By Albert Goodwin, Esq. — New York estate and trust attorney, admitted to practice in the State of New York. Last updated: June 2024.

A trustee is the person or institution that holds legal title to property placed in a trust and manages that property for the benefit of the trust's beneficiaries. In New York, the trustee's role is governed primarily by the Estates, Powers and Trusts Law (EPTL) and, where a trust is administered or accounted for in court, by the Surrogate's Court Procedure Act (SCPA). This page is the definitive New-York-specific explanation of who a trustee is, how one is appointed, what powers and commissions a trustee has, and how a trustee resigns or accounts.

If you are researching what happens when a trustee misbehaves, see our dedicated pages on breach of trust, breach of fiduciary duty, and removing a fiduciary. This page focuses on the role itself.

How a Trustee Is Appointed in New York

The grantor (also called the settlor) names the initial trustee in the trust instrument. For a revocable living trust, the grantor is frequently the initial trustee, retaining control during their lifetime. For an irrevocable trust, the grantor typically names someone else, because retaining trustee control could undermine the creditor-protection and Medicaid-planning purposes of the trust.

Unlike an executor or administrator, a trustee of a living (inter vivos) trust generally does not need to be appointed by a court. The trustee derives authority directly from the trust document and assumes the role by accepting the trusteeship. By contrast, the trustee of a testamentary trust — a trust created within a will — is appointed by the Surrogate's Court, which issues letters of trusteeship after the will is admitted to probate. SCPA Article 14 governs the issuance of those letters and the qualification of testamentary trustees.

A trustee must be legally competent. Under EPTL § 11-1.6 and related provisions, the trustee must keep trust property separate from their own. An individual, multiple co-trustees, or a corporate fiduciary such as a bank or trust company may serve. For a discussion of when an institution is the right choice, see using a bank as a trustee.

Successor Trustees

A well-drafted New York trust names a successor trustee to take over if the original trustee dies, resigns, becomes incapacitated, or is removed. The successor named in the trust instrument typically assumes the role without court involvement for a living trust. If the trust fails to name a successor, or every named successor declines, EPTL § 7-2.3 and the court's equitable powers allow a beneficiary or interested party to petition the Surrogate's Court or Supreme Court to appoint a replacement so the trust does not fail for lack of a trustee.

Trustee vs. Executor vs. Administrator

These three fiduciary roles are often confused in New York estate matters:

• Trustee — manages a trust under the trust instrument and the EPTL. May serve for years or decades after the grantor's death.
• Executor — administers a probate estate under a will and receives letters testamentary from the Surrogate's Court.
• Administrator — administers an estate when there is no will, receiving letters of administration under SCPA Article 10.

The same person can wear more than one hat — for example, an executor who is also named as trustee of a testamentary trust funded after the estate is settled.

The Trustee's Powers Under New York Law

The trustee's powers come first from the trust instrument. Beyond that, EPTL § 11-1.1 grants New York trustees a broad set of statutory powers — including the power to invest, sell, lease, mortgage, and manage trust property — that apply unless the trust instrument restricts them. New York trustees investing trust assets are also subject to the Prudent Investor Act, EPTL § 11-2.3, which requires investment decisions to be evaluated in the context of the entire portfolio and the trust's purposes, risk tolerance, and beneficiaries.

Because these powers are broad, sophisticated New York estate plans sometimes name a trust protector with authority to monitor and even remove the trustee — particularly useful for irrevocable trusts, where the grantor cannot make changes after execution.

Trustee Discretion Over Distributions

A trust may give the trustee anywhere from no discretion to absolute discretion over distributions:

• Mandatory distributions — the instrument dictates exactly when and how much is paid (for example, fixed monthly income), and the trustee must follow it.
• Standard-based discretion — the most common is the HEMS standard (health, education, maintenance, and support). The trustee decides whether a request fits the standard, but that decision can be reviewed by a court if abused.
• Absolute discretion — even here, a New York trustee must act reasonably and in good faith and cannot withhold distributions arbitrarily or in bad faith.

Disputes over the interpretation of distribution language are common. For what beneficiaries are entitled to know, see a beneficiary's right to trust information.

How a Trustee Is Paid in New York: Commissions

New York sets trustee commissions by statute rather than leaving them entirely to negotiation. Under SCPA § 2309, a trustee is generally entitled to annual commissions calculated on both principal and income, on a graduated scale that includes:

• $10.50 per $1,000 (1.05%) on the first $400,000 of principal;
• $4.50 per $1,000 (0.45%) on the next $600,000; and
• $3.00 per $1,000 (0.30%) on principal over $1,000,000.

SCPA § 2309 also allows commissions on income collected. SCPA § 2312 governs commissions for corporate trustees and trustees whose fees are set by the trust instrument, generally allowing reasonable compensation. The trust instrument itself may set a different commission, in which case its terms typically control. Where multiple co-trustees serve, the statute addresses how commissions are apportioned among them.

The Trustee's Duty to Account

A New York trustee must keep accurate records and account to the beneficiaries for the management of the trust. Accountings can be informal (provided directly to beneficiaries, often with releases) or judicial — filed and settled in the Surrogate's Court under SCPA Article 22. A judicial accounting gives the trustee a binding court decree that, once settled, protects the trustee from later challenges to the periods covered. Beneficiaries who suspect mismanagement may petition to compel an accounting, and the court can require the trustee to disclose every receipt, disbursement, and investment decision. See our trust and estate accountings page for how this proceeding works.

Bonding

Many trusts waive the requirement that the trustee post a bond. Where the instrument is silent or where a court appoints a trustee, the Surrogate's Court may require a bond to protect the beneficiaries, particularly for testamentary trustees qualifying under SCPA Article 14. The amount is generally tied to the value of the trust property the fiduciary controls.

How a Trustee Resigns in New York

A trustee may resign as permitted by the trust instrument. If the instrument does not provide a clear procedure, a trustee of a court-supervised trust resigns by petitioning the Surrogate's Court, which will accept the resignation, settle the resigning trustee's account, and appoint or confirm a successor. A trustee generally cannot simply walk away mid-administration — the duty to account for the period of service continues even after resignation.

Frequently Asked Questions

How is a trustee paid in New York?

By statutory commission under SCPA § 2309 (and § 2312 for corporate trustees), calculated on principal and income, unless the trust instrument sets a different fee. The graduated principal rate starts at 1.05% on the first $400,000 and decreases for larger trusts.

Can a trustee also be a beneficiary?

Yes. New York allows a person to be both trustee and a beneficiary of the same trust. However, this creates a heightened risk of conflict of interest and self-dealing concerns, so the trust should be drafted carefully and the trustee must still act impartially toward the other beneficiaries.

How do I become a trustee in New York?

For a living trust, you accept the trusteeship named in the trust document — no court appointment is needed. For a testamentary trust, you petition the Surrogate's Court to receive letters of trusteeship under SCPA Article 14 after the will is admitted to probate.

Does a New York trustee need court approval to act?

Generally no. A trustee of a living trust acts under the authority of the trust instrument and EPTL § 11-1.1. Court involvement typically arises only when a trustee seeks to settle an accounting, resign, or when a beneficiary brings a proceeding.

Can a trustee be removed?

Yes. A court can remove a trustee for breach of fiduciary duty, mismanagement, conflict of interest, or other statutory grounds. Because removal is a distinct legal proceeding, we cover it on our fiduciary removal page.

Speak With a New York Trust Attorney

Trustee questions — whether you are serving as a trustee, considering accepting the role, or are a beneficiary trying to understand a trustee's obligations — can be complex and fact-specific. At the Law Offices of Albert Goodwin, we advise trustees and beneficiaries throughout New York. We have offices in New York City, Brooklyn, NY, and Queens, NY. You can call us at 212-233-1233 or email [email protected].