Statute of Limitations

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., in Woodbury, New York
• Pages: 39-40

The statute of limitations in commencing a proceeding against a trustee

may be a real headache for a trustee. It depends on the laws of the state

that has jurisdiction over the trust. Each state has different rules. For

example, the statute of limitations rules in New York and in Florida are

completely different.

According to the UTC, the failure of the trustee to give a bene-

ciary an adequate report that meets certain guidelines may present a

statute-of-limitations problem for the trustee. However, many states that

have adopted versions of the UTC do not mandate annual disclosures to

a trust beneciary or the representative of a trust beneciary.

Section 1005 of the Maine Uniform Trust Code provides in part as

follows:

Limitation of action against trustee

(1) Report; one-year limitation. A beneciary may not commence a

proceeding against a trustee for breach of trust more than one year

after the date the beneciary or a representative of the beneciary

was sent a report that adequately disclosed the existence of a poten-

tial claim for breach of trust and informed the beneciary of the

time allowed for commencing a proceeding.

(2) Disclosure of potential claim. A report adequately discloses the exis-

tence of a potential claim for breach of trust if it provides sufcient

information so that the beneciary or representative knows of the

potential claim or should have inquired into its existence.

(3) Six years. If subsection 1 does not apply, a judicial proceeding

by a beneciary against a trustee for breach of trust must be com-

menced within six years after the rst to occur of:

1. The removal, resignation, or death of the trustee;

2. The termination of the beneciary’s interest in the trust; and

39

STATUTE OF LIMITATIONS