Suing a Trustee in New York: How a Beneficiary Brings a Surcharge and Removal Case in Surrogate's Court

Yes. A beneficiary of a New York trust can sue the trustee. In practice the case is almost never a conventional lawsuit with a summons and complaint. It is a proceeding in the Surrogate’s Court, usually built on top of an accounting, in which the beneficiary files objections and asks the Surrogate to surcharge the trustee, deny commissions, order property returned, or remove the trustee. This page is a working guide to that proceeding as it is conducted in the Surrogate’s Courts of New York City, Long Island and Westchester.

Two of our other pages cover ground this page deliberately leaves alone. For what counts as a breach and the duties a trustee owes, see breach of fiduciary duty in New York. For the mechanics of the accounting itself, the schedules and the forms, see estate and trust accountings. Here the subject is the fight: who can bring it, how it is started, what the papers look like, how damages are measured, and how long it tends to take.

Who Can Sue a New York Trustee

Standing is broader than many beneficiaries assume. Under SCPA 2205, a petition to compel a trustee to account may be filed by any person interested in the trust, and SCPA 103(39) defines a person interested to include anyone entitled, either absolutely or contingently, to share in the trust. That covers:

• Current income beneficiaries, who are entitled to distributions now.
• Remainder beneficiaries, who take what is left when the trust ends, even if the income beneficiary is still alive and even if the remainder interest is contingent on surviving someone.
• Co-trustees, who may petition against a fellow trustee and who face personal exposure if they stand by while another trustee commits a breach.
• Successor trustees, who can pursue claims against a predecessor.
• Guardians and attorneys-in-fact acting for a beneficiary who is a minor or lacks capacity.

A person with no present or future interest in the trust, such as a disinherited relative or a creditor of a beneficiary, generally cannot bring the proceeding.

Which Court, and in Which County

The Surrogate’s Court has jurisdiction over both testamentary trusts (created under a will) and lifetime trusts (SCPA 207, SCPA 1501 and following). A testamentary trust is supervised by the court that admitted the will to probate. For a lifetime trust, SCPA 207 places venue in the county where the trust assets are located, where the grantor lived when the trust was created, or where a trustee resides or does business. The Supreme Court has concurrent jurisdiction, but trust cases filed there are routinely transferred to the Surrogate, and Surrogates hear these disputes every week. The Surrogate’s Courts that handle most of our matters sit at:

• New York County: 31 Chambers Street, Manhattan.
• Kings County: 2 Johnson Street, Brooklyn.
• Queens County: 88-11 Sutphin Boulevard, Jamaica.
• Bronx County: 851 Grand Concourse.
• Richmond County: 18 Richmond Terrace, Staten Island.
• Nassau County: 262 Old Country Road, Mineola.
• Suffolk County: 320 Center Drive, Riverhead.
• Westchester County: 111 Dr. Martin Luther King Jr. Boulevard, White Plains.

The Four Procedural Routes Into Court

A beneficiary-versus-trustee case in New York starts in one of four ways. The choice depends on what the trustee has done and how urgent the situation is.

1. Petition to compel an accounting (SCPA 2205 and 2206)

This is the default route. The beneficiary petitions under SCPA 2205. Under SCPA 2206 the court issues an order directing the trustee to appear and either file a formal account or show cause why one should not be required. Trustees rarely have a good reason to refuse, and the court orders the account. Once the account is filed, the beneficiary files objections (described below) and the case becomes a contested accounting. Where the trustee will not even disclose what the trust holds, SCPA 2102(1) separately allows a petition to compel the trustee to supply information about the assets. See a beneficiary’s right to trust information.

2. Objections to the trustee’s own account (SCPA 2208)

Sometimes the trustee files first, under SCPA 2208, because the trust is ending or the trustee wants a decree discharging it. Every person interested must be cited under SCPA 2210. A beneficiary who receives a citation and does nothing by the return date risks a decree that settles the account and bars later claims on everything the account disclosed. Receiving a citation on a trustee’s accounting is the moment to act.

3. Petition to suspend or remove the trustee (SCPA 711 and 719)

Removal can be sought alone or combined with a petition to compel an account. SCPA 711 lists the grounds, including wasting or improperly applying trust assets, improvidence, dishonesty, refusing to obey a court order, and refusing to account. SCPA 719 lets the court suspend or remove a trustee without a formal citation in listed circumstances, such as disobeying a court order or admitting misconduct in the court’s presence. Where assets are at risk, the petition should ask for a temporary restraining order freezing accounts and real property pending the hearing. Our page on removing an estate administrator covers the parallel procedure for estates.

4. Discovery and turnover proceeding (SCPA 2103 and 2104)

Where specific property has left the trust, a discovery proceeding lets the court examine the person holding it and order it returned. It is often brought by a successor trustee against a removed trustee or the trustee’s relatives. See discovery and turnover proceedings in NYC.

What Objections to a Trustee’s Account Look Like

Objections are the pleading that frames the case. Each objection points to a schedule and entry in the account, states what is wrong with it, and states the relief demanded. A vague objection that the trustee “mismanaged the trust” will be struck or will invite a motion. A usable objection reads more like this:

Objection 3. Objectant objects to Schedule C, item 14, a disbursement of $48,000 on March 3, 2022, described as “property management.” The payee is a limited liability company owned by the trustee. The trust instrument does not authorize payments to entities in which the trustee has an interest, and no services of that value were rendered. Objectant demands that the trustee be surcharged $48,000 with interest at the statutory rate from March 3, 2022, and that the trustee’s commissions for the accounting period be denied.

Objections are typically filed in numbered sets covering: unexplained disbursements; payments to the trustee or the trustee’s relatives and businesses; sales of trust property below value or to insiders; investment losses from failure to diversify or from holding speculative assets; improper or unequal distributions; commissions taken in excess of SCPA 2309; and the failure to collect or report assets that should be in the trust. After objections are filed, the objectant may examine the trustee under oath under SCPA 2211 and obtain bank, brokerage and closing records through CPLR Article 31 disclosure.

Three New York Fact Patterns and How They Play Out

These are hypothetical fact patterns drawn from the kinds of disputes that come through the New York Surrogate’s Courts. They are not descriptions of specific clients or results. They are offered to show how the rules above operate.

Illustration 1: The trustee buys the Brooklyn brownstone from the trust

A testamentary trust holds a four-story brownstone in Bedford-Stuyvesant. The trustee, who is also one of three remainder beneficiaries, sells the building to an LLC he controls for $1.4 million without an appraisal. Two years later the LLC sells it for $2.3 million. The other two beneficiaries learn of the sale only when they request an accounting.

Analysis: this is self-dealing. New York applies a no-further-inquiry rule to a trustee who buys trust property. The beneficiaries do not have to prove the price was unfair; the transaction is voidable at their election unless the instrument or the court authorized it. The measure of damages follows Matter of Rothko, 43 N.Y.2d 305 (1977): where a fiduciary engages in self-dealing or acts in bad faith, the court may award appreciation damages, meaning the value the asset reached after the sale, not just the shortfall at the time of sale. The trustee also faces removal under SCPA 711 and denial of commissions. The beneficiaries’ objections would demand a surcharge of the difference between the sale price and the later value, with interest, and ask that the trustee be removed. See also beneficiary buying property from a trust.

Illustration 2: The Westchester trust that stayed in one stock

A lifetime trust funded in 2012 holds 90 percent of its value in a single publicly traded company that the grantor worked for. The trustee, a family friend, never sells. The stock falls by two thirds in 2022. The income beneficiary, the grantor’s widow, objects.

Analysis: EPTL 11-2.3(b)(3) requires a trustee to diversify unless the trustee reasonably determines that it is in the beneficiaries’ interests not to, and to decide within a reasonable time after taking office whether to retain or dispose of the initial assets. The leading case is Matter of Janes, 90 N.Y.2d 41 (1997), where the Court of Appeals upheld a surcharge against executors who held a concentrated Kodak position. Janes also sets the damages measure for imprudence: the capital lost, calculated as the value the stock would have brought had it been sold when a prudent fiduciary would have sold it, plus interest, not the gains a diversified portfolio might have earned. The trustee’s defense would be that the instrument directed retention or that a reasoned decision to hold was made and documented. A trustee with no file and no advice has a weak defense.

Illustration 3: The silent trustee and the “loans”

A trustee in Queens stops returning calls. Statements show $200,000 in transfers to the trustee’s personal account over three years, booked as loans. There are no notes, no interest payments and no security.

Analysis: the beneficiary files a combined petition under SCPA 2205 and 711 with a request for a temporary restraining order freezing the remaining accounts. Unsecured transfers to the trustee’s own account are self-dealing and, if not repaid, conversion. The court can suspend the trustee at the outset, order the account, surcharge the full amount with interest, deny commissions, and refer the matter if the conduct appears criminal. If the money has been moved to relatives, a discovery proceeding under SCPA 2103 reaches them.

Proving the Case: Burdens and Presumptions

Three features of New York law favor the objecting beneficiary.

• The trustee must justify the account. In a contested accounting, the trustee has the burden of proving that every receipt and disbursement is accurate and proper. The objectant must come forward with evidence that an entry is wrong, but once that is done the burden returns to the trustee. Missing receipts and unexplained withdrawals are resolved against the trustee.
• Self-dealing shifts the burden. Where the trustee stood on both sides of a transaction, the trustee must prove it was fair, fully disclosed and authorized. Bad faith is not an element.
• Imprudence is judged by conduct, not hindsight. Under EPTL 11-2.3(b)(1) the question is whether the trustee’s process was prudent at the time, judged for the whole portfolio. A documented, reasoned decision that turned out badly is defensible. An undocumented drift is not.

Most objections are decided by a preponderance of the evidence. Fraud must be proven by clear and convincing evidence. Impartiality between income and remainder beneficiaries is a common-law duty, reinforced by EPTL 11-2.3(b)(3), which directs the trustee to consider the beneficiaries’ needs for present and future distributions, and by EPTL 11-A-1.3(b), which requires discretionary principal-and-income allocations to be made impartially unless the instrument says otherwise.

Remedies and How Damages Are Measured

Exculpatory Clauses: Can the Trust Instrument Protect the Trustee?

Many trust instruments contain a clause stating the trustee is not liable except for willful misconduct. The effect depends on the kind of trust. EPTL 11-1.7 provides that a clause in a will exonerating an executor or testamentary trustee from liability for failing to exercise reasonable care, diligence and prudence is void as against public policy. A beneficiary of a testamentary trust can disregard such a clause. For lifetime trusts, EPTL 11-1.7 does not apply by its terms, and courts have given some effect to exculpatory language for ordinary negligence. No New York court will enforce an exculpatory clause to excuse self-dealing, bad faith, intentional misconduct or reckless indifference to the beneficiaries’ interests. A trustee who relies on the clause also bears the burden of showing the grantor understood and intended it.

Deadlines: Statute of Limitations for Claims Against a Trustee

New York does not have a single limitations period for breach of trust. The court looks at the substance of the remedy sought, following IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132 (2009):

• Money damages only: three years under CPLR 214(4).
• Equitable relief (rescission, reconveyance, disgorgement, an accounting, removal): six years under CPLR 213(1).
• Fraud as an essential element: six years from the fraud or two years from when it was or should have been discovered, whichever is later, under CPLR 213(8).

Those periods often do not start when the beneficiary expects. Under Matter of Barabash, 31 N.Y.2d 76 (1972), the statute does not begin to run against a trustee who is still serving until the trustee openly repudiates the trust or the fiduciary relationship otherwise ends, for example by a final accounting. A trustee who quietly takes money and keeps acting as trustee has not repudiated anything.

Example: a trustee sold a Nassau County rental property to his brother in 2016 for well under market value and has never accounted. In 2024 the beneficiary wants the property reconveyed or the profit disgorged. The remedy is equitable, so the six-year period under CPLR 213(1) applies rather than the three-year period, and under Barabash the period arguably has not started because the trustee never repudiated the trust. The claim should be reviewed, not abandoned.

Two further traps. A decree judicially settling an account is binding on everyone cited, as to every matter the account disclosed. A signed receipt and release on an informal accounting can also bar claims, though a release obtained without full disclosure of the facts can be set aside.

How Long the Case Takes in Each Court

Every Surrogate’s Court sets its own calendar, and the pace depends more on the parties than the county. In our experience the stages tend to run as follows.

• Petition to compel an account: a return date is set when the citation issues, usually several weeks out. If the trustee does not contest, an order directing an account within a fixed period often follows at or soon after the return date.
• Filing the account: courts commonly allow 60 to 90 days, extended if the records are voluminous. Trustees who miss the deadline can be held in contempt or removed under SCPA 711(3).
• Objections and discovery: objections are due on the return date of the accounting citation or by a date the court sets. SCPA 2211 examinations and document exchange follow, typically over several months.
• Trial or settlement: contested accountings that go to trial often take 18 months to three years from the first petition. Most settle after the trustee has been examined, because the examination fixes the facts.

The New York County and Kings County courts carry heavy calendars and often refer discovery disputes to a court attorney-referee. Nassau, Suffolk and Westchester tend to hold more frequent conferences with the parties. None of this changes the law, but it affects how quickly a case can be moved.

Costs, Filing Fees and Who Pays the Lawyers

Surrogate’s Court filing fees are set by SCPA 2402 and scale with the value of the trust, from under $100 for small trusts to $1,250 for trusts over $500,000 as of this writing. Legal fees are the larger expense. A trustee defending an account in good faith may generally pay reasonable legal fees from the trust, subject to review on the accounting. A trustee who loses on objections involving misconduct can be directed under SCPA 2110 to bear those fees personally and to repay fees already charged to the trust. An objectant whose work benefits the trust as a whole, for example by recovering money that all beneficiaries share, may ask the court to charge fees to the trust under Matter of Hyde. Fee arrangements with counsel vary by matter.

Frequently Asked Questions

Can a beneficiary sue a trustee without first getting an accounting?

Yes, in two situations. A petition to remove or suspend the trustee under SCPA 711 or 719 can be filed on its own where assets are at risk, and a discovery proceeding under SCPA 2103 can be brought to recover specific property. For a surcharge, however, the court almost always wants the account first, because the account is the document against which objections are measured. The usual practice is to combine the removal petition with a petition to compel the account.

Can a remainder beneficiary sue while the income beneficiary is still alive?

Yes. A remainder beneficiary, including one whose interest is contingent, is a person interested under SCPA 103(39) and may petition to compel an account and object to it. Remainder beneficiaries are the usual objectants when a trustee favors the income beneficiary, for example by allocating receipts to income that should have gone to principal or by failing to invest for growth.

Can you sue a bank or trust company serving as trustee?

Yes. Corporate trustees owe the same duties and are held to the higher standard of a professional fiduciary. The common claims are failure to diversify, excessive or layered fees, and failure to communicate. Corporate trustees often rely on exculpatory language and on directed-trust provisions that shift investment responsibility to a committee or advisor; those provisions must be read closely. Removal of a bank is less common than a surcharge or a negotiated resignation. See a bank as trustee.

Does an exculpatory clause in the trust bar my claim?

Not for a testamentary trust, where EPTL 11-1.7 voids any clause excusing the trustee from reasonable care. For a lifetime trust the clause may limit liability for ordinary negligence but never for self-dealing, bad faith or reckless indifference.

Can the trustee use trust money to defend against my objections?

Generally yes while the case is pending, subject to the court’s review when the account is settled. If the trustee is surcharged for misconduct, the court can order the trustee to bear those fees personally and to restore to the trust the fees already paid. A beneficiary who believes the trustee is spending trust money on an indefensible position can ask the court to restrain further payments pending the decision.

What happens to the trustee’s commissions during the litigation?

A trustee of a lifetime trust may ordinarily take annual commissions under SCPA 2309 without court approval, and a testamentary trustee may do so if the beneficiaries have been given the required annual statements. Commissions taken during the accounting period are listed in the account and are subject to objection. The court can deny commissions for any period in which the trustee breached its duties and can order repayment of commissions already taken.

What if I signed a release when I received a distribution?

A receipt and release is a defense the trustee will raise. It can be set aside if the trustee did not disclose the facts you needed to evaluate the account, or if it was obtained by pressure or misrepresentation. Bring the release to the first consultation.

Sources and Further Reading

• Estates, Powers and Trusts Law, official text: nysenate.gov/legislation/laws/EPT.
• Surrogate’s Court Procedure Act, official text: nysenate.gov/legislation/laws/SCP.
• Surrogate’s Court official forms, including accounting schedules and petitions: nycourts.gov Surrogate’s Court forms.
• Related pages on this site: breach of fiduciary duty, estate and trust accountings, a beneficiary’s rights to trust information, a beneficiary buying property from a trust, a bank as trustee, and trust attorney in NYC.

This page was written by Albert Goodwin, Esq., a trusts and estates attorney who practices in the Surrogate’s Courts of New York City, Long Island and Westchester. It is reviewed for changes in the EPTL, SCPA and CPLR. It is general information, not legal advice about your trust.

Speak With a New York Trust Litigation Lawyer

We represent beneficiaries who need a trustee to account, to repay what was lost, or to step down, and we represent trustees responding to objections. The first useful step is a review of the trust instrument, the statements you have, and the dates on which you learned what the trustee did. We can help you decide which of the four routes above fits your situation and in which county to file. Call 212-233-1233 or email email@nyestateslawyer.com.