If you live in New York City, there is a good chance you own a co-op or know someone who does. Co-ops are common here, but they can still create complications that catch owners off guard, especially when planning for the future. As an estate planning and elder law attorney, I see these issues play out constantly in probate and planning matters, which is why I put together this straightforward, jargon-free guide to explain what you actually own, how trusts and estate planning fit in, and what to consider before life throws you a curveball.

I Don’t Actually Own My Apartment!?

You may already know this, but one thing that surprises a lot of new co-op owners: you’re not actually an owner. When you buy a co-op, you are not buying the apartment itself. You are buying shares in a corporation, and that corporation owns the entire building. This distinction is important because instead of walking away with a deed like you would with a condo or single-family house, you get a stock certificate and something called a proprietary lease that confirms your legal right to live in your specific unit.

This might sound unusual, but it is the norm in New York City. Roughly 70 percent of the city’s residential buildings are structured as co-ops, so if you own an apartment here, odds are good you are a shareholder rather than a traditional homeowner.

A few things come with that shareholder status. Co-ops operate under bylaws that spell out the rights and responsibilities of every shareholder. Want to sublease your unit? You will likely need board approval first. And major building decisions get made at shareholder meetings, not by any single resident. Living in a co-op means being part of a small community with its own rules—something very much worth understanding before you buy in.

What Happens When a Shareholder Passes Away?

This is the scenario that trips up more families than almost anything else. If a parent who owns a co-op unit passes away without the apartment being held in a trust, their child has to go through probate before gaining any control over it. I often warn clients that probate can take months—sometimes years—and during that time, the deceased parent’s individual bank accounts may be frozen while monthly maintenance charges on the apartment continue to accrue.

The estate is technically responsible for paying that maintenance, but until the court appoints someone to act on its behalf, no one has legal authority to access the parent’s funds to pay it. Some beneficiaries pay out of pocket and hope to be reimbursed later. But many cannot absorb that extra monthly expense on top of their own bills. When that happens, the maintenance falls into arrears, racking up penalties and late fees. This adds to what the estate eventually owes, and reduces the value of what the beneficiary ultimately inherits.

There is another option: beneficiaries can petition the court for permission to let a representative—sometimes called a limited letters testamentary—step in early, so someone has the authority to pay bills like this and keep the estate from falling further into debt while the court works through locating heirs and finalizing the estate. According to my law partner Christina Sammartino, “This option is not guaranteed, and courts often require the representative to post a bond first,” adding cost and delay to another process that is already slow and stressful.

Either way, missed maintenance does not just harm beneficiaries waiting to inherit; it also harms the building itself. Co-ops depend on every shareholder’s monthly payment to cover operating costs like utilities, insurance, physical maintenance, and staff salaries, so when probate holds up an estate and those payments stop, the building takes a real financial hit. At the same time, arrears also put beneficiaries at risk, since unpaid maintenance can escalate into liens against the shares, or even eviction proceedings.

Can You Put a Co-op Into a Trust?

The good news is that a trust can prevent most of this—but only if your building allows it. A trust is a legal arrangement for managing assets according to a set of instructions. Depending on the type of trust, the person who creates it can also be the one managing it and benefiting from it, which is exactly how most revocable trusts work. For New York City residents, where probate courts are often expensive and backlogged, trusts are the main tool used to make passing property to loved ones smoother, more private, and less stressful.

But here’s the catch with co-ops specifically: unlike a house, you cannot simply retitle your shares and proprietary lease into a trust on your own. Just like most major decisions in a co-op, transferring shares requires board approval. This is especially true for irrevocable trusts, since they place a third party, rather than the original shareholder, in control as trustee. Boards often want to know who is financially responsible if maintenance goes unpaid, as well as who carries liability for the unit, so approval for an irrevocable trust can come with extra scrutiny compared to a revocable one.

Why a Trust Can Make All the Difference

If your building’s board allows it, placing a co-op into a trust can solve these headaches before they start. Here is what a properly structured trust can offer:

A faster path forward. Assets held in trust generally avoid probate entirely, so your beneficiaries can gain control of the shares much faster.

Uninterrupted maintenance payments. This benefit depends on the trust being properly funded—meaning the bank accounts used to pay maintenance are titled in the trust's name alongside the shares. When that is done correctly, the trust can keep functioning after the shareholder’s death, so monthly payments to the building do not have to stop and start. This protects both your beneficiaries and your relationship with the board.

Clarity for your beneficiaries. A trust spells out exactly how and when assets pass to your beneficiaries, removing guesswork and reducing the chance of disputes among beneficiaries down the road.

Protection for vulnerable beneficiaries. If a beneficiary is a minor child or a person with special needs, a trust can control how and when they receive access to the property instead of handing it over outright, which can affect eligibility for needs based government benefits.

Control Is Not the Same as Ownership

Here is another thing most people don’t realize: whether shares pass through probate or through a trust, a beneficiary does not automatically become a shareholder. The board still requires a purchase application, and the new person must be approved just like any other buyer before shares can be issued in their name. Until that approval comes through, the beneficiary typically has the right to control and sell the unit, but not to move in and live there as an approved shareholder. A trust does not remove this step; what it does is let your beneficiaries manage that process without the added delay, expense, and frozen accounts that come with probate.

The Documents That Run the Show

As previously mentioned, every co-op operates under a handful of governing documents—and understanding those documents matters more than most owners realize. The bylaws we referenced earlier are the most important, laying out core regulations and procedures for the building. Alongside the bylaws, the articles of incorporation form the legal foundation of the co-op corporation. Many buildings also maintain house rules, which set day-to-day expectations for shareholders around things like noise, pets, subletting, and alterations to their units. 

If your co-op's bylaws do not allow shareholders to transfer shares into a trust, changing the bylaws is the only option—and changing bylaws is not something that happens casually. It typically requires a formal board meeting, a vote, and usually majority approval from all shareholders. Any amended bylaws also often need to be filed with the appropriate state agency.

Let’s Make Sure Your Co-op Fits Your Bigger Plan

Co-op ownership in New York City comes with real benefits, but also real complexity, especially when estate planning enters the picture. If you own a co-op or are thinking about buying one, it is worth having a conversation with an estate planning attorney about how your shares would pass to the people you love.

Leslie Sultan is a partner and estate planning and elder law attorney at Sammartino & Sultan Law Group PLLC, which has offices throughout Long Island, Brooklyn, Queens, and Westchester.