New York City's pied-à-terre tax was designed to extract money from second-home owners wealthy enough not to live in the city full time. The proposal, championed by State Assemblyman Zohran Mamdani during his campaign for mayor, would impose an annual surcharge on non-primary residences valued above a set threshold. But the proposal has produced an unintended effect: it is pushing middle-class and working homeowners, including people who already live in their houses, into estate-planning conversations they have never had before, often at hourly rates they have never paid, for advice that wealthier families have accessed for generations.

The publicity surrounding the mayor's office and a list of more than 680,000 New York properties — roughly one in five of the city's approximately 3.6 million housing units — that could theoretically be subject to a new tax has also highlighted how public most property data is. New York property records have been searchable for years through the city's Automated City Register Information System, or ACRIS, but the consolidated surcharge list made that visibility impossible to ignore. In the process, it has drawn attention to the benefits of seeking lawful privacy or risking inadvertent doxxing through Gracie Mansion.

"The wealthy and the ultra-high-net-worth have been in this game for a long time," said Myles Fischer, a partner who co-leads the Trusts and Estates practice group at Harris Beach Murtha. "The rest are sort of catching up." He said that catch-up is not cheap. Many middle-class and blue-collar homeowners are "being forced into a situation where they have to sit down with lawyers" to get planning advice that families with means secured years ago. "It's not that you have to be a rich person to have something worth protecting," he added. "We see it from across the board."

The trigger was a public records disclosure. When the Department of Finance released its supplemental pied-à-terre assessment file, coverage focused on penthouses and the LLCs holding them. But the unfiltered file included far more than luxury properties. It also swept in modest homes in Bayside, single-family houses in Staten Island and other properties whose owners may not have realized their name, address and assessed value were sitting in a publicly searchable dataset. Many still do not know.

Fischer said the reaction was predictable. "Anonymity is desirable when it can be achieved," he said, "but anonymity is also typically only one piece of the pie, so to speak. It's part of the tax plan, part of the estate plan, part of the asset protection, limitation-on-liability sort of pie." In other words, privacy is the door; estate planning is what lies behind it.

The trip-and-fall scenario

For Fischer, the most basic reason to move real estate into an LLC or trust has nothing to do with taxes or public records. It is liability, and that applies to a million-dollar house in Staten Island as directly as it does to a Central Park South penthouse. The median price to buy a cooperative in Manhattan is $850,000 and to buy a condo is $1.75 million, netting out to $1.225 million combined.

The example he gives is straightforward: someone slips and falls on your property. If the property is owned by an LLC or trust instead of being held in the owner's name, the injured party can sue the entity, but the owner's personal assets — savings, other real estate and retirement accounts — remain out of reach. "The only thing that's subject to that lawsuit would be the assets inside that LLC or trust," Fischer said. "All my personal assets would be protected."

There are ways to pierce that structure if the entity is mismanaged, he noted, including treating it "like a piggy bank," commingling funds or failing to maintain proper records. But a properly maintained LLC keeps personal exposure bounded.

Fischer also pushed back, gently, on the idea that this kind of planning is only for the wealthy. Speaking about homeowners who may be caught up in the pied-à-terre property list, he said even mom-and-pop owners can have a case for these structures. "You have these poor people in Staten Island whose names are on Mamdani's list, and in their mind they're poor. They have a million-dollar house, but that's probably five times their other assets. It's quite perverse," he said.

Mom-and-pop owners, he said, use the same structures as the ultrawealthy for four core reasons: to limit liability, organize assets, avoid probate and mitigate taxes.

The look-through caveat

Before anyone rushes to restructure, Denisse Moderski, a state and local tax partner at PKF O'Connor Davies, points to an important limitation: moving a property into an LLC or trust does not, by itself, remove an owner from the pied-à-terre surcharge.

"Even with a trust, the city has come out that they are applying a look-through," she told Fortune. "So even if you start moving properties into a trust, you still have to wonder what records the city is going to have to look through — because there's a potential risk here that even if you transfer this property into an LLC or an entity, this look-through rule would apply and it could still subject a taxpayer to the surcharge."

Under the look-through rule, the city treats the beneficial owner of an entity as the taxpayer for surcharge purposes. A different name on the deed does not change who owes the bill. Restructuring may address privacy and liability, but it does not eliminate the surcharge itself.

"They have assessed this value on properties at much lower value, but the rate is much higher," Moderski said. "When you're thinking about assessment, you have to look at it from both angles."

She said she has seen more outreach from owners who are not traditional trusts-and-estates clients. "I can tell, especially with higher-profile posts, they may want to because they don't want this public information to be out there," she said. Privacy remains a real motivation, even if the look-through rule affects only the tax bill and not the public-records exposure.

A property held in an LLC or a trust with a name such as "Five Park Place Trust" is a different public-records entry from one held in an individual's name.

How the wealthy title their holdings

Fischer declined to discuss any specific names that appeared in recent property-list coverage, but he described a common pattern among ultrawealthy owners seeking anonymity. They often title trusts with unrelated names, such as "the XYZ trust" or "the Five Park Place trust," rather than their own names, and it is frequently a revocable living trust — the backbone of a broader estate plan — that holds the property.

He suggested the pied-à-terre episode points to a structural fix that middle-income owners could also consider: a standalone entity used only to hold real estate for public assessor records, separate from a person's larger estate-planning structure. That way, privacy on property records would not require restructuring an entire estate plan every time the law changes.

What happens when there is no plan

The most serious version of this conversation is not about the pied-à-terre tax. It is about what happens to a home after the owner dies.

Fischer described a case that stayed with him: a client who died in his early 30s without a will, leaving behind a spouse and young children. Under New York intestate law, which applies when there is no will, the estate was split by statute between the widow and a trust for the children. The couple's apartment was deeded half to the widow and half into trust for a minor. "Not what the poor 30-year-old husband would have wanted," Fischer said, but without a document expressing his wishes, the statute supplied the answer.

A trust changes that. It allows an owner to control not only who inherits, but when and how. It can keep an inheritance out of the hands of an 18-year-old, keep assets out of a contested probate proceeding and preserve the "protected" quality of wealth for the next generation in the same way it was protected for the person who built it.

None of that is new. The planning has long been available to anyone willing to pay for it. What changed last month is that a spreadsheet briefly made a few hundred thousand New York homeowners aware that their name was in a public record they had never thought about, and some began asking questions that their wealthier neighbors answered years ago.

That liability piece applies just as much to a single-family home in Bayside as it does to a Manhattan penthouse. Fischer's trip-and-fall scenario is simple: if someone is injured on a homeowner's property and that property sits inside an LLC or trust rather than in the owner's name, "the only thing that's subject to that lawsuit would be the assets inside that LLC or trust. So all my personal assets would be protected."

He said there are ways to pierce that structure, but as long as the entity is properly maintained — and not treated "like a piggy bank" — personal exposure stops at the trust or LLC's edge.

Moderski echoed that caution. "Even with a trust, the city has come out that they are applying a look-through. So even if you start moving properties into a trust," she told Fortune, "you still have to wonder what records the city is going to have to look through — because there's a potential risk here that even if you transfer this property into an LLC or an entity, this look-through rule would apply and it could still subject a taxpayer to the surcharge."

This story was originally featured on Fortune.com