Wills, Estates and Surrogate's Practice

It is not uncommon for an attorney, or an attorney’s client, to be named successor trustee in a trust agreement or appointed successor by a resigning trustee. Rather than agreeing to such an appointment as a casual favor for a close friend or family member, the successor trustee must recognize the situation for what it is: a potential minefield of liability. The solution is not necessarily to refuse the request, but instead to recognize that service may carry a risk of liability, and should only be undertaken after a thorough investigation of the facts and circumstances.

Successor Trustee Liability

New York courts and commentaries often state that a successor trustee is not liable for a predecessor’s misfeasance. Although technically correct, this statement is misleading, and should provide little comfort to successor trustees. A successor trustee cannot accept at face value information provided to him. Instead, he has an affirmative duty to actively investigate his predecessor’s actions and must take reasonable steps to remedy any improprieties uncovered. What is reasonable depends on the facts of each situation, and may even require the successor trustee to initiate litigation.