Trusts Gain Traction in Real Estate Transfers

In the fast-moving world of U.S. real estate, how property is bought and transferred is shifting. In 2024, more than a quarter of all home sales in Manhattan were conducted through trusts — a significant jump from just a few years ago. According to recent data, 28% of residential transactions last year in Manhattan alone involved trusts, up from 17% in 2021.

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But this isn’t just a Manhattan story. From Florida to California, attorneys and real estate professionals are seeing a clear uptick in the use of trusts for residential and investment property transfers. Buyers aren’t just looking to own real estate — they want to protect it, manage it, and pass it on more efficiently.

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As an advisor, I see this trend as part of a broader shift: trusts are no longer a niche tool for the ultra-wealthy. They’re becoming a smart, strategic choice for anyone looking to pass on assets securely while reducing tax exposure and gaining privacy.

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Why More Buyers Are Using Trusts

The appeal of trusts in real estate starts with control. For many buyers, especially parents purchasing property for their children, or individuals structuring generational wealth transfers, trusts offer a level of security and planning that traditional titling doesn’t.

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There are several specific benefits driving this trend:

• Tax Planning: Transferring property into a trust can remove it from your taxable estate, which can significantly reduce estate tax exposure, especially in high-value markets. As of 2025, the federal estate tax exemption is $13.99 million per individual, and the annual gift tax exclusion is $19,000. These figures are scheduled to sunset in 2026, potentially reducing the exemption to pre-2018 levels, highlighting the urgency for proactive planning this year.
• Privacy: Unlike wills, which go through public probate, trusts are private legal agreements. Ownership details aren’t recorded in the same way, making trusts appealing to buyers who value discretion.
• Protection from Liability: Trust structures can protect assets from certain creditor claims or legal disputes, particularly when used with irrevocable or land trust arrangements.
• Streamlined Transfers: Trusts avoid probate court, meaning property can be passed to heirs or beneficiaries more quickly and with fewer legal fees and delays.

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Trends are showing that more families are putting assets into trusts not just to transfer wealth, but to maintain control across generations. That logic applies in markets like Miami, Scottsdale, and Los Angeles as well, where property values and privacy concerns are equally high.

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The Trust Structures Most Commonly Used

Choosing the right trust depends on the goals of the property owner. Here are the most commonly used trust types in real estate, along with their practical advantages:

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• Revocable Living Trusts allow individuals to maintain full control of their assets during their lifetime and make changes as needed. They’re ideal for those who want flexibility while avoiding probate.
• Irrevocable Trusts cannot be changed once established, offering stronger asset protection and potential tax benefits. These are often used when shielding property from creditors or reducing estate size is a top concern.
• Land Trusts hold title to real estate in a trustee’s name, offering privacy and ease of transfer. While historically common in Illinois and Florida, they’re gaining ground nationally as a strategic option.
• Dynasty Trusts are long-term vehicles designed to preserve wealth across multiple generations. For families with legacy properties or multigenerational planning needs, these trusts offer a way to pass real estate while minimizing estate taxes over time. New strategies gaining popularity in 2025 include Spousal Lifetime Access Trusts (SLATs), which allow couples to use their gift exemptions while retaining indirect access to the assets. States like South Dakota, Nevada, and Delaware are also leading choices for dynasty trusts due to their favorable long-term trust laws.

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Selecting the right structure is critical, and often requires a combination of legal and financial expertise to align with both personal goals and state laws.

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How to Incorporate Trusts Into Your Estate and Property Plan

If you're considering a trust-based structure for property you already own—or for future real estate investments—there are some important considerations to address early:

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• Engage Qualified Advisors: Work with an estate planning attorney who understands both real estate and trust law. Trusts are complex, and the consequences of missteps can be significant.
• Review Existing Ownership Structures: If your property is held jointly, or through a business entity, make sure transferring it into a trust won't trigger unwanted tax or legal complications. Be mindful of state-level estate tax thresholds and property reassessment laws. For example, New York imposes a steep estate tax “cliff” above $7.16 million, while California’s Prop 19 can trigger higher property taxes for inherited homes unless specific exemptions apply.
• Clarify Your Objectives: Is your goal to protect assets from liability? Reduce estate taxes? Create a smooth inheritance process? Your answers will guide the best trust structure.
• Plan for Maintenance: Trusts aren't "set and forget" instruments. Periodic reviews ensure they stay compliant with evolving tax law and aligned with your broader financial goals. With estate tax exemptions set to drop in 2026, 2025 is a critical time to revisit your estate plan and ensure you're leveraging current thresholds.

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Whether you're looking to protect a brownstone in Brooklyn or a vacation home in Scottsdale, trusts offer a flexible, proven tool for long-term planning.

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Conclusion

The data coming out of Manhattan real estate isn't just about a local trend — it’s part of a broader national story. Across high-value zip codes and intergenerational wealth transfers, more people are using trusts to gain clarity, privacy, and control over their property.

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By offering both flexibility and protection, trusts are helping more individuals secure not just what they own, but what they hope to pass on. With the right guidance and a clear plan, incorporating trusts into your real estate strategy is no longer just wise — it may soon become standard. The window to use the elevated federal exemptions closes at the end of 2025, making this an ideal year to assess your estate and gifting strategies before new tax laws take effect.

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To learn more about automated tax optimization and how to integrate smart tools into your strategy, email Terry@DuPontAdvisory.com, or visit DuPontAdvisoryGroupvfo.com

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Sources

Curbed

The Real Deal

Investopedia

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