Estate, Powers and Trusts, § 11-1.1: Fiduciaries' Powers

Under New York estate law, a fiduciary is defined as a person who is appointed to serve in a position of trust and who acts of the benefit of another person. There are a number of different types of fiduciaries including a trustee. A trustee is the person who holds title to property that is held in a trust for the benefit of a beneficiary or beneficiaries and is primarily responsible for day-to-day trust administration. The trust document details the duties and responsibilities of the trustee. When performing his or her duties, the trustee is required to act honestly and in good faith. New York probate law defines what a fiduciary is permitted to do with respect to trust property. According to New York Estate, Powers and Trusts, § 11-1.1, a fiduciary is allowed to invest or reinvest trust property, and a fiduciary is allowed to collect rent related to trust property. Whether you are a fiduciary, beneficiary, a testator or trust settlor, it is important that you understand the duties and responsibilities of a fiduciary. Contact an experienced New York Trust Lawyer who will be able to answer your questions related to fiduciary responsibilities and who will help you set up a trust that is consistent with New York trust and estate law.

1. Tax elections by personal representatives: Estates, Powers and Trusts, § 11-1.2
2. Power and duty of executor before probate: Estates, Powers and Trusts, § 11-1.3
3. Validity of execution of power to sell, mortgage or lease real property by less than all qualifying executors: Estates, Powers and Trusts, § 11-1.4
4. Payment of testamentary dispositions or distributive shares: Estates, Powers and Trusts, § 11-1.5
5. Property held as a fiduciary to be kept separate: Estates, Powers and Trusts, § 11-1.6

As defined in EPTL 11-1.2, the powers of a fiduciary include:

1. To acquire the remaining undivided interest in the property of an estate or trust in which the fiduciary, in his fiduciary capacity, holds an undivided interest.
2. To invest and reinvest property of the estate or trust.
3. To effect and keep in force insurance to protect the property and to protect the fiduciary.
4. To take collect rent.
5. To sell property.
6. To mortgage property.
7. To lease property.

1. As used in this §, unless the context or subject matter otherwise requires, (1) the term “estate” means the estate of a decedent;  (2) the term “trust” means any express trust of property, created by a will, deed or other instrument, whereby there is imposed upon a trustee the duty to administer property for the benefit of a named or otherwise described income or principal beneficiary, or both.  A trust shall not include trusts for the benefit of creditors, resulting or constructive trusts, business trusts where certificates of beneficial interest are issued to the beneficiary, investment trusts, voting trusts, security instruments such as deeds of trust and mortgages, trusts created by the judgment or decree of a court, liquidation or reorganization trusts, trusts for the sole purpose of paying dividends, interest, interest coupons, salaries, wages, pensions or profits, instruments wherein persons are mere nominees for others, or trusts created in deposits in any banking institution or savings and loan institution;  (3) the term “fiduciary” means administrators, executors, preliminary executors, administrators d.b.n., administrators c.t.a.d.b.n., administrators c.t.a., ancillary executors, ancillary administrators, ancillary administrators c.t.a and trustees of express trusts, including a corporate as well as a natural person acting as fiduciary, and a successor or substitute fiduciary, whether designated in a trust instrument or otherwise.
2. In the absence of contrary or limiting provisions in the court order or decree appointing a fiduciary, or in a subsequent order or decree, or in the will, deed or other instrument, every fiduciary is authorized:
   1. To accept additions to any estate or trust from sources other than the estate of the decedent or the settlor of a trust.
   2. To acquire the remaining undivided interest in the property of an estate or trust in which the fiduciary, in his fiduciary capacity, holds an undivided interest.
   3. To invest and reinvest property of the estate or trust under the provisions of the will, deed or other instrument or as otherwise provided by law.
   4. To effect and keep in force fire, rent, title, liability, casualty or other insurance to protect the property of the estate or trust and to protect the fiduciary.
   5. With respect to any property or any estate therein owned by an estate or trust, except where such property or any estate therein is specifically disposed of:
      1. To take possession of, collect the rents from and manage the same.
      2. To sell the same at public or private sale, and on such terms as in the opinion of the fiduciary will be most advantageous to those interested therein.
      3. With respect to fiduciaries other than a trustee, to lease the same for a term not exceeding three years and, in the case of a trustee, to lease the same for a term not exceeding ten years although such term extends beyond the duration of the trust and, in either of such cases, including the right to explore for and remove mineral or other natural resources, and in connection with mineral leases to enter into pooling and unitization agreements.
      4. To mortgage the same.
      5. Any power to take possession of, collect the rent from, manage, sell, lease or mortgage, granted by this subparagraph (5), which is prohibited by the terms of the will, deed or other instrument or by the provisions of this subparagraph (5), nonetheless exists, upon the approval of the surrogate, where such power is necessary for the purposes set forth in SCPA 1902.

A fiduciary has a great deal of power over property to which he or she is entrusted. The manner in which a fiduciary fulfills his responsibilities will have a bearing on the financial future of the beneficiaries. Thus, it is important that a fiduciary understands exactly what is and is not permissible under New York trust law and under the terms of the trust document. To learn more about the duties of a fiduciary, contact Stephen Bilkis and Associates at 800.696.9529 to schedule a free, no obligation consultation regarding your estate issue.