Changing the Trustee of a Testamentary Trust in New York State

Changing the Trustee of a Testamentary Trust in New York State

A trust is a document created by an individual (i.e., the Grantor) directing a Trustee to hold property or assets for the benefit of another person or entity (the Beneficiary”) based on certain terms and conditions. 

Inter Vivos Trust vs Testamentary Trust

An inter vivos trust is created by a Grantor to be administered during the person’s life, and it may be revocable or irrevocable.  These come in many forms, but frequently include Irrevocable Life Insurance Trusts (ILIT), Qualified Personal Residence Trust (QPRT), Supplemental Needs Trust (SNT), or Grantor Retained Annuity Trust (GRAT).  Inter vivos trusts generally have terms for the appointment of a successor Trustee, usually with a simple document or consent signed by the parties.

A testamentary trust is created under a person’s Will to take effect upon their death.  This trust is irrevocable because the individual who created it is no longer alive to make any amendments or revocations.  The Trust frequently includes a list of individuals who are to serve as successor trustee.  However, unlike an inter vivos trust, appointment of a new Trustee may only be done by an application to the Surrogate’s Court. 

Successor Trustee Nominated in Will

If the successor Trustees are identified in the Will or testamentary trust, the petitioner, which may be the existing trustee or the successor trustee or the beneficiaries, must petition the Court requesting that the identified successor Trustee be appointed.  In these cases, the process is generally predictable, but can take several weeks for the Court to process the application and appoint a successor Trustee.

Successor Trustee Not Named in Will

If, however, the successor Trustee is not identified, the petitioner must demonstrate that the interests of the current and future beneficiaries are best served by appointing the successor trustee.  If any beneficiary is a minor child or a person under a disability, the parent or guardian may have standing to consent on behalf of such beneficiary.  In certain cases, the Court may appoint a Guardian ad Litem (GAL) to represent the interests of the minor or disabled person.  This process may take several months.

Decree or Order Appointing Successor Trustee

If the Surrogate agrees that the nominated successor Trustee is fit to be appointed and in the best interest of the beneficiaries, he or she will sign a Decree or Order appointing the Successor Trustee.  At that time, Letters of Successor Trusteeship will be issued and the appointed successor trustee may begin serving in a fiduciary capacity to carry out the terms of the Testamentary Trust instrument.