More and more New Yorkers are inheriting homes from their wealthy parents — not buying them
Manhattan’s notoriously expensive housing market is becoming less about buying and more about bequeathing — as affluent parents increasingly use trusts to gift homes to their children.
In 2024, trusts powered 28% of home sales in the borough, a steep climb from 17% three years earlier, data from real estate analytics firm Attom reveals.
“These clients want to avoid tax ramifications with their purchase and be discreet with their spending,” Frances Katzen, a Douglas Elliman luxury broker told Bloomberg, and she estimated 40% of her parent-driven sales last year involved trusts.
Skyrocketing prices, new tax maneuvers and the dawn of a $100 trillion generational wealth transfer are fueling the shift, according to the outlet.
With Manhattan’s median home price hitting $1.1 million last year and cash deals dominating over 60% of sales, according to Miller Samuel Inc., even high earners — like doctors pulling in $350,000 — find themselves priced out of the market.
“One sort of change that’s coming out of the pandemic are parents who, instead of saving [homes] for when they pass, they give it to their kids while they’re still alive to give them something now to help them,” appraiser Jonathan Miller, of Miller Samuel, told The Post.
“It’s hard to be self made and buy property without generational wealth,” Peter Zaitzeff, a Serhant agent told Bloomberg, who recently closed a $4 million Central Park West apartment deal for a client’s son via a trust. “You need to make or have a lot of money to be here.”
But, according to Miller, not all who use a trust are parents passing down their homes to their children. Indeed, the Attom figures may include trust purchases other than parents buying homes for their children.
Trusts are the go-to tool for savvy buyers, offering tax breaks and a veil of privacy. They can slash estate taxes after a homeowner’s passing, sidestep gift tax hurdles, and, unlike LLCs, maintain some anonymity despite new transparency rules. After Gov. Kathy Hochul tightened the LLC Transparency Act last year, requiring owner disclosures, brokers report a rush to trusts among the wealthy.
“With the crackdown on LLCs through the US Treasury over the last decade, every year seemingly more restrictive, we are seeing a shift to the use of trusts,” Miller said. “Trusts serve many purposes. Enabling an easier transfer of wealth through real estate is certainly one of them. But there’s still plenty of other uses for it, like maintaining privacy and managing tax exposure, which are not just used by parents. The concerns about LLCs being a key indicator.”
“There are certainly many creative uses for trusts that provide privacy tax advantages,” Miller added.
Beyond taxes, trusts shield assets from creditors, lawsuits or messy divorces, appealing to entrepreneurs and high-stakes professionals. Unlike LLCs, which are business-focused, trusts are built for legacy planning, naming beneficiaries to inherit the keys.
“Indeed, there are further factors at play,” said New York-based family lawyer Yonatan Levoritz, founder of the Levoritz Law Firm. “There’s been a notable resurgence of foreign buyers re-entering the New York market, coupled with high-net-worth individuals seeking more stable investment opportunities. With alternative markets like Florida becoming increasingly expensive, these investors are turning to New York, thereby contributing to the growing trend of trust usage.”
The trend is reshaping Manhattan’s coolest corners. Attom data shows a third of trust-bought condos in 2024 landed in chic spots like Soho, Tribeca and the West Village, where average sales topped $3 million, per Douglas Elliman. These areas, once the domain of seasoned tycoons, now buzz with younger faces.
“In areas like the West Village, there used to only be older people who were wealthy,” Zaitzeff said. “Now, it’s all 20 year olds whose parents bought them a place.”
With baby boomers poised to pass down vast fortunes, analysts see no slowdown ahead.
New York’s 350,000 millionaires — and counting — ensure luxury real estate stays a hot ticket for heirs, per Knight Frank. Chayce Horton, a senior analyst at Cerulli Associates, predicts trusts will only grow in popularity as families navigate this wealth wave.
“Coming out of the pandemic, the surge in wealth, the expansion of the wealth gap has probably facilitated this legal mechanism more than a typical year,” Miller told The Post. “The last couple of years, we’ve seen a tremendous increase in wealth and this just happens to be a vehicle that works — a legal vehicle that works for enabling parents to help their children buy real estate. But by no means is it the only use of this vehicle, which has been around a long time.”
