A trustee who will not account, deals with trust property for their own benefit or simply cannot do the job can be removed by the Surrogate’s Court, but not easily. New York courts start from the position that the person who made the trust chose the trustee and that choice deserves respect, so the beneficiary who petitions has to prove specific statutory grounds with real evidence. We represent beneficiaries, co-trustees and other interested parties in trustee removal proceedings across New York, and we also defend trustees against removal petitions, so we know how both sides of the case are built. This page describes the grounds, the procedure, the remedies that go with removal and the alternatives.
What a trustee owes the beneficiaries
A trustee is a fiduciary who manages the trust property for the beneficiaries, and New York law attaches a set of duties to the office. The duty of loyalty requires the trustee to act solely in the beneficiaries’ interest and to avoid conflicts. The duty of prudence requires the trustee to manage the assets as a reasonable and prudent person would manage their own, and under the Prudent Investor Act to diversify unless the trust instrument says otherwise. The duty to account requires accurate records and periodic accountings; the duty to inform entitles beneficiaries to material information about the trust; and where there is more than one beneficiary the duty of impartiality requires the trustee to balance their competing interests fairly. A breach of any of these can be a ground for removal, and a serious breach usually is.
Grounds for removal
SCPA § 711 lists the grounds on which the Surrogate’s Court may suspend, modify or revoke a trustee’s letters after a hearing. A petitioner may proceed where the trustee has wasted or improperly applied trust assets; has willfully refused or without good cause neglected to obey a court order; is unfit for the office because of dishonesty, drunkenness, improvidence or want of understanding; has failed to file a required inventory or account; has removed or is about to remove property from New York improperly; has commingled trust funds with personal funds; or no longer resides in New York and the absence impairs administration. SCPA § 719 goes further and lets the court revoke letters without a formal hearing in certain cases, including a felony conviction, an adjudication of incapacity, or a failure to obey a court directive.
In practice the petitions we see rest on a handful of fact patterns: self-dealing, meaning the trustee used trust assets personally or transacted with the trust on favorable terms; a refusal to disclose financial information or to account; imprudent or undiversified investments; hostility with the beneficiaries severe enough to interfere with administration; favoritism among beneficiaries; outright theft; and a trustee who has become mentally or physically unable to serve. Each has to be tied to one of the statutory grounds above and proved.
How a removal proceeding runs
Removal is a formal proceeding in the Surrogate’s Court of the county where the trust is administered. The steps are these.
Evaluation
We read the trust instrument, the correspondence with the trustee, the financial records and any accountings already provided, and decide whether the facts fit a statutory ground and what evidence will be needed to prove it.
Compelling an accounting
Often the first filing is a petition under SCPA § 2205 to compel the trustee to account. The accounting forces disclosure of every receipt and disbursement, and the irregularities it reveals frequently become the basis of the removal petition.
The petition
A verified petition sets out the specific facts establishing the statutory ground and identifies every interested party who must be cited.
Citation
The court issues a citation that must be served on the trustee, any co-trustees and the beneficiaries. Proper service is what gives the court jurisdiction.
Discovery
Document demands, depositions and subpoenas to banks and investment advisers. Where the trust is at risk during the litigation we also seek injunctive relief.
Suspension
In a serious case we petition under SCPA § 719 to suspend the trustee while the removal proceeding is pending, so that no further damage is done.
Hearing
Both sides present documents and witnesses. The Surrogate decides whether removal serves the best interests of the trust and its beneficiaries.
Successor
If removal is granted the court appoints the successor named in the trust or, if none, a suitable fiduciary.
Remedies that go with removal
Removal is usually one part of a larger case. The same proceeding, or the accounting that runs alongside it, can produce a surcharge ordering the trustee to repay the trust personally for losses caused by the breach; a denial of commissions; disgorgement of any profit the trustee made through self-dealing; an award of attorney’s fees payable from the trust or by the trustee personally; and a constructive trust over specific property that was improperly moved out of the trust. Our breach of fiduciary duty page covers these remedies in more detail.
Why these cases are hard
The burden is high. Courts presume the settlor’s choice should stand, and the petitioner must show misconduct or incapacity with clear, convincing evidence; disagreement with the trustee’s decisions is not enough. The trustee holds the records, so the case depends on using accounting demands, discovery and third-party subpoenas to get at them. Many trust instruments contain exculpatory clauses limiting the trustee’s liability; New York law will not enforce a clause that excuses intentional misconduct or gross negligence, but the clause still complicates the case. And throughout the proceeding the trust has to be protected from further harm, through restraining orders, preliminary injunctions and suspension petitions.
Who may petition
Anyone with a legitimate interest in the trust generally has standing: current income beneficiaries, remainder beneficiaries, contingent beneficiaries in some circumstances, co-trustees, successor trustees named in the instrument, guardians ad litem for minor or incapacitated beneficiaries, and, for a charitable trust, the New York Attorney General.
Alternatives to a removal petition
| Alternative | When it works |
|---|---|
| Voluntary resignation | A direct demand backed by a credible threat of litigation will sometimes prompt the trustee to step down. |
| Mediation | A neutral mediator can negotiate the transition to a new trustee and any financial adjustments. |
| Modification | Where the instrument or the law permits, the trust can be modified to add co-trustees or change administrative provisions. |
| Judicial settlement of the account | The trustee’s accounting proceeding can resolve the disputes with finality while the trusteeship changes hands. |
| Removal power in the trust | Some instruments give beneficiaries or a trust protector the power to remove a trustee without any court. The trust document has to be read first. |
Questions we are often asked
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How long does removal take?
An uncontested removal may be resolved in a few months. A contested proceeding commonly takes one to two years, depending on the issues and the volume of discovery.
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Can the trust pay the trustee’s legal fees?
A trustee may generally use trust funds to defend actions taken in good faith. If the court finds the trustee acted improperly, it can order the trustee to reimburse the trust for those fees.
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What if the trust says the trustee cannot be removed?
Such provisions are not absolute. The courts keep their equitable authority to remove a trustee who commits a serious breach of duty, whatever the instrument says.
If you believe a trustee is breaching their duties or mismanaging the trust, do not wait: trust assets can be dissipated quickly and evidence disappears. We represent clients in the Surrogate’s Courts of New York, Kings, Queens, Bronx, Richmond, Nassau, Suffolk and Westchester counties. Call us at 212-233-1233 or email [email protected].
