Is naming co-trustees a good idea?

Asked by: Miss Hettie Spinka  |  Last update: March 5, 2025
Score: 4.3/5 (33 votes)

By leveraging the unique skills of each trustee, co-trusteeship can create a more thoughtful and well-rounded administration of your estate. These benefits, however, come with important caveats. Communication is critical in co-trusteeship.

What is a disadvantage of having co-trustees?

If you have an even number of Trustees, decisions can be impossible to make if the Trustees cannot agree. You can inadvertently cause conflict in the family if you appoint siblings or family members as co-Trustees. A professional and non-professional Trustee typically creates confusion and frustration.

What is the difference between trustees and co-trustees?

A co-trustee arrangement requires appointing two or more individuals or institutions to act together in managing the assets within your trust. A single trustee operates alone to oversee the trust.

Is it better to have one or two trustees?

There is no right answer to this question - it's a personal preference on your part. Some people feel the trust administration is simpler with one Successor Trustee. Others like the checks and balances that exist when you have two or more Successor Co-Trustees.

What happens if co-trustees disagree?

What happens if trustees disagree. In California, co-trustees in dispute can seek judicial assistance by filing a petition for instructions in Superior Court. This legal measure requests the judge to offer guidance on the conflict, helping to direct co-trustee actions according to the trust's terms and California law.

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What are the benefits of having a co-trustee?

One of the most significant advantages of naming co-trustees is the built-in system of checks and balances. With more than one trustee, you ensure that no single individual has unchecked control over your trust.

What makes a bad trustee?

Common Breaches of Trustee Duties in California. Too often, trustees breach their duties. Some of the most common ways they do this include breaches of trust, funds misappropriation, poor management, fraudulent acts, failure to act, and engagement with a competitor.

How much power does a co-trustee have?

A co-trustee is one of multiple trustees serving simultaneously, typically with equal powers and duties. They share the responsibility of managing the trust's assets. Sometimes, a co-trustee can temporarily step in if the primary trustee is unavailable, such as during an illness.

Should siblings be co-trustees?

On the surface, it may seem like the best way to protect their legacy is to keep trust management within the family. However, this plan may backfire due to practicality or family dynamics. Appointing two or more siblings as co-trustees could create logistical problems.

Is a trustee more powerful than an executor?

The answer to who holds more power depends largely on the context and specific circumstances of the estate or trust. Here's a summary to help clarify: Duration of Authority: Trustees often have ongoing responsibilities and powers that can extend indefinitely, while executors have a more limited, temporary role.

Who is the best person to manage a trust?

WHO IS THE “RIGHT” TRUSTEE? A natural first inclination is to consider a family member or trusted friend who knows you and your philosophies and values well. Family or friends may personally know your beneficiaries and their needs.

What happens when a co-trustee dies?

With a co-trustee arrangement, the remaining trustee typically continues managing the trust if the other one has died. They handle responsibilities like maintaining property, paying taxes and distributing assets per the instructions of the trust creator.

How many trustees can a family trust have?

It is possible to include either one corporate trustee or up to three individual trustees. A trustee can also be a beneficiary provided that it is not the sole trustee and beneficiary. If there is another trustee, or another beneficiary as well, then it is acceptable.

Can a co-trustee dissolve a trust?

During trust administration in California, a trustee may need to terminate the trust. To do so, adherence to California's probate and trust laws is crucial. Additionally, tax considerations play a vital role in the dissolution process.

Why a beneficiary should not be trustee?

Naming the same person as trustee and beneficiary can be problematic. Not only can it lead to a trustee and beneficiary conflict of interest, but it can make it difficult for the trustee to uphold their duty to treat all beneficiaries equally.

Who Cannot act as a trustee?

Anyone 16 and over (18 for an Unincorporated Association or Charitable Trust) who is not 'disqualified' can be a Trustee. The reasons for disqualification were set down by the Charities Act 2011, and were designed to prevent people convicted of financial crimes, or who made serious financial errors, becoming trustees.

What are the disadvantages of co-trustees?

Disagreements tend to end up in court with co-trustees suing each other. In addition, disagreements tend to disrupt the purpose of the trust. Lost time and cost over disagreements escalate tensions. Arguments and disagreements cause issues that the grantor wanted to avoid by appointing co-trustees.

How do you deal with a difficult co-trustee?

Steps to Follow with a Difficult Co-Trustee
  1. Step 1: Understand Your Duties as a Trustee. ...
  2. Step 2: Find a Trust Attorney to Advise You. ...
  3. Step 3: Try to Work Together. ...
  4. Step 4: Be Proactive in Going to Court, But Don't Overreach. ...
  5. Step 5: Consider Mediation. ...
  6. Step 6: Keep a Positive Attitude.

Can co-trustees sue each other?

And when co-trustees are appointed, trustees not only have the ability to contest certain aspects of a trust, they may have the duty to do so. Specifically, if one co-trustee concludes that the other co-trustee(s) are breaching their duties, they have the obligation to take legal action against their co-trustee.

Why have co-trustees?

The Pros of Naming Co-Trustees

Naming two people to maintain an estate plan can split the workload, which can make maintaining the assets easier and more effective. Having two trustees can also protect the beneficiaries' interests.

Can a co-trustee withdraw money from a trust?

Yes, a trustee in California can withdraw money from a trust, but only under certain conditions. The authority to withdraw and use trust funds must be in accordance with the terms of the trust document and California law.

What happens if a co-trustee becomes incapacitated?

At the point when an attorney or court determines that a Trustee is unable or unwilling to continue serving, it will be necessary for the Successor Trustee to accept their new role as fiduciary.

What cannot a trustee do?

A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.

Can a trustee steal money from a trust?

Under California law, embezzling trust funds or property valued at $950 or less is a misdemeanor offense and is punishable by up to 6 months in county jail. If a trustee embezzles more than $950 from the trust, they can be charged with felony embezzlement, which carries a sentence of up to 3 years in jail.

Who holds the real power in a trust, the trustee or the beneficiary?

This is a fundamental concept of trust law: the separation of legal and equitable title. In other words, while the trustee has the legal authority to manage and control the assets, they do so not for their own benefit, but for the beneficiaries.