Trust Beneficiary Rights in New York: Information, Accounting, Distributions and Removing a Trustee

By Albert Goodwin, Esq., estate and trust litigation attorney, Law Offices of Albert Goodwin, New York City, Brooklyn and Queens.

This page is for beneficiaries of New York trusts who are not getting answers from the trustee. It explains what you are entitled to under the Estates, Powers and Trusts Law (EPTL) and the Surrogate's Court Procedure Act (SCPA), which court hears your dispute, and what a petition to compel an accounting or remove a trustee involves in practice. New York has not adopted the Uniform Trust Code, so rights that beneficiaries in other states take from a single statute come, in New York, from scattered provisions of the EPTL and SCPA and from decades of Court of Appeals and Appellate Division decisions. The sections below cite the provisions that matter.

First question: revocable or irrevocable, and who the trustee answers to

Your rights depend on whether the trust is still revocable. In New York the default runs the opposite way from what many people expect. Under EPTL 7-1.16, a lifetime trust is irrevocable unless the instrument expressly says it is revocable. A revocable trust also becomes irrevocable when the grantor dies, because no one is left with the power to revoke it.

While the grantor of a revocable trust is alive and competent, the trustee's duties run to the grantor. The grantor can amend the trust (in a writing executed under EPTL 7-1.17) or remove you as a beneficiary. Courts in New York have generally held that a remainder beneficiary of a revocable trust lacks standing to demand an accounting or challenge the trustee's conduct during that period. The picture changes at the grantor's death, and it can change earlier if the grantor becomes incapacitated and the trustee or an agent under a power of attorney begins managing assets for a person who can no longer supervise them. If you suspect that is happening, see our page on abuse of a power of attorney.

Irrevocable trusts are common while the grantor is still alive. Medicaid Asset Protection Trusts, Grantor Retained Annuity Trusts (GRATs), irrevocable life insurance trusts and supplemental needs trusts are all examples. Beneficiaries of these trusts have enforceable rights now, not only after the grantor's death.

A note on tax identification numbers: a separate EIN does not tell you whether a trust is irrevocable. Many irrevocable trusts are "grantor trusts" for federal income tax purposes and report under the grantor's Social Security number (see Treas. Reg. 1.671-4). A non-grantor trust files its own Form 1041 under an EIN. The only reliable test is the language of the trust instrument, read together with EPTL 7-1.16.

Which New York court hears a trust dispute

• Testamentary trusts (created under a will): the Surrogate's Court that admitted the will to probate. The trustee receives letters of trusteeship from that court (SCPA 1501), and the court supervises the trust from then on.
• Lifetime (inter vivos) trusts: either Supreme Court or Surrogate's Court. SCPA 207 gives the Surrogate's Court jurisdiction over a lifetime trust where, among other grounds, the grantor was domiciled in the county, the trustee resides there, or trust assets are located there. In practice most beneficiaries file in Surrogate's Court because its judges and clerks handle fiduciary accountings every day and the SCPA provides ready-made procedures. If a trustee of a lifetime trust dies, resigns or is removed, the Surrogate's Court can appoint a successor under SCPA 1509.

Right to a copy of the trust and to information about its administration

A trustee owes a duty of loyalty and a duty to keep beneficiaries reasonably informed. New York has no statute that spells out a 60-day deadline for handing over the trust instrument, but a trustee who refuses to produce it will not fare well before a Surrogate. The procedural tool is SCPA 2102(1), which allows a person interested in the trust to petition the court for an order requiring the fiduciary to supply information concerning the assets or affairs of the trust relevant to the petitioner's interest. The petition is short, the filing fee is modest, and the trustee must answer on a return date set by the court.

Information you are entitled to request includes the trust instrument and any amendments, an inventory of trust assets, statements for trust accounts, records of sales or purchases of trust property, and a description of any transaction between the trust and the trustee, the trustee's family or the trustee's businesses. Lifetime trusts are not filed anywhere, so the trustee is usually the only source; see are trusts public record in New York.

Right to an accounting

An accounting is a formal report, in the schedule format prescribed by the Surrogate's Court, showing what the trustee received, what came in as income, what was spent, what was distributed, what the trustee paid itself in commissions, and what is left. There are two kinds.

• Informal accounting: the trustee sends the account to the beneficiaries and asks each to sign a receipt and release. If the beneficiaries sign, the trustee is discharged without a court proceeding (SCPA 2202). A release is binding unless the beneficiary can show fraud, undue influence, lack of capacity or that the trustee did not make full disclosure. Do not sign one you do not understand.
• Judicial accounting: the trustee files the account in Surrogate's Court, all persons interested are cited (SCPA 2210), and the court settles the account by decree. The decree binds everyone who was a party, including as to matters they could have raised but did not. Matter of Hunter, 4 N.Y.3d 260 (2005).

Compelling an accounting: SCPA 2205 and 2206

If the trustee will not account voluntarily, a person interested in the trust (which includes income beneficiaries, remainder beneficiaries and contingent beneficiaries) may petition under SCPA 2205 for an order compelling the trustee to account. The court issues a citation; on the return date, if the trustee has no valid excuse, the court orders the trustee to file an account within a set period under SCPA 2206. A trustee who ignores that order is in contempt and can be removed under SCPA 719 without a further hearing on the merits.

Objections, examination and surcharge

Once the account is filed, you may examine the trustee under oath about its contents before filing objections (SCPA 2211(2)). Objections are filed in writing and are tried like any other contested matter: document discovery, depositions, and if necessary a trial before the Surrogate. If the court sustains an objection, it surcharges the trustee, meaning the trustee must personally repay the loss to the trust. Common surcharge items include unexplained withdrawals, imprudent investments measured against the Prudent Investor Act (EPTL 11-2.3), excessive commissions, and self-dealing. The deeper mechanics of a contested accounting are covered on our fiduciary accountings page; the substantive theories of liability are on our breach of fiduciary duty page.

How long you have: the open repudiation rule

A beneficiary does not lose the right to an accounting because years have passed. Under New York's open repudiation rule, the limitations period on a claim to compel a trustee to account does not begin to run until the trustee openly repudiates the trust or the fiduciary relationship otherwise ends, and the beneficiary knows or should know of it. Matter of Barabash, 31 N.Y.2d 76 (1972). Claims for damages arising from specific breaches are subject to CPLR 213 and 214 and should be evaluated separately, so do not wait once you learn of a problem.

Right to distributions

The trust instrument controls when you are paid. New York courts sort distribution provisions into three groups.

• Mandatory distributions: income payable quarterly, principal payable at age 25, the house to be conveyed at the grantor's death. The trustee has no discretion, and a petition under SCPA 2102(4) or an objection in an accounting will compel payment.
• Discretionary distributions subject to a standard: typically "health, education, maintenance and support." The trustee decides, but the court reviews the decision for abuse of discretion against the standard. Disputes often turn on interpretation, for example whether "education" covers living expenses between semesters or a graduate program. The court, not the trustee, has the last word on what the words mean.
• Absolute discretion: "the Trustee may, in its sole and absolute discretion, distribute principal to any beneficiary." Courts will not substitute their judgment for the trustee's, but even absolute discretion must be exercised honestly and in good faith. A trustee who refuses to consider a request at all, or who withholds funds to punish a beneficiary, can still be called to account.

Two New York provisions deserve mention. EPTL 7-1.5 makes income interests non-assignable unless the instrument provides otherwise, which protects beneficiaries from creditors but also limits what you can do with your interest. EPTL 7-1.6 permits a court, in limited circumstances, to authorize invasion of principal for the support of an income beneficiary when the trust is silent and the invasion is consistent with the grantor's intent. Beneficiaries who want to buy a trust asset, such as a house, should read buying property from a trust and, if they already live there, beneficiary living in the trust's house.

Limits New York places on trustees

• Acts in contravention of the trust are void (EPTL 7-2.4). A sale or conveyance the trustee had no authority to make can be undone, subject to protections for purchasers who paid value without notice.
• Exculpatory clauses have limits (EPTL 11-1.7). A will provision purporting to excuse an executor or testamentary trustee from liability for failing to exercise reasonable care, diligence and prudence is void as against public policy. Courts have applied similar reasoning to lifetime trusts, though the statute by its terms covers testamentary fiduciaries.
• Commissions are regulated (SCPA 2309). Trustee compensation is set by statute unless the instrument provides otherwise, and a beneficiary may object to commissions taken in advance or in excess of the schedule.
• Self-dealing is presumptively improper. A trustee who sells trust property to himself, a relative or a company he controls bears the burden of proving the transaction was fair, and a court may set it aside regardless of price.

Right to seek removal of the trustee

Removal is a serious remedy and New York courts do not grant it for friction alone. The grounds are statutory.

EPTL 7-2.6 authorizes the Supreme Court to suspend or remove a trustee who has violated or threatens to violate the trust, who is insolvent or whose insolvency is imminent or apprehended (meaning feared, not arrested), or who for any other cause is unsuitable to execute the trust.

SCPA 711 lists grounds on which a person interested may petition the Surrogate's Court to suspend, modify or revoke a fiduciary's letters. Those most often invoked against trustees are:

• wasting or improperly applying trust assets, or otherwise improvidently managing them;
• wilfully refusing or neglecting to obey a court order;
• dishonesty, drunkenness, improvidence or want of understanding making the trustee unfit;
• failing to account after being directed to do so;
• ineligibility under SCPA 707, for example a felony conviction;
• an event the instrument itself specifies as grounds for removal.

SCPA 719 allows the court to remove a fiduciary without a citation or hearing in narrower situations, including failure to file an account after a court order and conviction of a felony. After removal, the court appoints a successor under SCPA 1502 (testamentary trusts) or SCPA 1509 (lifetime trusts), and the removed trustee must turn over the assets and account for the period of service. Corporate trustees raise their own issues; see when a bank is the trustee. For the parallel procedure against executors and administrators, see removing an estate administrator in New York.

Right to seek modification or termination of an irrevocable trust

Beneficiaries cannot unilaterally end a New York trust. The main routes are:

• Revocation by the grantor with beneficiary consent (EPTL 7-1.9). The creator of the trust may revoke or amend it with the written, acknowledged consent of all persons beneficially interested. The power belongs to the grantor; beneficiaries can only consent or withhold consent. A minor cannot consent, and neither a parent nor a guardian ad litem may consent on a minor's behalf, so a trust with minor or unborn beneficiaries generally cannot be revoked this way. EPTL 7-1.9(b) carves out one class: a gift to the grantor's "heirs" or "distributees" as such does not create a beneficial interest requiring consent. Once the grantor has died, 7-1.9 is unavailable.
• Decanting by the trustee (EPTL 10-6.6). A trustee with authority to invade principal may appoint the assets to a new trust with different administrative terms. The statute requires written notice to the persons interested in the trust before the decanting takes effect, and a beneficiary who believes the decanting cuts back vested rights can object.
• Termination of an uneconomical trust (EPTL 7-1.19). Where continued administration is economically impracticable, a trustee or beneficiary may apply to the court to terminate the trust and distribute the assets, provided termination does not defeat the grantor's purpose.
• Court reformation in cases of mistake or changed circumstances, which is granted sparingly and on clear proof.

What to do when the trustee will not respond: a New York roadmap

1. Written request. Ask, in writing, for the trust instrument, an inventory, and account statements. Keep proof of delivery. Many trustees respond once the request is on paper.
2. Attorney demand letter. A letter from counsel citing the trustee's duty to inform and the availability of SCPA 2102 and 2205 relief often produces documents without a filing.
3. SCPA 2102 petition for information. If documents are still withheld, file in the Surrogate's Court with jurisdiction. This is a limited proceeding and moves faster than a full accounting.
4. SCPA 2205 petition to compel an accounting. Filed on its own or combined with step 3. On the return date the court usually directs the trustee to account within a period it sets, often 30 to 90 days.
5. Examination and objections. Review the account with counsel and, where warranted, an accountant. Examine the trustee under SCPA 2211 before objecting. File objections identifying each improper item and the surcharge sought.
6. Removal, if the facts support it. A removal petition under SCPA 711 can be joined with the accounting proceeding. Where assets are at immediate risk, ask for suspension of the trustee's powers and appointment of a temporary fiduciary pending the hearing.

Timelines and cost in New York Surrogate's Courts

A petition to compel an accounting is usually the least expensive step. Filing fees are set by SCPA 2402 and are modest. From filing to the first return date typically takes six to ten weeks depending on the county (New York, Kings, Queens, Nassau, Suffolk and Westchester each run on their own calendars). An uncontested order to account can issue on the return date. A contested accounting with document discovery, depositions and a hearing commonly takes one to three years and legal fees scale with the number of objections and the size of the fund. A beneficiary who succeeds on objections may ask the court to charge some fees against the trustee personally or against the trustee's commissions, but fee shifting is discretionary and should not be assumed. Fee arrangements vary by firm; ask for a written engagement letter that explains the billing method before you start.

Common New York fact patterns

The following are composite scenarios drawn from the types of matters that come to our office. They are illustrative, not reports of results.

• The sibling trustee of a Medicaid Asset Protection Trust. A parent in Queens transferred the family home into an irrevocable trust years ago, naming one child as trustee and all children as remainder beneficiaries. After the parent's death the trustee sibling continues to live in the house and will not say whether it will be sold. The other children are persons interested with present standing; the trust is a lifetime trust, so they may file in Queens Surrogate's Court under SCPA 207 to compel an accounting and, if the trustee is using the property for personal benefit, seek removal.
• The testamentary trust that never paid income. A will probated in Kings County created a trust paying income to a surviving spouse for life, remainder to children from a first marriage. The spouse has received irregular payments and no statements for several years. Because the trustee holds letters of trusteeship, the spouse petitions the same Surrogate's Court under SCPA 2205. The open repudiation rule means the delay does not bar the claim.
• The release signed at the kitchen table. A beneficiary in Manhattan signed a receipt and release presented by the trustee's lawyer with a one-page summary and no schedules. She later learns that a brokerage account was liquidated at a loss months before. Because a release obtained without full disclosure may be set aside, she can move to vacate it and compel a judicial accounting.
• Discretion used as a weapon. A trust gives the trustee discretion to distribute principal for a grandchild's "education and support." The trustee, who is also a remainder beneficiary, denies every request without explanation. The conflict of interest, combined with a pattern of blanket refusals, supports a petition for an accounting and for instructions on the meaning of the standard, and may support removal.

Frequently asked questions

Can a New York trust beneficiary see the trust document?

Yes, once your interest is enforceable (at the grantor's death for a revocable trust, immediately for most irrevocable trusts). If the trustee refuses, petition under SCPA 2102(1).

How long does a trustee have to account?

No fixed statutory interval applies to voluntary accountings. Once a court orders an account under SCPA 2206, the trustee must file within the time the order specifies, commonly 30 to 90 days. Failure to comply is grounds for removal under SCPA 711 and 719.

Can I sue the trustee personally?

Yes. The remedy for a sustained objection is a surcharge against the trustee personally. A trustee cannot pay a surcharge out of the trust. Where the trustee has dissipated assets, the court can also direct turnover of property and, in appropriate cases, impose a constructive trust on assets traceable to the trust.

What is a receipt and release?

A document in which a beneficiary acknowledges receiving a distribution and releases the trustee from further liability for the period covered. It is the end point of an informal accounting under SCPA 2202. Review the full schedules, not a summary, before signing.

I am a remainder beneficiary. Do I have standing now?

For an irrevocable trust, yes: remainder and contingent beneficiaries are "persons interested" under SCPA 103 and may petition to compel an accounting. For a revocable trust while the grantor is alive and competent, generally no.

Does the Surrogate's Court or the Supreme Court hear my case?

Testamentary trusts go to the Surrogate's Court that probated the will. Lifetime trusts can go to either; most beneficiaries choose the Surrogate's Court under SCPA 207.

Can the beneficiaries agree among themselves to dissolve the trust?

Not on their own. Revocation under EPTL 7-1.9 requires a living grantor to act with the consent of all beneficiaries, and minors and unborn beneficiaries cannot consent. Other routes are decanting by the trustee (EPTL 10-6.6) and court termination of an uneconomical trust (EPTL 7-1.19).

What if there are minor or unborn beneficiaries in the accounting proceeding?

The court appoints a guardian ad litem under SCPA 403 to review the account on their behalf, or permits virtual representation under SCPA 315 by an adult beneficiary with the same interest. The guardian ad litem's fee is usually paid from the trust.

Related pages

• Fiduciary accountings in New York Surrogate's Court
• Breach of fiduciary duty by trustees and executors
• Removing an administrator or executor
• Dealing with a bank or trust company as trustee
• Buying real property from a trust
• Are trusts public record in New York?

Talk to a New York trust litigation attorney

If a trustee is withholding information, delaying distributions or refusing to account, we can help you choose the right proceeding and the right court. The Law Offices of Albert Goodwin represents trust beneficiaries in the Surrogate's Courts of New York City, Long Island and Westchester, with offices in Manhattan, Brooklyn and Queens. Call 212-233-1233 or email [email protected].

This page provides general information about New York law and is not legal advice for any particular situation. Statutory references are to the EPTL, SCPA and CPLR as currently in effect; confirm the current text at the New York State Senate's legislation site before relying on it.