NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3381
SPONSOR: Lavine TITLE OF BILL:
An act to amend the surrogate's court procedure act, in relation to
proof of lost or destroyed trusts
PURPOSE:
Provides statutory provisions for proving and establishing lost or
destroyed lifetime trusts
SUMMARY OF PROVISIONS:
Article 15 of the Surrogate's Court Procedure Act ("SCPA") (Trusts and
Trustees) be amended to add a new section, SCPA 5 1510 to read as
follows:
§ 1510: Proof of lost or destroyed trust
(a) A lost or destroyed trust may be proved in a proceeding only if:
(1) Execution of the trust and any amendments thereto are proved In the
manner required by New York law, or by the applicable law of the situs
at the time of execution;
(2) The trust has not been revoked; and
(3) All of the provisions of the trust are established by a copy or
draft of the trust proved to be true and complete, or in the absence of
copy or draft of the trust, by establishing the following:
(A) the designated trustee of the trust;
(B) the designated beneficiary or beneficiaries of the trust;
(C) the dispositive provisions of the trust; and
(D) that identifiable assets were transferred to and are held in the
trust.
(b) There shall be a presumption of due execution where it is estab-
lished that assets were transferred to the trust.
(c) There shall be a presumption that the trust was not revoked.
(d) In any proceeding to prove a lost or destroyed trust:
(1) The person or persons seeking to challenge the validity of the trust
shall have the burden of proof to establish that the trust has been
revoked; and
(2) The person or persons seeking to prove the validity of the trust
shall have the burden of proof on the requirements contained in para-
graphs (a) (1) and (a) (3).
(e) Process must issue to the following persons, if not petitioners, in
a proceeding to establish or challenge the validity of a lost or
destroyed trust:
(5) The beneficiaries under the will of the settlor admitted to probate
or offered for probate in any court of competent jurisdiction;
(6) The Attorney General if the trust is a charitable trust or if there
are persons unknown; and
(7) All such other persons as the court in Its discretion may determine.
Section 2. shall be effective immediately. Justification: The Trusts
and Estates Section (the "Section") seeks to add SCPA § 1510 to SCPA
Article 15 to provide a mechanism for establishing the existence of a
writing creating or amending a lifetime trust which was either lost or
destroyed. There is currently no statutory provisions for proving and
establishing lost or destroyed lifetime trusts under the SCPA.
New York taw contains provisions for proving and probating lost or
destroyed wills and testamentary trusts established thereunder (see SCPA
S 1407), however, there are no parallel provisions for proving and
establishing lost or destroyed lifetime trusts. The.need for a clear
mechanism to establish a lost lifetime trust has become increasingly
important with the use of lifetime trusts as will substitutes becoming
more prevalent. Furthermore, many lifetime trust instruments were
destroyed in the devastating attacks on September 11, 2001. Practition-
ers have reported situations in which only an unsigned copy, abstract or
other secondary evidence of a trust agreement could be found, but bank
accounts, securities, real property or other assets are registered in
the name of those trusts. There is some New York case law that provides
a mechanism to deal with lost trusts. However, clear statutory guidance
is needed. It is essential that assets held in a lifetime trust continue
to be held and administered for the trust beneficiaries if the existence
of the trust can be properly established. Simply because the physical
document evidencing the trust has been lost or destroyed does not and
should not extinguish the assets of that trust and the rights and inter-
ests therein. When a potential grantor/testator wishes to establish a
trust, he or she should be given the same measure of comfort that his or
her wishes will be honored, whether the trust is created under a Will or
under a separate trust instrument. The New York legislature has not
directly addressed the issue of lost or destroyed lifetime trusts.
However, the enactment of SCPA § 1407 - Proof of Lost or Destroyed Wilt
- clarified this Issue with creates a pointless dichotomy where testa-
mentary trusts established in lost wills have a set procedure to be
created while none exists for lost lifetime trusts.
Despite the absence of a statute, there is some New York case law on
point. Such case law has consistently held that the absence of the
executed original of an agreement pursuant to which a lifetime trust has
been established does not prevent a finding that a valid trust exists
(see e.g. Matter of Marcus Trusts, 191 Misc 2d 497, 499
Sur Ct, Nassau
County 20031, affdin part, appeal dismissed in part, 2 AD3d 640
2d Dept
2002)). This line of cases continues to be
* The execution of the trust and any amendments were enacted In accord-
ance with New York law. Alternatively, if the trust was executed out of
state, its execution must have been performed pursuant to the applicable
law of the situs at the time of the execution (see SCPA § 1510 (a) (1));
* The trust has not been revoked (see SCPA § 1510 (a) (2)); and
* All of the provisions of the trust are clearly and distinctly proved
by a copy or draft of the trust proved to be true and complete. If there
is no copy or draft of the trust, the proponent must establish the
designated trustee(s) of the trust, the designated beneficiary(ies) of
the trust, the trust's diapositive provisions, and that identifiable
assets were transferred to and are held In the trust (see SCPA § 1510
(a) (3)) followed and applied by the Surrogate's Court (see e.g. Matter
of Greene, NYU, Apr. 1, 2013 at. 23, col. 3 (Sur Ct, Kings County
2013)). In all cases, the party seeking to prove a trust must prove the
existence of designated trustee(s), the designated beneficiary, a clear-
ly Identifiable res, and delivery of the res by the grantor to the trus-
tee with the intent of vesting legal title In the trustee (see e.g.
Brown v Spohr, 180 NY 201,209 (1904); see also Martin v Funk, 75 NY 134,
142-143 (1878); Matson v Abbey, 24 NYS 284 (1893); Greene v Greene, 125
NY 506
1891). Where the presence of all four of the elements has been
demonstrated, New York courts have found that a valid lifetime trust
existed, despite a lack of the original or copy of the trust document
(see Matter of Marcus Trusts, 191 Misc 2d 497,499 (Sur Ct, Nassau County
2003), affd in part, dismissed in part 2 AD3d 640, 641 (2d Dept 2003);
see also Matter of Doman, 68 AD3d 862, 863 (2d Dept 2009)).
SCPA § 1510 (a) sets forth the elements of proving the existence of a
lost trust, and in large measure codifies the case law set forth above.
SCPA § 1510 (a) provides that a lost trust may be proven only if it is
established that:
SCPA 51510 (b) and (c) concern presumptions, both of which establish
presumptions to aid a party seeking to prove a lost trust. Subparagraph
(b) establishes a presumption of due execution in the event it is estab-
lished that assets were transferred to the trust. Subparagraph (c)
provides that there is a presumption that a trust was not revoked. The
latter presumption Is contrary to the lost will statute, which presumes
that a will was revoked if it was In the testator's possession prior to
death and cannot be located. The reason for this discrepancy is that
unlike with lost wills. In most
§ 1510 (d) (2) provides that the party seeking to establish the trust's
validity must prove the elements of SCPA § 1510 (a) (1) and
(a) (3). SCPA 61510 (e) sets forth the necessary parties in a proceed-
ing to prove a lost or destroyed trust. The list includes all nominated
trustees of the trust, fiduciaries as defined in SCPA 103 (21), all
persons designated as beneficiaries, all distributees of the settlor,4
and the beneficiaries named under the will of the settlor offered for
probate (see SCPA 51510 (e) (1-5)). In the event the trust is a charita-
ble trust or if there are persons unknown, the Attorney General Is also
a necessary party (see SCPA 51510
e6). Finally, the statute
contains the omnibus provision that permits the Court to require proceis
upon all such persons the Court determines in its discretion (see SCPA §
1510 (e) (7)).
The Section submits that new statute is necessary for the reasons stated
and should be implemented.
LEGISLATIVE HISTORY:
2023-24 A7750
FISCAL IMPLICATIONS:
None to the state.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
3381
2025-2026 Regular Sessions
IN ASSEMBLY
January 27, 2025
___________
Introduced by M. of A. LAVINE -- read once and referred to the Committee
on Judiciary
AN ACT to amend the surrogate's court procedure act, in relation to
proof of lost or destroyed trusts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The surrogate's court procedure act is amended by adding a
2 new section 1510 to read as follows:
3 § 1510. Proof of lost or destroyed trust
4 1. A lost or destroyed trust may be proved in a proceeding only if:
5 (a) Execution of the trust and any amendments thereto are proved in
6 the manner required by New York law, or by the applicable law of the
7 situs at the time of execution;
8 (b) The trust has not been revoked; and
9 (c) All of the provisions of the trust are established by a copy or
10 draft of the trust proved to be true and complete, or in the absence of
11 copy or draft of the trust, by establishing the following:
12 (i) the designated trustee of the trust;
13 (ii) the designated beneficiary or beneficiaries of the trust;
14 (iii) the dispositive provisions of the trust; and
15 (iv) that identifiable assets were transferred to and are held in the
16 trust.
17 2. There shall be a presumption of due execution where it is estab-
18 lished that assets were transferred to the trust.
19 3. There shall be a presumption that the trust was not revoked.
20 4. In any proceeding to prove a lost or destroyed trust:
21 (a) The person or persons seeking to challenge the validity of the
22 trust shall have the burden of proof to establish that the trust has
23 been revoked; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07194-01-5
A. 3381 2
1 (b) The person or persons seeking to prove the validity of the trust
2 shall have the burden of proof on the requirements contained in para-
3 graphs (a) and (c) of subdivision one of this section.
4 5. Process must issue to the following persons, if not petitioners, in
5 a proceeding to establish or challenge the validity of a lost or
6 destroyed trust:
7 (a) All nominated trustees of the trust;
8 (b) All persons designated as beneficiaries of the trust;
9 (c) All distributees of the settlor, unless the court dispenses with
10 such process;
11 (d) The fiduciary of the settlor's estate as defined in subdivision
12 twenty-one of section one hundred three of this chapter, if any;
13 (e) The beneficiaries under the will of the settlor admitted to
14 probate or offered for probate in any court of competent jurisdiction;
15 (f) The attorney general if the trust is a charitable trust or if
16 there are persons unknown; and
17 (g) All such other persons as the court in its discretion may deter-
18 mine.
19 § 2. This act shall take effect immediately.
