How Trust Administration Works in New York: A Successor Trustee's Guide

By Albert Goodwin, Esq., attorney admitted in New York. Last reviewed 2025. Dollar figures for the New York estate tax and federal estate tax are the 2025 amounts and are adjusted each year.

Trust administration is the work a trustee does from the moment property is held in the trust's name until the last distribution is made and the trustee is released. In New York that work is governed by the Estates, Powers and Trusts Law (EPTL), the Surrogate's Court Procedure Act (SCPA), and the Tax Law. A funded revocable living trust keeps most assets out of Surrogate's Court probate, but it does not relieve the trustee of fiduciary duties, tax filings, or the risk of personal liability for mistakes.

This page is written for the person who has just become the successor trustee of a New York trust, usually after the grantor's death, and for the beneficiary who wants to know what the trustee is supposed to be doing. It covers the New York rules that national guides leave out: Surrogate's Court jurisdiction over lifetime trusts, the statutory commission schedule, the New York resident-trust income tax rules, and the New York estate tax cliff. For the accounting process and beneficiary rights in detail, we link to our separate pages rather than repeat them here. If you need an attorney to handle the administration for you, see our trust attorney services page.

Before anything else: confirm the trust is valid and funded

A New York lifetime trust must be in writing, signed by the grantor and by at least one trustee (unless the grantor was the sole trustee), and either acknowledged before a notary in the manner of a deed or signed in the presence of two witnesses (EPTL 7-1.17). Amendments must follow the same formalities. A successor trustee should read the original instrument and every amendment together, because a later amendment often changes the trustee succession, the beneficiaries, or both.

Under EPTL 7-1.18, a lifetime trust is valid only as to assets that were actually transferred into it. A recital in the trust agreement that "all my property is hereby assigned to the trust" does not accomplish the transfer. Real property must have been conveyed by a recorded deed. Bank and brokerage accounts must have been retitled in the name of the trustee or the trust. Assets that cannot be registered, such as personal effects or an unregistered partnership interest, must have been assigned in a signed writing. If the grantor signed the trust and never retitled anything, there is nothing to administer, and the assets pass under the will or by intestacy instead. Our page on which assets can and cannot go into a revocable trust explains the funding rules asset by asset.

New York has no statutory "certification of trust" form. Banks and transfer agents usually accept a copy of the trust pages that identify the trustee, the successor trustee, and the trustee powers, together with the grantor's death certificate and a short affidavit from the successor trustee. Sign a written acceptance of the trusteeship if the instrument calls for one, and keep it with the trust records. A trustee of a lifetime trust does not receive letters from the Surrogate's Court unless someone petitions for them, which is rare.

The first 90 days after the grantor's death

The following checklist assumes a revocable living trust that became irrevocable at the grantor's death. The windows are practical, not statutory, except where a statute is cited.

Days 1 to 14

• Death certificates: order at least ten certified copies from the New York City Department of Health (for deaths in the five boroughs) or the local registrar elsewhere in the state. Each financial institution will want an original.
• Secure the property: change locks on vacant real estate, confirm homeowner's insurance is in force and notify the carrier that the property is now held by a successor trustee, and locate titles, deeds, statements, and the prior trustee's records.
• Identify the beneficiaries: list every current and remainder beneficiary with addresses. New York courts recognize a beneficiary's right to know the trust exists and to see the parts of the instrument that affect their interest. Early contact prevents later accusations of concealment.
• Find the pour-over will: almost every revocable trust is paired with a will that leaves any leftover assets to the trust. See the next section on why that will may still need to be probated.

Days 15 to 45

• Employer identification number: once the trust is irrevocable it can no longer report under the grantor's Social Security number. Apply online to the IRS on Form SS-4. The trust's tax year begins on the date of death.
• Trust bank account: open a checking account in the trust's name using the new EIN and move cash into it. Paying trust expenses from a personal account, or depositing trust money into one, violates EPTL 11-1.6 and is the single most common fact pattern in surcharge proceedings.
• Date-of-death values: request date-of-death statements from every bank and brokerage. Hire a licensed appraiser for real estate and for any business interest. These values set the stepped-up income tax basis under IRC 1014 and are the starting point for any estate tax return.
• Decide whether an estate tax return is required: add the trust assets to everything else the grantor owned or controlled at death, including life insurance, jointly held property, and retirement accounts. If the total approaches $7,160,000 (the 2025 New York basic exclusion amount), see the estate tax section below. The New York return, Form ET-706, is due nine months after death.
• Consider the IRC 645 election: where there is also a probate estate, the trustee and executor can elect to treat the trust as part of the estate for income tax purposes, which permits a fiscal year and a single return. The election is made on the first Form 1041.

Days 45 to 90

• Debts and expenses: gather the grantor's bills, final medical expenses, and any mortgage or tax liens on trust real estate. A trust is not protected by the seven-month creditor window that applies to a probate estate under SCPA 1802, and a trustee who distributes with knowledge of unpaid claims can be personally liable to the extent of the distribution.
• Medicaid check: if the grantor received Medicaid, confirm whether the local Department of Social Services has asserted a claim. New York limits estate recovery to the probate estate (Social Services Law 369), so assets held in a properly drafted trust are generally outside recovery, but any lien recorded against real property must be addressed before a sale.
• Investment review: the Prudent Investor Act (EPTL 11-2.3) applies from the day the successor takes over. A concentrated stock position that was fine for the grantor to hold is not automatically fine for the trustee to keep. Document the decision either way.
• Written plan to beneficiaries: send a short letter describing the assets, the expected timeline, and whether an estate tax return will be filed. This is not required by statute, but it answers the questions that otherwise turn into a petition to compel an accounting.

The pour-over will still needs probate

A pour-over will directs that any property not in the trust at death be added to the trust. The will does not move the property by itself. If the grantor died owning assets in their own name, the will must be admitted to probate in the Surrogate's Court of the county where the grantor was domiciled, and the executor then transfers the assets to the trustee. If the probate assets are personal property worth $50,000 or less, the shortcut voluntary administration proceeding under SCPA Article 13 is available. Real property in the grantor's individual name cannot use the shortcut.

Typical items that end up outside the trust: a car, a refund check, a bank account opened after the trust was signed, and a life insurance policy or retirement account that named the estate as beneficiary. Our sample New York City probate timeline shows how long that side of the process takes. If there is no will at all for the stray assets, see our page on estate administration without a will.

Real property held by the trust

Where the trust holds a house, condominium, or building, the successor trustee usually must either sell it or deed it out to the beneficiaries. In either case a new deed is recorded.

• Where to record: property in Manhattan, the Bronx, Brooklyn, and Queens is recorded with the New York City Register through the ACRIS system. Property in Staten Island is recorded with the Richmond County Clerk. Property outside the city is recorded with the County Clerk of the county where it sits.
• Forms that accompany the deed: the New York State Combined Real Estate Transfer Tax Return (Form TP-584), the Real Property Transfer Report (Form RP-5217, or RP-5217NYC inside the city), and, for city property, the New York City Real Property Transfer Tax return (NYC-RPT). A distribution from the trustee to a beneficiary for no consideration is generally exempt from transfer tax, but the forms must still be filed and the exemption claimed on them.
• Co-op apartments: cooperative shares are personal property, not real property, and are not recorded with the Register. The transfer requires the cooperative's consent and a new stock certificate and proprietary lease. Many boards never approved the original transfer into the trust, and the successor trustee discovers this only when trying to sell.
• A beneficiary who wants the house: if one beneficiary wants to keep the property and the others want cash, the trustee cannot favor one side. See our page on a beneficiary buying property from a trust for how the price is set and documented.

Surrogate's Court jurisdiction over a lifetime trust (SCPA 207)

People often assume a living trust never comes before a court. It can. SCPA 207 gives the Surrogate's Court jurisdiction over any lifetime trust that has assets in New York, has a trustee residing in New York, or was created by a grantor domiciled in New York. The Supreme Court has concurrent jurisdiction, but trust proceedings are nearly always brought in the Surrogate's Court because that court handles them routinely.

Venue is the county where the grantor is domiciled when the proceeding starts. If the grantor has died, it is the county of the grantor's domicile at death. A trustee who wants a judicial settlement of the account, a beneficiary who wants to compel an accounting under SCPA 2205, or anyone who wants to remove a trustee files in that county.

Resignation, removal, and successor appointment (EPTL 7-2.6)

A trustee who wants to step down must follow the instrument. Most modern trusts allow resignation by a written notice to the beneficiaries and the named successor. If the instrument is silent, EPTL 7-2.6(a) requires a court order accepting the resignation, and the court will usually condition the discharge on an accounting.

Beneficiaries can ask the court to remove a trustee under EPTL 7-2.6 and SCPA 711 for violating or threatening to violate the trust, for insolvency, or for being otherwise unsuitable to serve. Hostility between a trustee and a beneficiary is not by itself a ground for removal unless it interferes with the administration. When the last named trustee dies and no successor is named, EPTL 7-2.3 provides that the trust estate does not pass to the trustee's heirs; the court appoints a successor on petition. For the standards courts apply, see our pages on breach of trust and breach of fiduciary duty.

Co-trustees who cannot agree

Under EPTL 10-10.7, where there are three or more trustees a majority may act. Where there are two, both must agree. A two-trustee deadlock over whether to sell a building or make a discretionary distribution has no statutory tie-breaker. The options are a petition to the Surrogate's Court under SCPA 207 for instructions, a petition to remove one trustee under EPTL 7-2.6, or decanting the trust under EPTL 10-6.6 into a new instrument with a different governance structure, if the trustees have the required discretion over principal and the decanting statute's notice requirements are met.

Trustee commissions under SCPA 2309

Unless the trust instrument sets a different fee or waives compensation, a New York trustee is entitled to statutory commissions under SCPA 2309. There are two kinds.

• Annual commissions on principal (SCPA 2309(2)): $10.50 per $1,000 on the first $400,000 of principal (1.05%), $4.50 per $1,000 on the next $600,000 (0.45%), and $3.00 per $1,000 on everything above $1,000,000 (0.30%). The commission is computed each year on the fair market value of the principal. Unless the instrument says otherwise, one-third is charged to income and two-thirds to principal (SCPA 2309(3)).
• Paying-out commissions (SCPA 2309(1)): 1% of the principal distributed when it is paid out of the trust.
• Rental real estate: a trustee who collects rents and manages real property is entitled to an additional 6% of gross rents collected (SCPA 2309(5)).

A worked example. A trust holds $1,500,000 of marketable securities. The annual principal commission is $4,200 on the first $400,000, plus $2,700 on the next $600,000, plus $1,500 on the remaining $500,000, for a total of $8,400 per year. If the trustee administers the trust for two years and then distributes all $1,500,000, the paying-out commission is $15,000. The trustee's total statutory compensation over the two years is $31,800 before any adjustment for changes in value.

Where there is more than one trustee, SCPA 2309(6) controls how many full commissions are available. If the principal is under $100,000, the trustees share one full commission. If it is $100,000 or more but under $400,000, each of up to two trustees takes a full commission, and three or more share two. If it is $400,000 or more, each of up to three trustees takes a full commission, and more than three share three. A bank or trust company serving as trustee charges under its published fee schedule rather than the statutory rates where SCPA 2312 permits; see our page on a bank as trustee.

Commissions must be disclosed in the accounting. A trustee who takes commissions without disclosure, or who takes them in advance without court authority, risks being ordered to return them. A trustee found to have breached the trust may be denied commissions entirely.

Income tax: the New York resident-trust rules

The trustee files federal Form 1041 if the trust has gross income of $600 or more, any taxable income, or a nonresident alien beneficiary. The New York counterpart is Form IT-205. Both are due on the fifteenth day of the fourth month after the trust's year end, which is April 15 for a calendar-year trust, with extensions available.

A trust is a New York resident trust under Tax Law 605(b)(3) if it was created under the will of a New York domiciliary, or if it is a lifetime trust and the grantor was domiciled in New York when the trust was created or when it became irrevocable. Residence follows the grantor, not the trustee or the beneficiaries. A revocable trust created by a Brooklyn resident remains a New York resident trust forever, even if the successor trustee lives in Florida and every beneficiary lives in New Jersey.

Tax Law 605(b)(3)(D) then provides the exemption that matters most. A resident trust pays no New York fiduciary income tax if all three of the following are true for the entire year:

1. all of the trustees are domiciled outside New York State;
2. the entire corpus of the trust, including real and tangible personal property, is located outside New York State; and
3. all income and gains of the trust are derived from sources outside New York State.

If any one prong fails, the trust pays New York tax on all of its undistributed income. Intangible assets such as securities are treated as located where the trustee is domiciled, so a trust holding only a brokerage account with an out-of-state trustee can qualify. A trust holding a Queens two-family house cannot. An exempt resident trust must still file Form IT-205 and attach the certification on Form IT-205-C.

Two 2014 amendments close the obvious planning routes. Under Tax Law 612(b)(40), income accumulated in an exempt resident trust after 2013 and later distributed to a New York resident beneficiary is taxed to that beneficiary in the year of distribution (the "throwback" rule). Under Tax Law 612(b)(41), an incomplete-gift non-grantor trust is treated as a grantor trust for New York purposes, so the grantor is taxed on its income. A successor trustee who inherits one of these structures needs to confirm which rule applies before making distributions.

Estate tax: the New York cliff

Assets in a revocable trust are included in the grantor's gross estate for both federal and New York estate tax. Assets in an irrevocable trust may or may not be, depending on what powers the grantor kept. The trustee of a revocable trust is usually the person who files the return, because there is often no executor.

For deaths in 2025, the federal basic exclusion is $13,990,000 and the New York basic exclusion is $7,160,000. The New York figure is indexed annually. New York has no gift tax, but for deaths before January 1, 2026, taxable gifts made within three years of death are added back to the New York gross estate under Tax Law 954(a)(3).

The New York exclusion works differently from the federal one. Under Tax Law 952(c), the applicable credit phases out as the taxable estate exceeds the basic exclusion, and disappears entirely once the taxable estate exceeds 105% of it. For 2025 the 105% threshold is $7,518,000. Three illustrations:

• A taxable estate of $7,100,000 owes no New York estate tax.
• A taxable estate of $7,400,000 is inside the phase-out band. The tax is not computed only on the $240,000 excess. The credit shrinks sharply across the band and the effective marginal rate on each additional dollar is well above 100%.
• A taxable estate of $7,600,000 is over the 105% line. The exclusion is lost on the whole estate, and the tax under the rate table is approximately $726,800, computed on the full $7,600,000 from the first dollar.

For estates near the threshold, charitable bequests, disclaimers, and the timing of expense deductions can move an estate from one side of the cliff to the other. The return, Form ET-706, is due nine months after death, and interest runs from that date on any unpaid tax. New York also apportions the tax among the beneficiaries under EPTL 2-1.8 unless the instrument directs otherwise, so a trustee must calculate each beneficiary's share of the tax before distributing. A trustee who distributes first and discovers the tax later may be personally liable to the extent of the assets that were in the trustee's hands.

Administering a Medicaid asset protection trust

A Medicaid asset protection trust is an irrevocable income-only trust. The grantor keeps the right to income and often the right to live in the house, but has no right to principal. Administration starts when the trust is funded during the grantor's lifetime, not at death, and the trustee's conduct during those years determines whether the trust works.

• During the grantor's life: the trustee may pay income to the grantor but must never distribute principal to the grantor or pay the grantor's expenses from principal. A single principal distribution to the grantor can be treated as making the entire trust available for Medicaid purposes. Transfers into the trust start the 60-month look-back for nursing home Medicaid under Social Services Law 366.
• Income tax during life: most of these trusts are drafted as grantor trusts, so the income is reported on the grantor's own return and the trust files an informational Form 1041, if any. The grantor's retained interest keeps the house includible in the grantor's estate under IRC 2036, which is what preserves the stepped-up basis for the children at death.
• Selling the house during life: because the trust is a grantor trust and the grantor retains occupancy, the IRC 121 exclusion on sale of a principal residence is generally still available. The sale proceeds must stay in the trust; they cannot be paid to the grantor.
• After the grantor's death: the trust is no longer a grantor trust. Obtain an EIN, file Form 1041 and IT-205 for post-death income, confirm with the local Department of Social Services that no claim or lien is asserted, and distribute to the remainder beneficiaries. The remainder beneficiaries take the house with a basis equal to its date-of-death value.

Duties, information, and accountings: the short version

A New York trustee must act solely in the beneficiaries' interest, treat income and remainder beneficiaries impartially under the Principal and Income Act (EPTL Article 11-A), invest under the Prudent Investor Act (EPTL 11-2.3), keep trust assets separate (EPTL 11-1.6), and keep records sufficient to account. The trustee's statutory powers, where the instrument is silent, are listed in EPTL 11-1.1.

Beneficiaries are entitled to information about the trust and its administration, and a beneficiary who is refused can petition under SCPA 2205 to compel an accounting. Our page on beneficiaries' rights to trust information covers what must be disclosed and when.

Most trusts are settled informally: the trustee delivers an accounting with supporting records and each beneficiary signs a receipt and release. Where a beneficiary will not sign, is a minor, or disputes the administration, the trustee petitions for judicial settlement under SCPA 2208 and 2209 in the county described above. Our accountings page explains the format of a New York fiduciary accounting, the objection process, and what a judicial settlement costs in time. For whether the trust's contents become public when a proceeding is filed, see are trusts public record.

Three patterns we see in New York trust matters

The following are composite scenarios drawn from the kinds of matters that come to our office. Details are changed and no outcome is described.

Distributing before the estate tax is paid. A successor trustee of a revocable trust holding a Manhattan condominium and a brokerage account sells the condominium, splits the proceeds among four siblings within six months of death, and only then learns from the accountant that the grantor's total estate, including a life insurance policy payable to the children, was over the 105% threshold. The trust is empty, the ET-706 is due in three months, and the trustee is the person the Department of Taxation and Finance looks to first. The fix, where there is one, involves recovering contributions from the beneficiaries under EPTL 2-1.8, and it is far more expensive than holding a reserve would have been.

Two co-trustees, one building, no majority. A Bronx grantor named two children as co-trustees of a trust holding a six-unit rental building. One wants to sell and distribute; the other wants to keep the building and collect rents. Under EPTL 10-10.7 neither can act alone. The rents accumulate in an account that neither will sign on, repairs go unmade, and the tenants start calling the city. The matter ends up in the Bronx Surrogate's Court under SCPA 207, with each co-trustee seeking instructions and the other's removal. The grantor could have avoided this with a tie-breaker clause or a third trustee.

The co-op that was never transferred. A grantor signed a revocable trust and a deed-style assignment of her Queens co-op shares, but the cooperative board was never asked to approve the transfer and never issued a new stock certificate. At her death the shares are still in her name. The successor trustee cannot sell the apartment. The pour-over will has to be probated in Queens County Surrogate's Court before the executor can transfer the shares to the trustee, who can then sell. The trust saved nothing on that asset, and the family's expectation that "there would be no probate" was wrong because of a funding step that EPTL 7-1.18 requires.

How long New York trust administration takes

A trust holding only cash and marketable securities, with cooperative beneficiaries and no estate tax return, can usually be administered in six to twelve months. The time is driven by the wait for final income tax returns and the beneficiaries' signatures on releases. Add a house to be sold, and the timeline becomes the sale timeline plus several months. Add an estate tax return, and the trustee should hold a reserve until the New York closing letter arrives, which commonly takes a year or more after filing. Add a judicial accounting with objections, and two to three years is not unusual in the New York City Surrogate's Courts.

Frequently asked questions

Does a successor trustee in New York need court approval to act?

No. A successor named in the instrument takes office under the terms of the instrument, usually by signing a written acceptance. Court involvement is needed only if the instrument names no available successor (EPTL 7-2.3), if someone seeks to remove the trustee (EPTL 7-2.6), or if the trustee wants a judicial settlement of the account.

What are New York trustee commissions?

Under SCPA 2309, annual commissions on principal of 1.05% on the first $400,000, 0.45% on the next $600,000, and 0.30% above $1,000,000, plus a 1% paying-out commission on principal distributed, unless the trust instrument provides otherwise. A trustee managing rental property also receives 6% of gross rents.

Does a New York trustee have to account?

A trustee is not required to file an accounting on their own initiative, but must account when a beneficiary asks, when the trust terminates and the trustee wants releases, or when the court orders it. A beneficiary who is refused can petition under SCPA 2205.

Is my trust a New York resident trust?

If the grantor was domiciled in New York when the trust was created or became irrevocable, yes, regardless of where the trustee or beneficiaries live. The trust escapes New York fiduciary income tax only if all trustees are domiciled outside New York, no trust assets are located in New York, and no income is from New York sources (Tax Law 605(b)(3)(D)).

Does a revocable trust reduce New York estate tax?

No. Assets in a revocable trust are included in the grantor's taxable estate. The trust avoids probate, not estate tax. Estates over $7,160,000 (2025) need to plan around the cliff at $7,518,000.

Can a trustee of a New York living trust be removed?

Yes, by the Surrogate's Court under EPTL 7-2.6 and SCPA 711 for violating the trust, insolvency, or unsuitability. Disagreement with beneficiaries is not enough by itself; the petitioner must show misconduct or that the trustee's continued service is harming the trust.

Talk to us

If you are the successor trustee of a New York trust and want the administration done correctly, or a beneficiary who believes a trustee is not doing it correctly, we can help. Call 212-233-1233 or email [email protected]. For the scope of what we handle as trust counsel, see our New York trust attorney page.