What Does a Trustee Do? Fiduciary Duties Under New York Law

A trustee is the person or institution legally responsible for managing the assets held in a trust and distributing them according to the trust’s terms, all for the benefit of the trust’s beneficiaries. In New York, a trustee is a fiduciary — meaning the law holds them to the highest standard of honesty and care. Under the New York Estates, Powers and Trusts Law (EPTL), a trustee must follow three core duties: the duty of loyalty, the duty to invest prudently (the prudent-investor standard under EPTL Article 11-A), and the duty to account to beneficiaries. Put simply, a trustee safeguards the property, manages it wisely, and answers to the people who are supposed to benefit from it.

Below, we answer the questions New Yorkers most often ask the trusts and estates team at Morgan Legal Group.

Q: What exactly is a trustee responsible for?

A trustee wears several hats at once. The role is part manager, part recordkeeper, and part referee. In broad strokes, a New York trustee must:

• Take control of and protect trust assets — retitle property into the name of the trust, secure accounts, and insure real estate.
• Manage and invest the assets prudently under the standards of EPTL Article 11-A.
• Distribute income and principal to beneficiaries exactly as the trust document directs.
• Keep accurate records and provide an accounting to beneficiaries.
• File tax returns for the trust and pay any taxes due.
• Stay strictly loyal to the beneficiaries — never using trust property for personal gain.

These responsibilities are collectively known as trust administration, and they continue for as long as the trust exists. You can learn more about the full lifecycle of these duties on our trust administration page.

Q: What does “fiduciary duty” actually mean in New York?

“Fiduciary” is a legal word for a relationship built on trust and confidence. When you serve as a trustee, the law assumes you will put the beneficiaries’ interests ahead of your own — every time, without exception. New York courts treat a trustee’s obligations seriously, and a trustee who violates them can be held personally liable for losses.

There are three pillars to a trustee’s fiduciary duty under New York law:

Duty	What it requires	NY authority
Duty of loyalty	Act solely in the interest of beneficiaries; avoid self-dealing and conflicts of interest	EPTL Article 7 (trust governance)
Prudent-investor standard	Invest and manage assets with the care, skill, and caution a prudent investor would use	EPTL Article 11-A
Duty to account	Keep accurate records and report to beneficiaries on how the trust is managed	EPTL Article 7

The duty of loyalty

A trustee may not buy trust assets for themselves, lend trust money to themselves, or favor one beneficiary over another for personal reasons. This is the “no self-dealing” rule, and it is the heart of being a fiduciary.

The prudent-investor standard

New York follows the prudent-investor rule under EPTL Article 11-A. Instead of judging each investment in isolation, the law looks at the trust’s portfolio as a whole. A trustee must consider factors like the purpose of the trust, the needs of the beneficiaries, inflation, expected return, and the need to diversify. A trustee who simply lets money sit idle — or who gambles it on speculative bets — can breach this standard.

The duty to account

Beneficiaries have a right to know what is happening with the trust. A trustee must keep clear records and provide a periodic accounting showing all receipts, disbursements, and the current value of the assets. If beneficiaries object, the matter can be brought before the Surrogate’s Court for a judicial accounting.

Q: Does the trustee’s job change depending on the type of trust?

Yes. While the core fiduciary duties stay the same, the trustee’s day-to-day responsibilities shift with the kind of trust involved:

• Revocable living trust. While the grantor is alive and competent, they usually serve as their own trustee and keep full control — they can amend or revoke the trust at any time. The successor trustee steps in at incapacity or death. A revocable trust’s main benefits are avoiding probate, privacy, and incapacity management — but note it does not save estate tax, because the assets remain in the taxable estate. See our revocable living trust overview for details.
• Irrevocable trust. This trust generally cannot be amended once created. Trustees of irrevocable trusts handle assets used for estate-tax reduction, asset protection, and Medicaid planning (subject to the five-year look-back). The trustee’s loyalty here is especially important because the grantor has given up control. Learn more on our irrevocable trust page.
• Supplemental (Special) Needs Trust. Under EPTL 7-1.12, an SNT holds assets for a disabled beneficiary without disqualifying them from means-tested benefits like Medicaid or SSI. The trustee must be extremely careful about how distributions are made, since a single improper payment can jeopardize benefits.

Q: Who can serve as a trustee in New York?

Almost any competent adult can serve, and many families name a spouse, adult child, or trusted friend. You can also appoint a professional or corporate trustee — such as a bank or trust company — particularly for complex or long-running trusts. Many people name co-trustees to share the workload and provide checks and balances. Choosing the right trustee is one of the most important decisions in your estate plan; the wrong choice can lead to family conflict or even litigation.

Q: Does a trustee get paid?

Yes. New York law allows trustees to receive commissions for their work. The specific commission schedules are set out in New York’s statutes — primarily the Surrogate’s Court Procedure Act (SCPA) and the EPTL. We do not quote a flat figure here because the amount depends on the size of the trust, the type of assets, and the work performed. A trustee is also entitled to reimbursement for reasonable, properly documented expenses paid on behalf of the trust.

Q: How is a trust different from a will?

This is one of the most common questions we hear, so here is a quick comparison:

Feature	Trust	Will
Probate	Avoids probate	Must be probated
Privacy	Private	Becomes a public record
Court	No court supervision needed to fund	Filed in Surrogate’s Court
Takes effect	Often during your lifetime	Only at death

A trust avoids probate and keeps your affairs private, while a will is a public document that must be probated in the Surrogate’s Court. Many New Yorkers use both together — a trust as the centerpiece and a “pour-over” will as a backstop. Our trust vs. will page explains how the two work side by side, and our trusts overview covers the full menu of options.

Q: What about New York estate tax — does the trustee handle that?

The trustee may be responsible for ensuring estate-tax obligations are met. New York has its own estate tax with a notorious “cliff.” For 2026, the basic exclusion amount is $7,350,000. But New York phases out the exemption entirely for estates that exceed 105% of the exclusion — $7,717,500. An estate valued over that cliff loses the entire exemption and is taxed on the full amount, not just the excess. This is exactly why careful trust planning — sometimes using an irrevocable trust — matters so much for larger New York estates.

Frequently Asked Questions

Can a trustee also be a beneficiary of the same trust?
Yes, this is common in family trusts. However, the trustee must be careful not to favor themselves over other beneficiaries, because the duty of loyalty still applies in full.

What happens if a trustee breaches their fiduciary duty?
A beneficiary can petition the Surrogate’s Court. A trustee found to have breached their duty can be ordered to repay losses, return improper commissions, or be removed and replaced.

Can I be my own trustee in New York?
Yes — with a revocable living trust, you typically serve as your own trustee while you are alive and competent, naming a successor trustee to take over at incapacity or death.

Does naming a trustee avoid probate automatically?
Only if the trust is actually funded — meaning assets are retitled into the trust’s name during your lifetime. An unfunded trust does not avoid probate, which is why proper trust administration matters.

Talk to a New York Trusts Attorney

Serving as a trustee — or choosing the right one — is a serious responsibility under New York law. Whether you are setting up a trust, stepping into the role of successor trustee, or need help with a judicial accounting, the team at Morgan Legal Group can guide you through every fiduciary duty with confidence.

Schedule a consultation with Russel Morgan, Esq.: https://calendly.com/russel-morgan/30min