30 YEARS EXPERIENCE REPRESENTING CLIENTS LIKE YOU
Trusts in New York FAQ
It is important to seek knowledgeable legal counsel when making a trust. Additionally, it is crucial to retain a lawyer if you believe a trust is being mishandled by a trustee or if you are a trustee who has been accused of mishandling a trust. Here are some of the most frequently asked questions that attorneys are asked about trusts in New York City.
- What Is Trust?
- What Are the Responsibilities of a New York Trustee?
- What Is a Trust Contest?
- What Are Grounds to Contest a Trust in New York?
- What Is a Trust Accounting?
- When Does a Trustee Need to Provide an Accounting to Beneficiaries in New York?
- Consult a Seasoned New York Trusts Lawyer
1. What Is Trust?
A trust is a legal arrangement in which a grantor transfers assets to a trust that is managed by a trustee for the benefit of designated beneficiaries. They can be helpful in estate planning to avoid probate, protect assets from creditors, or provide for disabled loved ones. Trusts can be revocable, meaning that they can be changed, or irrevocable, meaning that they are permanent once created.
2. What Are the Responsibilities of a New York Trustee?
A New York trustee is responsible for managing and administering trust assets for the benefit of beneficiaries according to the terms of the trust instrument, state law, and their fiduciary duties. Management and administration of trust assets can include protecting assets, distributing funds under the terms of the trust, investing assets prudently, providing beneficiaries with accountings, and paying taxes for the trust. Investing assets prudently can include diversifying investments and using professional skills the trustee has, such as skills in appraisal or investment, even when those professional skills were acquired independently. They are also required to let beneficiaries know about their actions in connection with the trust and any consequences of those actions, and this can include the requirement that they provide trust accountings under certain circumstances.
Importantly, trustees owe beneficiaries a fiduciary duty of utmost loyalty, care, and good faith. They must avoid conflicts of interest, and they are also required to communicate with beneficiaries about the trust. It can be very important for a trustee to seek an attorney’s representation to ensure that they are meeting their obligations to beneficiaries.
3. What Is a Trust Contest?
A trust contest is a legal challenge to the validity of a trust instrument that is filed in Surrogate’s Court or sometimes the state Supreme Court by someone who has a financial interest in the trust. That person is often a beneficiary or heir of the person who created the trust.
4. What Are Grounds to Contest a Trust in New York?
Grounds to contest a trust include lack of capacity, undue influence, fraud, ambiguities or disagreements about what trust provisions mean, and disputes over a trustee’s actions. In order to bring a trust contest, a person must have standing to do so and also provide evidence to support the grounds on which the trust is being contested. For example, if you are contesting a trust because you believe that the settlor, or person who made the trust, was subject to undue influence, you would need to provide evidence to show that the settlor had a vulnerable state of mind, the beneficiary had the opportunity to influence the testator and did influence the testator, resulting in a trust that doesn’t reflect the creator’s wishes.
5. What Is a Trust Accounting?
A trust accounting provides details about a trustee’s actions taken over the life of a trust including current principal and income balance, any principal received, income collected, investments made, capital gains and losses, trustee commissions, purchases, and sales.
6. When Does a Trustee Need to Provide an Accounting to Beneficiaries in New York?
A trustee needs to provide an accounting to beneficiaries under certain circumstances such as when the trust instrument’s language requires it, when a beneficiary requests an accounting, when the trust relationship ends, and when an interested party petitions for a compulsory accounting. The trustee should be able to support the account with records, including bank account information, investment account information, purchase and sales documentation, and canceled checks.
7. Consult a Seasoned New York Trusts Lawyer
Whether you are setting up a trust or you are an interested party interested in a trust, it can be critical to discuss your case with an experienced New York trusts lawyer. Call Jules M. Haas now for a free confidential review of your case at (212) 355-2575 or contact him through his online form. He offers reasonable and flexible fee arrangements.