2023 New York Laws › EPT - Estates, Powers and Trusts › Article 8 - Charitable Trusts › Part 1 - Rules Governing Charitable Trusts › 8-1.4 - Supervision of Trustees for Charitable Purposes

§ 8-1.4 Supervision of trustees for charitable purposes
(a)  For  the  purposes  of  this  section,  "trustee"  means  (1) any
individual, group of  individuals,  executor,  trustee,  corporation  or
other  legal  entity  holding  and administering property for charitable
purposes, whether pursuant to  any  will,  trust,  other  instrument  or
agreement,  court  appointment, or otherwise pursuant to law, over which
the attorney general has enforcement  or  supervisory  powers,  (2)  any
non-profit  corporation  organized  under  the  laws  of  this state for
charitable purposes and (3) any non-profit foreign corporation organized
for charitable purposes, doing business  or  holding  property  in  this
state. Neither a foreign corporation nor a trustee acting under the will
of,  or  an  agreement  executed  by, a non-resident of this state shall
become subject to the provisions of this section  merely  by  reason  of
maintaining  a  bank,  custody,  investment  or  similar account in this
state.
(b) The registration and reporting provisions of this section  do  not
apply  to  (1)  the United States, any state, territory or possession of
the United States, the District of Columbia, the Commonwealth of  Puerto
Rico  or  to any of their agencies or governmental subdivisions, (2) any
trustee which is required by any other provision  of  law  to  render  a
full,  complete  and itemized annual financial report to the congress of
the United States or to the legislature of  this  state,  provided  that
such  report  contains  the information required of trustees pursuant to
this  article,  (3)   corporations   organized   under   the   religious
corporations  law  and  other  religious agencies and organizations, and
charities, agencies and organizations operated, supervised or controlled
by or in connection  with  a  religious  organization,  (4)  educational
institutions incorporated under the education law or by special act, (5)
any    hospital,   (6)   fraternal,   patriotic,   veterans,   volunteer
firefighters, volunteer ambulance workers,  social,  student  or  alumni
organizations  and  historical societies chartered by the New York state
board of regents, (7) a trust for which there  is  a  corporate  trustee
acting  as  sole  trustee  or  co-trustee under the terms of a will of a
decedent who died domiciled in a state other than New York  or  a  trust
instrument  executed by a non-resident of the state of New York, (8) any
trust in which and so long as the charitable  interest  is  deferred  or
contingent,  (9)  any  person who, in his or her capacity as an officer,
director or trustee of any corporation or organization mentioned in this
paragraph, holds property for the religious, educational  or  charitable
purposes of such corporation or organization so long as such corporation
or organization is registered with the attorney general pursuant to this
section,  (10)  any  cemetery  corporation  subject to the provisions of
article fifteen of the not-for-profit corporation law,  (11)  the  state
parent   teachers   association  and  any  parent  teachers  association
affiliated with an  educational  institution  that  is  subject  to  the
jurisdiction  of  the  state  education department, (12) any corporation
organized under article forty-three of the insurance law. The provisions
of this subdivision shall apply only to the registration  and  reporting
requirements  of  this  section  and  shall not limit, impair, change or
alter  any  other  provision  of  this   article,   the   not-for-profit
corporation law or any other provision of law.
(c)  The  attorney  general shall establish and maintain a register of
all trustees containing such information as the attorney  general  deems
appropriate,  and  to  that end may conduct such investigations as he or
she  deems  necessary  and  shall  obtain  from  public  records,  court
officers,  taxing  authorities,  trustees  and other sources without the
payment  of  any  fee  or  charge,  whatever  information,   copies   of

instruments,  reports  and  records are needed for the establishment and
maintenance of the register.
(d)  Every  trustee  shall  file with the attorney general, within six
months after any property held by him or her or any income therefrom  is
required  to be applied to charitable purposes, a copy of the instrument
providing for his or her title, powers and  duties;  provided,  however,
that  any  trustee  currently  registered  with  the  department  of law
pursuant to article 7-A of the executive law shall  be  deemed  to  have
complied  with  this paragraph. If any property held by a trustee or any
income therefrom is required to be applied to charitable purposes at the
time this section becomes effective, the filing shall be made within six
months thereafter.
(e) (1) Whenever any trustee or other person, holding property or  any
income  therefrom,  which  may  be required at any time to be devoted to
charitable purposes, shall file in any  court  in  this  state  (A)  any
petition  for instructions relating to the administration or use of such
property or income,  (B)  any  petition  for  the  construction  of  the
instrument under which such property or income is held, (C) any petition
respecting the disposition or distribution of such property or income or
(D)  any  accounting,  due  notice  of the action or proceeding shall be
served by the petitioner upon the attorney general together with a  copy
of any petition, accounting, will or trust instrument.
(2)  Whenever  any  instrument of a testamentary nature which provides
for a disposition for charitable purposes  is  the  subject  of  (A)  an
application  for  denial of probate, (B) objections to probate or (C) an
application for  approval  of  a  compromise  agreement  in  respect  of
probate,  due  notice of the action or proceeding shall be served by the
petitioner upon the  attorney  general  together  with  a  copy  of  the
instrument and of any such application, objections or agreement.
(f)  (1)  Every  trustee  shall,  in  addition to filing copies of any
instrument required under paragraph (d) of this section, file  with  the
attorney  general  and  all  identified current charitable beneficiaries
written annual financial reports, under penalties for perjury, on  forms
prescribed  by the attorney general, setting forth information as to the
nature of the assets held for charitable purposes and the administration
thereof by the trustee, and shall, file with the  attorney  general  and
all   identified  current  charitable  beneficiaries  a  notice  of  the
termination of the interest of any party in a trust that would cause all
or part of the trust assets to be applied to charitable purposes  or  to
have  the  income  therefrom  so  applied,  in accordance with rules and
regulations of the attorney general.
(2) Trustees required to report to the attorney general under  article
7-A of the executive law shall comply with this paragraph by filing with
the  attorney  general in addition to any other reports required herein,
copies of the  financial  reports  required  by  section  172-b  of  the
executive law unless such reports have been filed previously.
(g)  Unless the filing of reports is suspended as herein provided, the
first report of any trustee shall be filed  no  later  than  six  months
after  the  end of the fiscal year of the trustee during which he or she
becomes subject to this section.
(h) The attorney general shall make rules  and  regulations  necessary
for  the administration of this section, including rules and regulations
as to the time for filing reports, the contents thereof, and any  manner
of  executing  and filing them, including but not limited to allowing or
requiring any submission to the  attorney  general  to  be  effected  by
electronic  means  and  electronic  signatures.  He  or she may classify
trusts, estates, corporations and other trustees as to  purpose,  nature
of  assets,  duration,  amount  of  assets,  amounts  to  be  devoted to

charitable purposes, or otherwise, and may establish different rules for
different classes as to time and nature of the reports required, to  the
ends  that  he  or she shall receive current financial reports as to all
such  trusts,  estates, corporations or other trustees which will enable
him or her to ascertain whether they are  being  properly  administered.
The attorney general may suspend the filing of financial reports as to a
particular  trustee  for a reasonable, specifically designated time upon
written application of the trustee, signed under penalties for  perjury,
and  filed  with the attorney general and after the attorney general has
filed in the register of trustees a written statement that the interests
of the beneficiaries will not be prejudiced thereby  and  that  periodic
reports  during  the term of such suspension are not required for proper
supervision by his or her office. The filing of  the  financial  reports
required  by  this  section,  or  the  exemption from such filing or the
suspension therefrom, shall not have the effect  of  absolving  trustees
from  any  responsibility  for accounting for property or income held by
them for charitable purposes. A copy of an account  or  other  financial
report  filed by a trustee in any court in this state, if the account or
other  financial  report  substantially  complies  with  the  rules  and
regulations  of the attorney general, may be filed as a financial report
under this section.
(i)  The   attorney   general   may   investigate   transactions   and
relationships  of trustees for the purpose of determining whether or not
property held for charitable purposes has been  and  is  being  properly
administered.  The  attorney general, his or her assistants, deputies or
such other officers as may be designated by him or her, are empowered to
subpoena  any  trustee,  agent,  fiduciary,  beneficiary,   institution,
association  or  corporation  or other witness, examine any such witness
under oath and, for this purpose, administer the  necessary  oaths,  and
require  the  production of any books or papers which they deem relevant
to the inquiry.
(j) No person shall be excused from attending such inquiry pursuant to
the mandate of a subpoena, or from producing a paper or  book,  or  from
being examined or required to answer a question on the ground of failure
of  tender or payment of a witness fee or mileage, unless at the time of
such appearance or production, as the case may be, such witness makes  a
demand  for such payment as a condition precedent to the offering of the
testimony or production required by the subpoena and such payment is not
thereupon made. The provisions for payment of a witness fee  or  mileage
do not apply to any trustee or other person holding funds for charitable
purposes,  or  to  any  person  in  the employ of any such person, whose
conduct or practices are being investigated.
(k) If a person subpoenaed to attend such inquiry fails  to  obey  the
mandate  of  a  subpoena  without  reasonable  cause,  or if a person in
attendance upon such inquiry shall without reasonable cause refuse to be
sworn or to be examined or to answer a question or to produce a paper or
book when ordered so to do by the officer conducting such inquiry, he or
she shall be subject to proceedings under  subdivision  (b)  of  section
2308 of the civil practice law and rules.
(l) The register, copies of the instruments and the reports filed with
the  attorney  general  shall  be  open to public inspection, subject to
reasonable rules and regulations adopted by the attorney general,  which
may  include  such  limitations  as  to  type  of information subject to
inspection or purpose of inspection as the attorney general  shall  deem
to  be  in the public interest. The attorney general shall withhold from
public inspection copies of any report filed with any other governmental
agency of this state or of the United States and required by law  to  be
kept  confidential  by  such  agency,  and  shall,  upon  request of the

trustee, withhold from public inspection that portion of any  instrument
filed  which  does  not  relate  to charitable purposes and which is not
otherwise of public record.
(m)  The  attorney  general  may  institute appropriate proceedings to
secure  compliance  with  this  section  and  to   secure   the   proper
administration  of any trust, corporation or other relationship to which
this section applies. The powers and  duties  of  the  attorney  general
provided  in this section are in addition to all other powers and duties
he or she may have. No court shall modify or terminate  the  powers  and
responsibilities  of  any trust, corporation or other trustee unless the
attorney general is a party to  the  proceeding,  but  nothing  in  this
section shall otherwise impair or restrict the jurisdiction of any court
with respect to the matters covered by it. The failure of any trustee to
register  or  to  file reports as required by this section may be ground
for judicial removal of any person responsible for such failure.
(n) This section shall apply regardless of any contrary provisions  of
any  instrument and shall be liberally construed so as to effectuate its
general purpose of protecting the public interest  in  charitable  uses,
purposes and dispositions.
(o)  Every  officer,  agency,  board  or  commission  of this state or
political subdivisions of  this  state  or  agencies  thereof  receiving
applications  for exemption from taxation of any trustee subject to this
section shall annually file with the attorney  general  a  list  of  all
applications  received  during  the  year  and shall notify the attorney
general  of  any  suspension  or  revocation  of  a  tax  exempt  status
previously granted.
(p)  The  attorney general shall collect from each trustee at the time
of filing of the periodic reports required by this section a fee for the
filing of such reports as follows:
(1) Twenty-five dollars, if the net worth of the property held by such
trustee for charitable purposes is less than fifty thousand dollars,
(2) Fifty dollars if such net worth is fifty thousand dollars or  more
but less than two hundred and fifty thousand dollars,
(3)  One  hundred  dollars  if such net worth is two hundred and fifty
thousand dollars or more but less than one million dollars,
(4) Two hundred fifty dollars if such net worth is one million dollars
or more but less than ten million dollars,
(5) Seven hundred and fifty dollars if such net worth is  ten  million
dollars or more but less than fifty million dollars, and
(6)  One  thousand  five  hundred  dollars  if such net worth is fifty
million dollars or more.
(q) Any trustee shall be exempt from the annual reporting requirements
of this section by filing each year with the attorney general a verified
statement executed by such trustee  attesting  that  during  the  annual
reporting  period (1) the gross receipts received by said trustee during
such annual reporting period were less than twenty-five thousand dollars
and that (2) the total assets held by such trustee  at  no  time  during
such  annual reporting period exceeded twenty-five thousand dollars. For
the purposes of this paragraph, gross receipts mean the  total  received
during  the  financial  reporting  period  of  (A)  gifts,  grants,  and
contributions; (B) gross income and revenue from all  sources;  and  (C)
gross  amounts  from  sales  of  assets, other than inventory; and total
assets mean the total principal and the accumulated income, if any, held
by such trustee for purposes  of  charitable  distribution  on  any  day
during such annual reporting period.
(r)  A  trustee  who fails to comply with paragraph (d), (f) or (g) of
this section shall, after notice of said failure served upon him or  her
by  the attorney general by certified mail, return receipt requested, be

liable to the state of New York for a fine of ten dollars a day  not  to
exceed  one  thousand  dollars  for  each  failure  to  comply after the
expiration of the thirty day period following the receipt of the  notice
from  the  attorney  general,  except  that  the  time  to comply may be
extended by the attorney general. Where the attorney general, after such
thirty day period has expired, finds that the  failure  to  comply  with
paragraph  (d), (f) or (g) of this section is due to excusable ignorance
or inadvertence or other reasonable cause, the  attorney  general  shall
waive the fine imposed by this paragraph.
(s)  A trustee shall not be qualified to make application for funds or
grants or to receive such funds from any department  or  agency  of  the
state  without certifying compliance with paragraphs (d), (f) and (g) of
this section and all applicable registration and reporting  requirements
of article seven-A of the executive law.