I recently spoke with a client whose father had passed away two years ago. The father named his oldest son—my client’s brother—as trustee for the family’s assets. Now, the brother refuses to provide any information about the trust’s finances. He is living well beyond his means, taking lavish trips, while my client’s calls go unanswered. The trust, intended as a source of generational security, has become a wall of silence and suspicion. The family relationship is in ruins.
In estate planning, “trust” is more than an emotional concept. It is a legal structure with profound responsibilities. When the person placed in that position of trust fails, the damage is twofold—it is financial, and it is deeply personal. Recovering from that breach isn’t about apologies. It’s about accountability.
The Foundation: A Trustee’s Fiduciary Duty
When you name a trustee, executor, or agent under a power of attorney, you appoint a fiduciary. This is one of the most significant roles in law. A fiduciary has a legal obligation—not just a moral one—to act solely in the best interests of the beneficiaries. This isn’t a suggestion; it is a mandate. It involves duties of loyalty, prudence, and impartiality.
The duty of loyalty means the trustee cannot engage in self-dealing. They cannot borrow from the trust, sell their own property to the trust, or otherwise use trust assets for personal benefit. The duty of prudence means they must manage assets as a reasonably prudent person would, which often involves seeking professional investment advice and avoiding risky ventures. The duty of impartiality requires them to treat all beneficiaries fairly, without favoring one over another—or themselves.
In New York, these duties are not abstract ideals. They are codified. Estates, Powers and Trusts Law (EPTL) § 11-1.7 expressly forbids a will or trust from exonerating an executor or trustee from liability for failing to exercise “reasonable care, diligence and prudence.” You cannot simply write a clause that says, “My trustee can do whatever they want without consequence.” New York law will not permit it.
Pathways to Accountability in Surrogate’s Court
When a fiduciary breaches their duty, the path to resolution in New York almost always leads to Surrogate’s Court. This is where disputes over wills, trusts, and estates are adjudicated. For a beneficiary who suspects wrongdoing, the first step is to demand a formal accounting.
An accounting is a legal proceeding where the trustee must produce a detailed report of every transaction—every dollar in, every dollar out, with supporting documentation. It is not a simple spreadsheet. It is a formal, sworn statement that must hold up to scrutiny. If the accounting reveals mismanagement or self-dealing, several legal remedies become available:
- Surcharge: The court can order the fiduciary to personally repay the trust for any losses caused by their breach of duty, plus any profits they made through improper actions.
- Removal: If the breach is severe, a beneficiary can petition the court to have the fiduciary removed and replaced. The court does not take this step lightly, but it will act to protect the assets and the integrity of the plan.
- Denial of Commissions: A fiduciary is typically entitled to a commission for their services. For a trustee who has violated their duties, the court can deny this compensation entirely.
These actions are not about punishing a family member, though it can feel that way. They are about restoring the trust to its intended purpose. The legal process provides a structured, dispassionate framework for resolving conflicts that are often emotionally charged.
Designing a Plan to Reinforce Trust
The best way to handle a breach of trust is to build a plan that makes it less likely to happen. When I work with families, much of our conversation centers on selecting the right people for these critical roles. The most responsible child may not be the one who lives closest. The sibling with financial acumen may have a strained relationship with their brothers and sisters.
We discuss contingencies. What if the chosen trustee becomes incapacitated or passes away? Who is the successor? Sometimes, the most prudent choice is not a family member. Naming a corporate trustee—a bank or trust company—or a private professional fiduciary can depersonalize the administration. Their decisions are guided by professional standards and regulatory oversight, not family history. This can be an effective way to preserve both a family’s assets and its relationships.
Stewardship. That is the goal. A well-designed plan is built on clear instructions, thoughtful selection of fiduciaries, and legal mechanisms for oversight. It anticipates friction and provides a roadmap for resolving it, ensuring your legacy strengthens family bonds rather than straining them.
If you are a beneficiary of a New York trust and have concerns about its management, the first step is to document those concerns with as much detail as possible. The next is to understand your rights. We can schedule a confidential review of the trust document and the situation to outline the legal options available to you.
