Wills & Trusts Litigation — New York
When a trustee betrays the confidence placed in them — through self-dealing, mismanagement, or failure to account — New York law provides powerful remedies. Russel Morgan, Esq. fights to recover losses and remove dishonest trustees on behalf of beneficiaries throughout all five boroughs.
Understanding the Law
A trustee in New York occupies a position of the highest legal trust and confidence. Under the New York Estates, Powers and Trusts Law (EPTL) and the Surrogate's Court Procedure Act (SCPA), every trustee — whether an individual family member, a professional fiduciary, or a corporate trust company — owes beneficiaries a comprehensive set of duties: the duty of loyalty, the duty of prudent investment, the duty of impartiality, the duty to account, the duty to inform, and the duty to keep trust assets separate from personal assets. These are not aspirational guidelines; they are enforceable legal obligations that, when violated, expose the trustee to personal financial liability and potential removal from their role.
New York Surrogate's Courts handle the overwhelming majority of trust fiduciary breach claims arising in Manhattan, Brooklyn, Queens, the Bronx, and Staten Island. The process typically begins with a petition demanding a judicial accounting — a formal court-supervised examination of everything the trustee has done with trust property. Once the accounting is filed and reviewed, beneficiaries can file objections identifying specific transactions that constitute breaches, and the court will hold a hearing to determine liability and surcharge the trustee for any proven losses.
At Morgan Legal Group, Russel Morgan, Esq. has represented beneficiaries in dozens of trust accounting and surcharge proceedings in New York Surrogate's Courts across all five boroughs. Our approach combines meticulous forensic review of trust records with aggressive courtroom advocacy to ensure that trustees who have betrayed their obligations are held fully accountable. Whether the breach involves outright theft, subtle self-dealing, or negligent investment decisions, we know how to build the evidence-based case necessary to obtain the surcharge, removal, or injunctive relief our clients need.
What You Need to Know
Trustees are held to the highest standard recognized in law — greater than ordinary negligence. Even honest mistakes made without adequate investigation can constitute a breach under the Prudent Investor Act.
A surcharged trustee pays damages from their personal assets, not just from their trustee commission. Courts can enter money judgments against a trustee's bank accounts, real property, and other holdings.
New York courts can order a trustee to disgorge profits they personally gained from self-dealing, even if the trust itself suffered no net financial loss. The law focuses on the trustee's disloyalty, not just documented harm.
A co-trustee who passively allows another trustee to breach their duty — by failing to object, investigate, or take corrective action — can be held jointly liable for resulting losses alongside the active wrongdoer.
Any beneficiary can petition New York Surrogate's Court to compel a trustee to file a judicial accounting. The trustee must then justify every transaction under oath, shifting the burden of proof to the fiduciary.
Under SCPA §711, New York courts may remove a trustee for waste, mismanagement, conflict of interest, or any conduct demonstrating unfitness to continue serving. Removal eliminates ongoing harm to the trust.
A trustee found to have committed serious breaches — particularly intentional misconduct or fraud — may be denied their statutory trustee commission entirely, effectively requiring them to serve without compensation.
The general statute of limitations for fiduciary breach claims in New York is six years. Tolling rules apply where misconduct was concealed, but early consultation with counsel is critical to preserve all available claims.
Frequently Asked Questions
Under New York law, a trustee is a fiduciary who owes the highest duty of loyalty and care to the trust beneficiaries. A breach of fiduciary duty occurs whenever a trustee violates these legal obligations. Common examples recognized under the New York Estates, Powers and Trusts Law (EPTL) and the Surrogate's Court Procedure Act (SCPA) include: self-dealing — entering into transactions in which the trustee has a personal financial interest contrary to the interests of the trust; failure to diversify trust investments in violation of the Prudent Investor Act (EPTL §11-2.3); co-mingling trust assets with personal assets; failure to account — refusing or neglecting to provide beneficiaries with periodic accountings of trust receipts and disbursements; making improper distributions that favor one beneficiary class over another; failing to pursue or defend claims on behalf of the trust; and misappropriation or embezzlement of trust funds.
Even negligent mismanagement — failing to act with the care a prudent investor would exercise — can constitute a breach in New York. Russel Morgan, Esq. evaluates potential fiduciary breach claims by reviewing trust accountings, investment records, and the trustee's transaction history to identify specific EPTL violations and calculate damages.
New York law provides trust beneficiaries with a robust set of remedies when a trustee breaches fiduciary obligations. The primary remedy is a surcharge — a money judgment against the trustee personally for any losses sustained by the trust as a result of the breach, including lost profits on investments that should have been made. New York courts can also order disgorgement of any profit the trustee personally gained from self-dealing transactions, even if the trust itself did not suffer a dollar loss.
Beneficiaries may petition Surrogate's Court to compel a judicial accounting of all trust transactions, which puts the burden on the trustee to justify every disbursement and investment decision. If the breach is serious or ongoing, the court may remove the trustee and appoint a successor under SCPA §711. In cases of fraud or intentional misconduct, the court may deny the trustee their statutory commission entirely. Where trust assets have been improperly transferred to third parties with knowledge of the breach, beneficiaries may be able to trace and recover those assets through an equitable lien or constructive trust theory.
New York's statute of limitations for breach of fiduciary duty claims is generally six years from the date of the breach under CPLR §213. However, the timeline can be more nuanced in the trust context. Where the breach involves fraud or self-dealing that was concealed from the beneficiaries, the limitations period may be tolled — paused — until the beneficiary discovered or reasonably should have discovered the misconduct.
In Surrogate's Court trust accounting proceedings, a judicial settlement of the accounting bars any further challenge to items included and disclosed in that accounting, so delay can effectively extinguish claims for older transactions once an accounting is settled. Conversely, if no accounting has ever been filed, the limitations period may not begin to run on many breaches until an accounting is demanded and a beneficiary is on notice of the specific transactions at issue. Given the complexity of these timing rules, beneficiaries who suspect trustee misconduct should consult Russel Morgan, Esq. as promptly as possible to preserve all available remedies.
Yes. One of the most significant consequences of being a trustee in New York is personal liability exposure. When a trustee breaches their fiduciary duties — whether through active self-dealing, negligent investment decisions, failure to account, improper distributions, or other misconduct — the trustee can be surcharged in the full amount of losses suffered by the trust. This means the court can enter a money judgment against the trustee's personal assets to make the trust whole.
Personal liability attaches even to co-trustees who passively allowed a breach to occur by failing to object or take corrective action. A trustee who relies on advice of counsel or follows a financial advisor's recommendations in good faith may have a partial defense, but good faith alone does not excuse a trustee from the duty to exercise reasonable oversight. Trust documents sometimes include exculpatory clauses that limit trustee liability, but New York courts construe these narrowly and will not enforce them to excuse intentional wrongdoing or bad faith. Morgan Legal Group has successfully obtained surcharge judgments against both individual and professional trustees on behalf of beneficiaries throughout New York City.
Take Action Now
Don't let a disloyal trustee continue to deplete the trust. Contact Morgan Legal Group today for a confidential consultation with Russel Morgan, Esq. — serving all five New York City boroughs from our Manhattan office at 15 Maiden Ln #905.