Fiduciaries in New York are appointed to administer estates and trusts. With regard to an estate, the Surrogate’s Court appoints either an Executor or Administrator depending upon whether the decedent had a Last Will. When a Last Will exists, the document is offered for probate and the Court appoints an Executor. In situations where a decedent dies intestate (without a Will) the Court appoints an estate Administrator.
With regard to Trusts, there are many different types of trusts. There can be inter vivos trusts that are generally created during a person’s lifetime. There are also testamentary trusts that are created pursuant to the terms or provisions in a Last Will. The Trustee supervises the administration of the trust according to the trust terms. All of the above appointees must act properly in performing their duties. Such duties include the collection and protection of assets and the fair and proper treatment of estate and trust beneficiaries. When a fiduciary acts negligently or improperly a beneficiary may allege that the appointee breached a fiduciary duty. In the event there has been a breach of a fiduciary duty, the complaining beneficiary may try to have the fiduciary removed from his position. There are a number of statutes in the New York Surrogate’s Court Procedure Act (SCPA) that provide the grounds and procedure for such removal.
SCPA Section 711 is entitled “Suspension, modification or revocation of letters or removal for disqualification or misconduct.” This section provides various grounds for the removal of a fiduciary including the wasting of assets, dishonesty or disobeying a court directive. Another statute that concerns fiduciary removal is SCPA Section 719 which is entitled “In what cases letters may be suspended, modified or revoked, or a lifetime trustee removed or his powers suspended or modified, without process.” This section sets forth a number of instances in which the Court may immediately suspend or remove a fiduciary. Such instances include situations where a fiduciary fails to appear in Court without a proper excuse or conceals his whereabouts or defaults in providing Court Ordered information.
I have represented many fiduciaries and beneficiaries in cases involving the removal of a fiduciary or the breach of fiduciary duties. Generally, Courts are reluctant to remove or suspend a fiduciary without a clear demonstration of improper conduct. The rationale behind such hesitancy is due to the Court’s view that the person appointing a fiduciary is entitled to have his choice of fiduciary respected. Thus, general disagreements between a fiduciary and a beneficiary that do not constitute improper conduct most times will not result in the removal of a fiduciary. However, I have represented beneficiaries in a number of cases where a fiduciary has been removed for misconduct.
A recent case decided by Manhattan Surrogate Nora Anderson involved a petition to remove and suspend the powers of a trustee. In Matter of Modell decided on March 8, 2016, a co-trustee sought the above relief. The Court refused to immediately suspend the Trustee’s powers. The Surrogate found that an immediate suspension was not appropriate since the allegations regarding the breaches of fiduciary were contested and disputed. The Court also noted that it appeared that the trustee was properly performing his duties since the value of the trust property had increased in value. The Court reserved the determination of removal to be decided at a later hearing.
If you have any questions or concerns regarding a breach of fiduciary duty or the removal of a fiduciary please call me now for a free discussion. New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate and estate settlement throughout New York City including Manhattan and Brooklyn. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.
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