A Trust accounting provides beneficiaries and interested parties with a detailed overview of the trust’s financial transactions and activities. When there is a lack of transparency or information, you can compel a trust accounting.
To Compel a trust accounting in New York Surrogate’s Court, you must be familiar with SCPA 2205 and SCPA 2206. This blog post outlines the steps and considerations involved in compelling a trust accounting in New York Surrogate’s Court, focusing on SCPA 2205 and SCPA 2206, and includes the procedure for filing a petition to compel a trust accounting.
Understand the Legal Basis and SCPA 2205, SCPA 2206:
Before proceeding, it’s crucial to understand the legal basis for compelling a trust accounting in New York. The New York Estates, Powers and Trusts Law (EPTL) and the Surrogate’s Court Procedure Act (SCPA), particularly SCPA 2205 and SCPA 2206, govern trust accounting and the rights of beneficiaries.
Establish Standing To Compel a Trust Accounting:
To compel a trust accounting under SCPA 2205 and SCPA 2206, you need to have legal standing as a concerned party. This typically includes being a beneficiary, an interested party, or someone with a legal interest in the trust. Ensure you have the legal authority to request an accounting.
Review the Trust Document.
Familiarize yourself with the trust document Understanding both the trust’s terms and the relevant statutory provisions is crucial in making a compelling case in Surrogate’s Court. Make sure you are in fact either a beneficiary under the Trust or a person interested in the Trust, a creditor of the Trust, or have the appropriate relationship with the Trust.
Send a Demand Letter and Draft and File a Petition to Compel a Trust Accounting:
Before you actually file a petition to compel a trust accounting, you should send a demand letter to the Trustee, requesting an accounting. This will show the Court that you attempted to amicably resolve matters first before running to Court. It will also show the Court that the trustee is not being responsive.
If the Trustee has not responded to your letter and request for an accounting, then you can prepare a formal petition to compel a trust accounting. The petition should clearly outline the reasons for requesting a trust accounting.
The petition can be fairly basic. It just needs to say who you are, your relationship to the trust, and your attempts to get information from the Trustee. You should also explain to the Court that the Trustee has rebuffed or even ignored your requests.
Ensure that your petition complies with the formatting and content requirements of the New York Surrogate’s Court.
File the Petition with the Surrogate’s Court:
Submit the drafted petition to the Surrogate’s Court in the appropriate county in New York. Pursuant to SCPA 207, the correct venue is either: the County where the Trustee resides, or the County where there is Trust property, or, where the grantor of the trust resided at the time the proceeding was commenced.
You will need to file a Petition and a Citation. Follow the court’s guidelines for filing, including paying any necessary filing fees and ensuring that all required documentation is included.
Serve Notice to All Relevant Parties:
Once the Court reviews your petition, the Court will issue a Citation. You must then serve the Citation on all interested parties, including the trustee and other beneficiaries, as required by law. This ensures that all parties are informed of the proceedings and have an opportunity to respond.
On the return date of Citation, you should appear and explain that you are entitled to an accounting but the Trustee has refused to provide same. The Court will likely Order an Accounting of the Trust.
The Court will ask you to prepare the Order directing the accounting. You will then prepare the Order and after preparing the Order, submit it to the Court. Once the Court signs the Order, you must serve a CERTIFIED COPY of the Order to Account on the Trustee.
The reason you serve as certified copy is so that the clock can start on the Trustees obligation to account. If the Trustee does NOT account after being served with the Certified Copy, then you can move to remove the Trustee or hold the Trustee in contempt of Court.
Review the Trust Accounting:
Once the trust accounting is provided, review it carefully. Typically the Trustee will have to judicially settle the account, which means you will be able to not only review the Trust accounting, but you will also be entitled to the backup of the Trust. You will also be allowed to depose the Trustee in what are known as SCPA 2211 examinations. This can thereafter lead to a contested accounting proceeding.
In order to Compel a trust accounting in New York Surrogate’s Court involves a thorough understanding of relevant laws, legal standing, and a proper procedure for filing a petition. Seeking professional legal guidance and following the appropriate steps while considering SCPA 2205 and SCPA 2206 will help you navigate the process and uphold transparency and accountability in trust management.
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