What's happening
This bill amends the Surrogate's Court Procedure Act to clarify and expand the rules on commissions for donees of a power in trust, including those during minority, aligning them with commissions for trustees and corporate fiduciaries.
Why it matters
Expands who can receive commissions. The bill clarifies that "donees of a power in trust," including those acting during someone’s minority (i.e., managing assets for minors), are entitled to commissions for their services, similar to trustees and corporate fiduciaries. This ensures these fiduciaries are compensated for managing assets, potentially making it easier to find individuals or institutions willing to serve in these roles.
Aligns oversight and transparency requirements. Donees of a power in trust must now provide annual financial statements to beneficiaries or interested parties, just like trustees. This increases transparency, giving beneficiaries more information about how their assets are managed and what fees are being taken.
Standardizes commission rates and calculations. The amendments detail how commissions are calculated for donees of a power in trust, matching those for trustees and corporate fiduciaries. This removes ambiguity and creates fair, predictable compensation across fiduciaries, reducing disputes and administrative confusion.
Clarifies treatment of corporate and individual fiduciaries. The bill specifies how commissions apply to both individual and corporate fiduciaries acting as donees of a power in trust, including how multiple fiduciaries split commissions. This clarification helps avoid overcompensation and ensures equitable distribution of fees, especially in complex or multi-fiduciary arrangements.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Update Trustee Commission Rules
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Signed chap.601
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading cal.448
- Substituted for A7522
- Referred to judiciary
- Delivered to assembly
- Passed senateVote 58–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.704
Show 1 earlier action
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Update Trustee Commission Rules
Assembly Floor Calendar · Sponsor David Buchwald
Full text
18 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5512
2019-2020 Regular Sessions
IN SENATE
May 3, 2019
Introduced by Sen. HOYLMAN -- (at request of the Office of Court Administration) -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary
AN ACT to amend the surrogate's court procedure act, in relation to the commissions of donees of a power in trust, including donees of a power during minority
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 2306 of the surrogate's court procedure act is amended to read as follows: § 2306. Annual statements to be furnished to beneficiaries
Any trustee, donee of a power during minority or donee of a power in trust who is not required to furnish annual statements under either 2308 or 2309 because he or she has not retained annual commissions shall nevertheless be required to furnish the annual statements referred to in those sections to any beneficiary receiving income or any person interested in the principal of the trust who shall request such statements, or in the case of a power during minority or of a power in trust, to the beneficiary of the power in trust, or to a person to whom a payment not exceeding $10,000 could be made under subdivision 1 of section 2220 of this chapter.
§ 2. The opening paragraph of subdivision 1 of section 2307 of the surrogate's court procedure act, as amended by chapter 474 of the laws of 1994, is amended to read as follows:
Except as otherwise provided in paragraph (f) of this subdivision on the settlement of the account of any fiduciary other than a trustee, a donee of a power during minority or a donee of a power in trust, the court must allow to him or her the reasonable and necessary expenses actually paid by him or her and if he or she be an attorney of this state and shall have rendered legal services in connection with his or her official duties, such compensation for his or her legal services as
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10140-01-9
S. 5512 2
appear to the court to be just and reasonable and in addition thereto it must allow to the fiduciary for his or her services as fiduciary, and if there be more than one, apportion among them according to the services rendered by them respectively the following commissions:
§ 3. Section 2308 of the surrogate's court procedure act, the section heading and subdivision 1 as amended by chapter 503 of the laws of 1980, paragraph (c) of subdivision 1 as added by chapter 376 of the laws of 2001, subdivision 2 as amended by chapter 654 of the laws of 1993, subdivision 3 as amended by chapter 243 of the laws of 2001, subdivisions 4, 6, 7 and paragraph (d) of subdivision 9, as amended and subdivision 12 as added by chapter 237 of the laws of 1978, paragraph (a) of subdivision 5 as amended and subdivision 13 as added by chapter 936 of the laws of 1984, paragraphs (a) and (b) of subdivision 6 as amended by chapter 245 of the laws of 1991, and subdivision 8 as amended by chapter 685 of the laws of 1967, is amended to read as follows: § 2308. Commissions of trustees, donees of power during minority and
donees of powers in trust under wills of persons dying, or
under lifetime trusts created, on or before August 31, 1956
1. On the settlement of the account of any trustee or donee of power in trust under the will of a person dying on or before August 31, 1956, or under a lifetime trust established on or before August 31, 1956, the court must allow him or her his or her reasonable and necessary expenses actually paid by him or her and if he or she be an attorney of this state and shall have rendered legal services in connection with his or her official duties, such compensation for his or her legal services as shall appear to the court to be just and reasonable and in addition thereto it must allow to the trustee or to the donee of the power in trust for his or her services as trustee or donee of the power in trust the following commissions from trust principal or property subject to the power in trust:
(a) For receiving principal or property subject to the power in trust
(1) all sums of money constituting principal or property subject to the power in trust not exceeding $2,000 at the rate of 3 per cent;
(2) all additional sums of principal or property subject to the power in trust not exceeding $10,000 at the rate of 1 1/2 per cent;
(3) all sums of principal or property subject to the power in trust above $12,000 at the rate of 1 1/4 per cent; and
(b) For paying out principal or property subject to the power in trust at the rate of 1 per cent.
(c) Notwithstanding the provisions of section 8 of chapter 237 of the laws of 1978, commissions provided by paragraph (a) of this subdivision for receiving principal or property subject to the power in trust shall not be allowed to a trustee or donee of a power in trust who qualifies to act as such on or after June 5, 1978, and shall not be allowed on additions of property received on or after June 5, 1978; such commissions on any increments in property that are payable by reason of any sale, exchange or liquidation of such property shall be allowed on the lesser of (1) the amount of such increments on the date of sale, exchange or liquidation of such property and (2) the amount of such increments on June 5, 1978; and such commissions on any increments in property that are payable by reason of any distribution of such property shall be allowed on the lesser of (1) the amount of such increments on the date of distribution of such property and (2) the amount of such increments on the effective date of this paragraph.
S. 5512 3
2. In addition to the commission allowed by subdivision one a trustee or a donee of a power in trust shall be entitled to annual commissions at the following rates:
(a) $10.50 per $1,000 or major fraction thereof on the first $400,000 of principal or property subject to the power in trust;
(b) $4.50 per $1,000 or major fraction thereof on the next $600,000 of principal or property subject to the power in trust; and
(c) $3.00 per $1,000 or major fraction thereof on all additional principal or property subject to the power in trust.
Such annual commissions shall be computed either on the value of the principal of the trust or of the property subject to the power in trust at the end of the period for which the commissions are payable or, at the option of the trustee or of the donee of the power in trust, on the value of the principal of the trust or of the property subject to the power in trust at the beginning of such period, provided that the option elected by the trustee or of the donee of the power in trust for the first period for which such commissions are payable shall be used during the continuance of the trust or of the power in trust and shall be binding on any successor or substitute trustee or trustees or successor or substitute donees of the power in trust. In the case of a trust or power in trust which prior to January 1, 1994 computed annual commissions on the basis of a 12 month period (other than a calendar year), the trustee's or donee's prior election of such 12 month period shall be binding unless, prior to January 1, 1995, the trustee or donee makes a new election to compute annual commissions on the basis of a calendar year either on the value of the principal of the trust or of the property subject to the power in trust at the end of, or at the option of the trustee or donee of the power in trust at the beginning of, the calendar year for which the commissions were payable, which new election shall be used during the remaining continuance of the trust or of the power in trust and shall be binding on any successor or substitute trustee or trustees or donee or donees of the power in trust. The computation shall be made on the basis of a 12 month period but the amount so computed payable to a trustee or donee of a power in trust shall be proportionately reduced or increased for any payments made in partial distribution of the trust or of the property subject to the power in trust or receipt of any additional property into the trust or by the donee of a power in trust within such period and shall be proportionately reduced in any period for which such commissions are payable to the trustee or donee of the power in trust if the period is less than 12 months. For the purpose of computing the annual commissions the value of any principal asset when received by the trust or by the donee of a power in trust shall be the presumptive value of the asset at the beginning and end of the period for which such commissions are payable. In computing the value of the principal of the trust or of the property subject to the power in trust the trustee or the donee of the power in trust may use the presumptive value in respect of any principal asset or may use the actual value of the asset. On the settlement of the account of the trustee or of the donee of a power in trust any person interested may dispute the amount of any commission claimed or retained. The burden of proving that the actual value of any principal asset differs from its presumptive value is upon the trustee, the donee of the power in trust or other person claiming the difference.
3. Unless the will otherwise explicitly provides, the annual commissions allowed by subdivision two of this section shall be payable onethird from the income of the trust or of the property subject to the
S. 5512 4
power in trust and two-thirds from the principal of the trust or from the property subject to the power in trust. However, in the case of a trust whose definition of income is governed by 11-2.4 of the estates, powers and trusts law, such annual commissions shall be payable from the corpus of any such trust after allowance for the unitrust amount and shall not be payable out of such unitrust amount.
4. The commissions allowed by subdivision 2 may be retained by a trustee or donee of a power in trust provided he or she furnishes annually as of a date not more than 30 days prior to the end of the trust year selected by the trustee or the calendar year, to each beneficiary currently receiving income, and to any other beneficiary interested in the income and to any person interested in the principal of the trust who shall make a demand therefor or to the beneficiary of the power in trust who shall make a demand therefor, a statement showing the principal assets or the property subject to the power in trust on hand on that date, and at least annually or more frequently if the trustee or donee of a power in trust so elects, a statement showing all his or her receipts of income and principal or property subject to the power in trust during the period with respect to which the statement is rendered including the amount of any commissions retained and the basis upon which the commissions were computed. A trustee or donee of a power in trust shall not be deemed to have waived any commissions by reason of his or her failure to retain them at the time when he or she becomes entitled thereto; provided however that commissions from income for any given trust or calendar year shall be allowed and retained only from income derived from the trust or from the property subject to the power in trust during that year and shall not be supplied from income on hand in respect of any other trust or calendar year. If a beneficiary receiving income does not desire to be furnished with any such statement his or her advice to the trustee or to the donee of the power in trust to that effect in writing shall thereafter excuse the trustee or donee of the power in trust from furnishing such statement to the beneficiary unless and until the beneficiary requests such annual statements from the trustee or donee of the power in trust.
5. (a) During the continuance of a trust created solely for public, religious, charitable, scientific, literary, educational or fraternal uses and during the period of continuance of such a trust after the termination of a life use or uses the trustee shall be entitled to and may retain commissions from income in an amount annually equal to 6 per cent of income collected in each year.
(b) In the case of a trust created solely for public, religious, charitable, scientific, literary, educational or fraternal uses the trustee shall not be entitled to any commission from principal.
(c) In the case of such a trust which continues after the termination of a life use or uses the trustee for the period of the measuring life or lives shall be entitled to commissions from income and principal at the rates and according to the terms otherwise provided in this section, except that he or she shall not be entitled to any commissions for paying out any amount of principal.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the surrogate's court procedure act, in relation to the commissions of donees of a power in trust, including donees of a power during minority
This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of his Surro- gate's Court Advisory Committee.
This measure would amend the Surrogate's Court Procedure Act to create rules governing the commissions of donees of powers in trust, including donees of powers during minority, identical to the existing rules governing commissions of trustees.
Read the full memo (842 words)
The concept of a "power in trust" is long established in New York law. Current law in section 10-3.1(b) of the EPTL refers to "a power during minority to manage property vested in an infant" as one of the powers which is not a power of appointment but to which the provisions of arti- cle 10 generally apply. Such a donee is included in the definition of "fiduciary" in the EPTL (section 2-1.7) and in the SCPA (section 103(21)) (both referring to "donee of a power during minority").
It is clear, however, that donees of a power in trust are not limited to donees holding the power during the minority of the beneficiary. Although the express statutory references to powers in trust refer only to powers to manage property vested in an infant, EPTL 10-10.1, which expressly retain as the law of New York the common law of powers except as modified by article 10, the statement by the Bennett Commission that this provision does not invalidate other powers not specifically mentioned,* and case law**, clearly indicate that a power in trust to manage property vested in an incapacitated person does exist under New York law.
The question of compensation of such donees of powers during minority and powers in trust to manage property vested in an incapacitated person and presumably of any other donees of powers in trust that may exist under New York common law is not clearly answered by our statutes. Matter of Chase Manhattan Bank (Golding)*** authorized advance payment of commissions under SCPA 2311 to a corporate trustee acting as donee of a power to manage property during minority under a lifetime trust. The court also ordered that the calculation of commissions was to be made under section 2307 of the SCPA, which governs payments to fiduciaries other than trustees because the donee was not a trustee. The court did suggest that it would be more appropriate to calculate commissions under sections 2308 and 2309 of the SCPA, which govern commissions of trus- tees. Today section 2312 of the SCPA, governing the commissions of corporate trustees, must be added to the list of potentially applicable provisions.
This proposal amends the SCPA to make the provisions applicable to trus- tees' commissions applicable to all donees of powers in trust. The specific sections of the SCPA to be amended are 2306, 2307, 2308, 2309, 2312, and 2313.
The amendments to sections 2308, 2309, and 2312 use the language "donee of a power in trust" in order to make sure that every sort of power in trust that could still exist under the common law is included in the new provisions. Each section has also been amended to make it clear that the new language includes donees of powers during minority. The phrase "donee of a power in trust" has been added to every reference to "trus- tee" except in those provisions dealing with trustees of charitable trusts and those providing for the transition from the previous rules governing commissions. Because donees of a power in trust will be enti- tled to trustees' commissions only from the enactment of these amend- ments, the transition rules are not relevant. The term "property subject to the power in trust" has been used as the equivalent of "trust proper- ty" and the term "calendar year" has been added to references to "trust year" because the property subject to the power does indeed belong to the beneficiary of the power, the items of income and deduction attrib- utable to it would be included in the beneficiary's gross income reported on IRS form 1040 and the tax year would indeed be the calendar year.
This measure would have no fiscal impact upon the State and would be applicable to donees of powers during minority and of other powers in trust effective on the first day of January next succeeding the date on which this measure becomes law, thus avoiding the need for proration of commissions in the initial year of the new regime.
2015-16 LEGISLATIVE HISTORY:
OCA 2015-17
Assembly 9879 (M. of A. Buchwald) (PASSED)
2017-18 LEGISLATIVE HISTORY:
OCA 2017-50
Assembly 6046 (M. of A. Buchwald) (PASSED) * Report of Temporary State Comm. on Modernization, Revision and Simplification of Law of Estates, Fourth Report, N.Y. Legis. Doc., 1965 No. 19, at 24. ** See Matter of Schaper, 151 Misc.2d 923 (Sur. Ct. New York County 1991)
*** 129 Misc.2d 952 (Sur. Ct. New York County 1985).
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.