What is a Surcharge?

A surcharge is a legal action brought in Orphans' Court to hold a fiduciary (executor, administrator, trustee, guardian, or agent) personally liable for losses caused by their breach of fiduciary duty.

When Surcharge Applies

A surcharge action can be brought when a fiduciary:

• Mismanages or wastes estate assets
• Makes distributions to wrong beneficiaries
• Fails to invest prudently (for a trustee or guardian, the Prudent Investor Rule, 20 Pa.C.S. § 7203; a personal representative's investment authority instead comes from 20 Pa.C.S. § 3316, which imposes no duty to invest and restricts what may be bought)
• Self-deals or engages in conflicts of interest
• Unreasonably delays administration
• Fails to account for estate assets
• Takes excessive compensation
• Fails to pay taxes resulting in penalties and interest

How Surcharge Works

Surcharge is typically raised as an objection to the fiduciary's accounting. When the fiduciary files their accounting with the Orphans' Court, any interested party may file objections claiming the fiduciary should be surcharged for specific actions or failures.

The surcharge remedy means the fiduciary must repay the estate from their own personal funds for any losses caused by their breach. It is a powerful deterrent against misconduct.

The standard is whether the fiduciary acted as a "prudent person" would under the circumstances. Good faith alone is not a defense if the conduct was objectively unreasonable.

Key Surcharge Authority

In re Estate of Lux , 389 A.2d 1053 (Pa. 1978). The Pennsylvania Supreme Court's foundational statement of surcharge and fiduciary duty principles. Lux confirms that the party seeking the surcharge bears the burden of proving the fiduciary's breach and the resulting loss to the estate. This is the case courts start with in any surcharge analysis.

In re Estate of Geniviva , 675 A.2d 306 (Pa. Super. 1996). Applies the prudent-fiduciary standard of In re Estate of Lohm , 269 A.2d 451 (Pa. 1970), to an executor surcharged for late inventory, accounting, and tax filings that resulted in interest and penalties, and for failure to timely liquidate securities. The court rejected the executor's "reliance on advice of counsel" defense and reduced the executor's commission. The opinion also states the burden rule: those seeking the surcharge bear the burden of proving the executor's wrongdoing, but where a significant discrepancy appears on the face of the record, the burden shifts to the executor to present exculpatory evidence and avoid the surcharge. This case is particularly useful where the executor's delays and tax-filing failures have caused measurable loss to the estate.

Legal and factual content on this page was last verified: Aug. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.