Dear Clients and Friends:
Here’s a very good and commonly asked question that needs to be answered simply and clearly…
It is my understanding that when you create a Revocable Living Trust and transfer your home into the trust you do not lose the STAR award or any other exemptions there may be on the property. Do these benefits transfer to the trust automatically or must you reapply for them? Also, is there a special type of deed used to accomplish the transfer? Thank you.
Let me be perfectly clear, you absolutely keep all of your property tax exemptions (star, enhanced star, senior, and veterans) when you transfer your primary residence into any revocable trust or irrevocable Medicaid trust. The law is clear that if you still have the exclusive use and occupancy of your house, the trust is basically ignored. We prepare your trusts with all this in mind. There is nothing special about the deed, just an ordinary deed transferring title into the trust.
But understand, the town assessor’s office has not read the trust so they do not know if the trust has the necessary language for you to keep your exemptions. Our experience is that one of two things is going to happen after you transfer your house to a trust. The first is absolutely nothing. Life will simply go forward as it always did for you. The second and most common consequence is that you will receive a letter of inquiry from the town as to whether you still have a “beneficial ownership in the trust”, that is, do you have the exclusive right to the use and occupancy of the property? If they ask you, please just send them a copy of your trust and that should be the end of it. On the other hand, if you wish to be more proactive, you can just send them a copy before they ask.
The bottom line is that you will NOT be reapplying for the exemptions.