A beneficiary depends on the trustee to manage the trust’s assets and make the distributions the trust calls for. Most trustees do that. Some mismanage the assets, ignore the terms of the trust, stop communicating, or use the position for their own benefit. When that happens, New York law gives the beneficiaries a remedy: a petition to the Surrogate’s Court to remove the trustee.
We represent beneficiaries who want a negligent, self-dealing or unfit trustee removed, and we represent trustees who are defending a removal petition they believe is unjustified. This page explains the grounds on which a New York court will remove a trustee, how the proceeding works, and what else can be recovered along the way.
What a Trustee Owes the Beneficiaries
A trustee is the person or institution responsible for administering the trust according to its terms and the law. The duties a New York trustee owes the beneficiaries are among the highest obligations the law recognizes.
| Duty | What it requires |
|---|---|
| Loyalty | Act solely in the beneficiaries’ interest; no self-dealing and no conflicts of interest. |
| Prudence | Under New York’s Prudent Investor Act, manage and invest the trust’s assets with reasonable care, skill and caution. |
| Impartiality | Where there is more than one beneficiary, treat them fairly rather than favoring one over another. |
| Accounting | Keep accurate records and give the beneficiaries information about the administration of the trust. |
| Administration by the terms | Follow the instructions in the trust instrument. |
A trustee who violates one or more of these duties exposes themselves to legal action by the beneficiaries, which can include a petition to remove them.
Grounds for Removing a Trustee in New York
New York courts do not remove trustees lightly. The grantor chose this trustee, and the court gives that choice weight. But the Surrogate’s Court Procedure Act and the Estates, Powers and Trusts Law provide clear grounds for removal when a trustee fails in the job, and the common ones are these.
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Breach of fiduciary duty
The most common ground. A trustee who acts in their own interest rather than the beneficiaries’, engages in self-dealing, or otherwise violates fiduciary obligations can be removed. Typical examples are using trust funds for personal expenses, lending trust money to oneself, or improperly favoring certain beneficiaries.
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Mismanagement of trust assets
Reckless investments, failure to diversify, letting property deteriorate, or allowing assets to lose value through neglect. New York holds trustees to the prudent investor standard, and persistent mismanagement justifies removal.
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Failure to account or provide information
Beneficiaries are entitled to information about the trust. A trustee who refuses to provide accountings, hides financial records, or stonewalls reasonable requests invites a removal proceeding.
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Conflict of interest
When the trustee’s personal interests conflict with their duties to the beneficiaries, especially where the trustee stands to profit from decisions made as trustee, the court may intervene.
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Hostility between trustee and beneficiaries
Disagreement alone is not enough. Serious and ongoing hostility that interferes with the proper administration of the trust can be, and the court asks whether the friction actually prevents the trustee from doing the job.
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Insolvency or incapacity
A trustee who becomes financially unstable, mentally incapacitated, or otherwise unable to perform can be removed to protect the trust.
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Commingling of funds
Trust assets must be kept separate from the trustee’s own. Mixing them is a serious violation that often supports removal on its own.
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Conviction of a crime or other disqualifying conduct
Certain people are ineligible to serve as fiduciaries in New York at all, including anyone convicted of a felony and anyone shown to be unfit through dishonesty, substance abuse or want of understanding.
Who Can Petition to Remove a Trustee
Standing belongs to the current beneficiaries, to the remainder beneficiaries who will receive the assets later, to a co-trustee who believes a fellow trustee is acting improperly, and to certain other interested persons the court recognizes. If you have a financial interest in the trust and believe the trustee is failing in their duties, you very likely have the right to bring the proceeding; the harder question is whether the evidence is strong enough to win it.
How a Trustee Removal Proceeding Works
Removal is a formal proceeding, usually filed in the Surrogate’s Court of the county where the trust is administered. It generally follows these steps.
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Investigation and evidence gathering
Before filing, we review the trust instrument, financial records, accountings, correspondence and bank statements. The burden of proof is on the party seeking removal, so the evidence has to be assembled first.
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The petition
The petition sets out the grounds for removal and the supporting facts, and must show why removal serves the interests of the trust and its beneficiaries rather than one beneficiary’s preference.
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Notice to interested parties
The trustee and the other beneficiaries receive notice of the proceeding and an opportunity to respond.
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Compelling an accounting
In many cases the petitioner also asks the court to compel the trustee to file a formal accounting. The accounting shows how the trustee has handled the assets and often produces the evidence of mismanagement.
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Discovery and litigation
The parties exchange documents, take depositions, and retain experts on financial issues where needed. The trustee has a full opportunity to defend their conduct.
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Hearing and decision
If the case does not settle, the court holds a hearing and decides whether to remove the trustee. If it does, it appoints a successor trustee and may order the removed trustee to repay losses their misconduct caused.
Suspension While the Case Is Pending
Where the trustee’s continued service threatens the trust, the court can suspend the trustee’s powers while the removal proceeding is pending. Suspension protects the assets from further harm during the litigation. If trust assets are at immediate risk, this is the first thing to ask for.
Remedies Beyond Removal
Removal replaces the trustee; it does not by itself restore what was lost. Depending on the facts, the same proceeding can seek a surcharge, holding the trustee personally liable to repay the losses their misconduct or mismanagement caused; disgorgement of the commissions and fees the trustee collected while in breach; a compelled accounting, forcing full disclosure of the trust’s administration; and injunctive relief preventing the trustee from taking specific harmful actions. Combined with removal, these remedies are what actually restore the value of the trust.
What the Trustee Will Argue
A trustee facing removal will usually defend vigorously, arguing that their decisions were reasonable and within the discretion the trust gave them, and that the beneficiaries’ complaints amount to personal dissatisfaction rather than misconduct. Sometimes that is true, and a trustee with good records and a defensible investment record can defeat the petition. The proceeding turns on whether the evidence shows genuine misconduct or defensible business judgment, which is why the accounting and the financial records matter more than anything either side says about the other.
How We Handle Trustee Removal Cases
For a beneficiary, we review the trust instrument and assess whether the trustee has breached their duties, investigate the trustee’s handling of the assets, advise on standing and the likelihood of success, pursue a compelled accounting, file and litigate the removal petition in the appropriate Surrogate’s Court, seek the appointment of a qualified successor, pursue surcharge and the other remedies described above, and negotiate a settlement when one serves the client’s interests. For a trustee, we do the same analysis from the other side and prepare the accounting and the defense. See also our page on removing a trustee.
Frequently Asked Questions
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How long does it take to remove a trustee in New York?
It depends on the complexity of the case, how hard the trustee resists, and the court’s calendar. A contested removal proceeding can take many months or longer, particularly where extensive discovery is needed.
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Can a trustee be removed just because the beneficiaries do not like them?
No. The court requires actual grounds, such as breach of fiduciary duty, mismanagement, or hostility serious enough to interfere with administration. Personal disagreement is not enough.
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Who pays the cost of removing a trustee?
Where the trustee engaged in misconduct, the court may order the legal fees paid from the trust or by the trustee personally. In other cases each side bears its own.
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What happens to the trust after the trustee is removed?
The court appoints a successor trustee, either the person named in the trust instrument or someone the court selects. The successor takes over the administration and is bound by the same duties.
Talk to Us About a Trustee Removal
If you believe a trustee is mismanaging a trust or breaching their duties, or if you are a trustee facing a removal petition, the sooner the evidence is assembled the better the position. Call 212-233-1233 or email [email protected].
