Asked and AnsweredMy husband and I own a co-op and we would like to transfer the shares to an irrevocable trust that we recently created for estate planning purposes. Will our cooperative allow us to make that transfer?
Maybe. Each cooperative is different. Many co-ops now allow existing shareholders (and sometimes new shareholders) to take title in the name of a trust, owned by one or both spouses. A full Board package may be required in some cases and other requirements may be imposed (like personal guaranties or maintenance escrows). After those requirements are satisfied, a transfer to a trust can be accomplished. If there is an outstanding mortgage, the consent of your bank will also be required, which may not be easy to obtain in the current lending environment. If the apartment in question is a condo, transfer to a trust will usually not be an issue and will be provided for in the declaration and by-laws of the Condominium in which the apartment is located. At the end of the day, I wonder how many times a trust has actually defaulted on its obligations to a co-op. My guess would be it’s a very rare occurrence. In any event, the co-op will require the hoop jumping to accomplish this goal.