New York Trust Law: What Every Trust Holder Needs to Know

New York does trust law differently than almost every other state. Instead of a single unified trust code, the rules are spread across multiple statutes. Trustee compensation follows a statutory fee schedule with specific dollar amounts per thousand rather than a "reasonable compensation" standard. Accountings go through Surrogate's Court in a judicial process rather than simple reports mailed to beneficiaries. And the state has not adopted the Uniform Trust Code, despite years of proposals to do so.

If you have a trust governed by New York law, or you're serving as trustee of a New York trust, this guide explains the rules that actually apply to you.

This guide applies to both revocable and irrevocable trusts in New York, though many reporting and compensation rules are most relevant to irrevocable trusts being actively administered.

Where New York trust law lives

This is where it gets complicated. New York trust law is not in a single unified code. It spans three major statutes:

The Estates, Powers and Trusts Law (EPTL) covers substantive trust law. Article 7 (sections 7-1.1 through 7-8.1) handles trust creation, validity, and administration. Article 11 (sections 11-1.1 through 11-2.4) covers fiduciary powers and the prudent investor standard. Article 10 (section 10-6.6) covers decanting.

The Surrogate's Court Procedure Act (SCPA) handles the procedural side. Articles 22 (sections 2201 through 2213) covers accounting, and Article 23 (sections 2307 through 2313) covers compensation.

The Civil Practice Law and Rules (CPLR) provides the statutes of limitation.

A proposed New York Trust Code (EPTL Article 7-A) has been introduced in the legislature but has not been enacted as of March 2026. If it eventually passes, it would modernize and consolidate these scattered provisions. Until then, you're working with the current fragmented system.

What New York trustees are required to do

Because the duties are spread across multiple statutes and significant case law, New York doesn't have the neat, numbered duty list you find in UTC states. But the core obligations are clear.

Invest prudently. New York adopted its version of the Prudent Investor Act as EPTL section 11-2.3, effective January 1995. You must exercise "reasonable care, skill and caution," pursue an overall investment strategy that considers eight specific factors, and you can delegate investment decisions to qualified professionals. If you're a professional trustee (a bank, trust company, or paid investment advisor), you're held to a higher standard: the diligence of "prudent investors of discretion and intelligence having special investment skills."

Act with loyalty and impartiality. These duties come primarily from EPTL section 11-2.3 and extensive common law rather than standalone statutes. You must manage the trust in the beneficiaries' interest, treat all beneficiaries fairly, and avoid self-dealing.

Keep records and segregate property. EPTL section 11-1.6 and common law require proper record-keeping and keeping trust property separate from your own.

TrustHelm tip: TrustHelm tracks your trustee duties based on New York's specific requirements, including the annual statement obligation tied to your commission entitlement. The platform calculates your statutory commission automatically based on trust size.

The judicial accounting system

This is one of New York's most distinctive features. Most states use an "informational" accounting system where the trustee simply provides a report to beneficiaries. New York uses a judicial accounting system through Surrogate's Court.

There are two types:

Compulsory accounting (SCPA section 2205). The court can order a trustee to file a formal account, either on its own initiative or when a beneficiary or other interested person petitions for it. If a beneficiary thinks the trustee isn't managing things properly, they can ask the court to force a formal accounting.

Voluntary accounting (SCPA section 2208). The trustee proactively petitions the court for a "judicial settlement" of their account. This is actually a smart protective move. When the court approves a judicial settlement, the trustee gets a court decree that protects them from future claims for the period covered by the accounting. It's essentially a court-approved clean bill of health.

There is no mandatory periodic accounting requirement. Unlike California or Florida, New York does not require the trustee to automatically provide an annual accounting. Trustees ordinarily account at trust termination or when they stop serving. However, there's an important exception tied to compensation (covered below).

The annual statement requirement (tied to commissions)

Here's where it gets practical. Under SCPA section 2309(4), a trustee who wants to retain their commissions must furnish annually to each income beneficiary a statement showing the trust's principal assets and all receipts of income and principal, including any commissions the trustee has taken.

This is not technically a freestanding duty to account. It's a condition of keeping your pay. But in practice, it means most trustees who are taking commissions need to provide annual statements to income beneficiaries. If you skip the statements, you risk having your commissions challenged or denied.

Principal beneficiaries (people who will eventually receive trust assets but aren't currently getting income) only receive statements on demand, not automatically.

The statutory commission schedule

New York is one of very few states with a statutory fee schedule for trustee compensation. Instead of the "reasonable compensation" standard used almost everywhere else, SCPA section 2309 sets specific rates.

Annual commissions (section 2309(2)):

• $10.50 per $1,000 on the first $400,000 of trust assets (that's 1.05%)
• $4.50 per $1,000 on the next $600,000 (0.45%)
• $3.00 per $1,000 on anything above $1,000,000 (0.30%)

Paying-out commission (section 2309(1)): When the trust distributes principal, the trustee gets 1% of the amount paid out.

How commissions are split: One-third comes from income, two-thirds from principal (section 2309(3)).

Multiple trustees: Full commissions can be paid to up to 2 trustees for trusts between $100,000 and $400,000, or up to 3 trustees for trusts over $400,000 (section 2309(6)).

Charitable trusts: 6% of annual income collected (section 2309(5)).

Corporate trustees (banks and trust companies) can charge according to their published fee schedules, subject to court review (section 2312). Their fees often exceed the statutory schedule.

To put this in real numbers: a trustee managing a $500,000 trust would earn annual commissions of roughly $4,200 for the first $400,000 plus $450 for the remaining $100,000, totaling about $4,650 per year.

Notice requirements

New York currently has no comprehensive statutory notice requirement for irrevocable trusts. There's nothing like California's 60-day notice or the UTC's standard beneficiary notification rules. The SCPA section 2309(4) annual statement is tied to commission entitlement, not a freestanding information duty.

The one area where notice is specifically required is decanting. EPTL section 10-6.6(j) requires 30-day notice to all interested persons before a decanting takes effect. Decanting is when a trustee distributes trust assets into a new trust with different terms, and New York was actually the first state in the nation to authorize this (back in 1992).

Statute of limitations for trust claims

There's no single trust-specific limitations period in New York. It depends on what type of claim is being brought:

6 years under CPLR section 213(1) for most equitable claims (like asking the court to undo a bad transaction or impose a constructive trust).

3 years under CPLR section 214(4) when the remedy is purely monetary (like suing for damages caused by a bad investment).

6 years from accrual or 2 years from discovery under CPLR section 213(8) for fraud-based claims.

An important nuance: the clock generally does not run during the trust relationship. It starts when the trustee repudiates the trust (openly acts against the beneficiaries' interests) or when the trust terminates. This means beneficiaries can sometimes bring claims about events that happened many years ago if the trustee never provided a judicial accounting to cut off liability.

This is another reason the voluntary judicial accounting is such a powerful tool for trustees. Getting a court decree settles claims for that period definitively.

New York-specific rules that catch people off guard

The Rule Against Perpetuities still applies. New York limits trust duration to "lives in being plus 21 years" under EPTL section 9-1.1. Many other states have abolished this rule or extended it to 360, 1,000, or even unlimited years. If long-term dynasty trust planning is important to you, New York is not the ideal jurisdiction. This is one reason some families move trust situs to states like Nevada, South Dakota, or New Hampshire.

Trusts default to irrevocable. Under EPTL section 7-1.16 and New York common law, a trust is presumed irrevocable unless the document explicitly reserves the power to revoke. This is the opposite of the UTC and California, which both default to revocable. If your trust document is ambiguous on this point, New York assumes it's irrevocable.

New York was the first state with a decanting statute. EPTL section 10-6.6 has been in place since 1992, giving trustees the power to "pour" trust assets into a new trust with modified terms. This can be used to fix administrative problems, update outdated provisions, or restructure the trust for tax efficiency. The 30-day notice requirement to all interested persons is an important safeguard.

The unitrust election provides flexibility. EPTL section 11-2.4 allows a trustee to elect to convert an income-only trust to a 4% unitrust. Instead of distributing only actual income (dividends, interest), the trustee distributes 4% of the trust's total value annually. This can be helpful when interest rates are low and the trust is invested heavily in growth stocks that produce little current income.

TrustHelm tip: TrustHelm automatically calculates your statutory commissions under SCPA section 2309 based on your trust's current asset values. The platform tracks the one-third/two-thirds income-principal split and flags when your annual statement to income beneficiaries is due.

The most common New York trust mistakes

Not providing annual statements and losing commissions. If you're taking commissions as trustee, you must provide annual statements to income beneficiaries. Skip this, and your commissions can be challenged and clawed back.

Assuming the trust is revocable. New York defaults to irrevocable. If the trust document doesn't explicitly say "this trust is revocable" or "the grantor reserves the right to revoke," the trust may be permanently locked in.

Using dynasty trust strategies without considering the Rule Against Perpetuities. A trust drafted for multi-generational wealth transfer may hit the lives-in-being-plus-21-years limit in New York. If perpetual trusts are important to your plan, your attorney may recommend establishing the trust in a state that has abolished this rule.

Not seeking a voluntary judicial settlement. Many trustees manage trusts for years without ever getting a judicial settlement from Surrogate's Court. Every year without one is a year where your liability window stays open. Periodic voluntary accountings provide court-approved protection.

Ignoring the paying-out commission. When distributing principal, the trustee is entitled to a 1% paying-out commission. Many family member trustees either don't know about this entitlement or fail to properly account for it.

Confusing New York rules with UTC rules. Because so much online trust advice is based on the Uniform Trust Code, New York trustees frequently assume rules that don't apply to them (like mandatory 60-day notice to beneficiaries) while missing rules that do (like the statutory commission schedule).

How New York compares to other states

New York is one of about 14 states that have not adopted the Uniform Trust Code. Its system is distinctive in several ways:

Statutory commissions vs. reasonable compensation. Almost every other state uses a "reasonable under the circumstances" standard for trustee pay. New York gives you a specific formula with dollar amounts per thousand. This provides certainty but can result in compensation that's higher or lower than what a court in another state might consider "reasonable."

Judicial accounting vs. informational reporting. Most states have the trustee send a report to beneficiaries. New York routes accountings through Surrogate's Court, which adds formality and cost but also gives the trustee court-approved protection.

No mandatory beneficiary notice. Unlike California (60-day notice with contest deadline), Florida (60-day notice on acceptance and irrevocability), and most UTC states, New York has no comprehensive duty to notify beneficiaries about the trust's existence or changes.

Trusts have a limited lifespan. New York's lives-in-being-plus-21-years rule is much shorter than the 360-year, 1,000-year, or unlimited terms allowed in competing jurisdictions. For families planning multi-generational trusts, this is a meaningful constraint.

When to talk to an attorney

New York's fragmented trust law makes professional guidance especially important. You should consult a New York trust attorney if: you're not sure whether your trust is revocable or irrevocable, you want to petition Surrogate's Court for a voluntary judicial settlement, you need to calculate commissions correctly under the statutory schedule, you're considering decanting into a new trust structure, you want to evaluate whether New York is the best jurisdiction for your trust, or you're a successor trustee taking over after a death and need to understand your obligations.

For finding a qualified estate planning attorney in your area, visit TrustHelm's Find an Attorney directory.

This guide is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for decisions about your trust.