The Role of a Trustee in New York: Duties, Responsibilities, and Risks - Davies Law Firm

From Davies Law Firm – The Role of a Trustee in New York: Duties, Responsibilities, and Risks explores what it means to serve as a trustee under New York trust law and outlines the duties, powers, and risks tied to that role.

This podcast will begin by breaking down the core fiduciary duties a trustee must uphold under New York law: the duty of loyalty, the duty of prudence under the prudent investor standard, and the duty of impartiality. Each of these duties plays a vital role in ensuring that the trustee manages the trust in the best interests of all beneficiaries.

Next, we examine the trustee’s powers, including their authority to invest or reinvest assets, manage real estate, collect income, pay expenses, maintain insurance, and accept new assets when the trust document does not specifically provide guidance. The episode also outlines the day-to-day responsibilities of a trustee, such as taking control of and safeguarding trust assets, managing investments, administering distributions, keeping accurate records, maintaining communication with beneficiaries, and handling tax filings including IRS Form 1041 and New York’s IT-205.

Finally, the podcast highlights the risks and liabilities trustees face. Mistakes like self-dealing, commingling funds, poor management, or failing to provide an accounting can result in personal liability. Beneficiaries may take legal action or petition for the trustee’s removal under the Surrogate’s Court Procedure Act. Listeners will also learn why clear documentation, honest communication, and legal guidance are critical to protect both the trustee and the integrity of the trust.

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