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Appointment Of Co-Trustee Form
A trustee is the legal owner of the Trust. Trustees are responsible for administering the Trust as it is written. In the case of co-trustees, the State of California requires that all administrative decisions are unanimous between the co-trustees.
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Appointment Of Co-Trustee Form
Notification And Communication
The trustee is responsible for notifying the beneficiaries that they are going to inherit. Part of this notification includes sending each beneficiary a copy of the final Trust complete with all amendments. During the trust administration process, the trustee needs to keep an open and consistent communication line with the beneficiaries.
Inventory Of Assets
All assets in the estate need to be inventoried and evaluated. The trustee is responsible for consulting with professional estimators, brokers, and other experts to obtain each asset’s value.
All monies associated with the estate should be placed in a bank account. This account needs to be interest bearing. The trust account is used to pay attorneys, court fees, creditors, and finally, the beneficiaries. The trust account is also used to pay the trustees the compensation they are due. The funds should never be combined with personal funds belonging to the trustee.
Liquidation Of Assets
Certain estate assets are to be liquidated, and the proceeds are deposited into the trust account. Some investments will take longer to liquidate than others. A piece of real property will take longer to liquidate than stocks and bonds.
All creditors to the estate should be identified, and all debts paid. There can be no other disbursement to the beneficiaries until all creditors are paid off. This includes all taxes that are due on the estate.
The trustee is responsible for submitting an accounting report to the appropriate courts. In addition to the courts, the beneficiaries should also receive an accounting of the estate’s contents.
Disbursement Of Funds
The trustee is responsible for disbursing funds to the beneficiaries in a timely manner. If the disbursement appears to be taking too long, the beneficiaries can contest the trustee’s actions. Once the final distribution of funds is complete, the trustee is responsible for closing the Trust.
Process Of Appointing Co-Trustees
The grantor usually designates their choice of trustees in the trust document. If the trustee initially cannot serve, then the courts or beneficiaries are responsible for adding a co-trustee to a trust. If the trust names more than one trustee, each co-trustee should complete forms for the courts. At the beginning of the process, the trustees should sign an Acceptance of Appointment of New Trustee Form. If a co-trustee’s addition changes the initially specified trustee, then a Change of Trustee Form should be submitted to the courts.
Potential Issues Of Co-Trustees
When more than one trustee exists in administering the Trust, the co-trustees will need to be unanimous in all administration decisions.
Co trustee requirements include:
All co-trustees should participate equally in the administration of the Trust. Duties may be divided between them, but all decisions should have unanimous consent. If one of the co-trustees is seen as being derelict in their duties, the other trustee can petition the courts to remove their trustee status. Likewise, if the beneficiaries believe that one co-trustee is failing to do their fiduciary duty, they can also petition the courts for removal.
Each of the co-trustees is responsible for preventing other co-trustees from committing a breach of Trust. If one trustee commits a breach, it is the other trustees’ responsibility to compel the guilty party to fix the situation.
Conflicts Between Trustees
Occasionally, co-trustees will disagree on administration issues with the Trust. If allowed to proceed, conflicts of this type can delay the required timely disbursement of funds. If the dispute cannot be settled between the co-trustees, specific conflict resolution steps can be taken.
If the co-trustees cannot come to a unanimous decision during the administration process, they can ask for the appropriate courts’ assistance. The co-trustees can file a Petition of Instruction to the courts asking for guidance. The judge can then help the trustees decide which actions are in the best interest of the Trust.
Petition For Trustee Removal
If the co-trustees’ issues become insurmountable, the co-trustee or the beneficiaries can file a Petition for Trustee Removal with the courts. Since removal is not an easy task, there should be evidence for the courts to review. A removal hearing will not only allow for evidence to be presented; it will also enable the co-trustee to respond to the information demonstrated.
Seeking Legal Counsel
If you need help adding a co-trustee to a trust, completing a change of trustee form, completing an appointment of a new trustee form, or any other trust administration issues, contact one of our top trust attorneys for guidance. If you face the removal of a trustee or need help filing a Petition of Instruction, our top trust attorneys can guide you through the process.
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