Duration of trust for benefit of creditors · as in force on May 31, 2026
§ 7-1.8 Duration of trust for benefit of creditors
(a) Where an estate in real property has heretofore vested or shall hereafter vest in an assignee or other trustee for the benefit of creditors, it shall cease at the expiration of ten years from the time the trust was created, except where a different limitation is contained in the instrument creating the trust or is otherwise prescribed by law. Such estate shall thereupon revert to the assignor.
(b) This section does not apply to a trust of personal property or to a trust of real property created in connection with the salvaging of mortgage participation certificates. Nor does this section affect any rights to the proceeds of a sale of real property made by the assignee or other trustee for the benefit of creditors.
A real-property estate vested in a trustee for creditors normally ends 10 years after the trust was created and reverts to the assignor, unless the instrument or law sets another limit. ★ The rule excludes personal-property trusts, specified mortgage-certificate salvage trusts, and rights to proceeds from trustee sales.
Marked in the text: penalties, time limits, sums of money. Editorial emphasis added by this edition; it does not appear in the statute as enacted.
This provision appears in Volume 1 — The Surrogate's Court in Plain English; Volume 3 — The Surrogate's Court: Court Rules & the EPTL; Volume 5 — Your Career: Surrogate's Court in Plain English.