corporate, real estate and business legal matters. Having also held non-legal positions in business, he is able to think outside the box and provide you with service that will enhance your goals.

He has handled leasing for office and retail landlords and tenants, joint venture agreements, financing and confidentiality agreements. In addition, he represents real estate developers and investors in all aspects of their real estate work.

www.DavidParkerEsq.com Free Consultation @ 914-862-0580