Hess-Verdon & Associates

Co-trustee Disputes

When Trustee and Co-Trustee Dispute
Request a Case Review Today

 

Call us at 888-318-4430

Contact UsATTORNEY PROFILES

Co Trustee Disputes

The Pros and Cons of having co-trustees

As a Trustor, to limit trustee and co-trustee conflicts, perhaps it is essential to let the family know how you came up with a sole trustee’s decision. Having multiple trustees typically slows down the administration process and can inevitably stir rancor between the siblings and, ultimately, when co trustees disagree, a legal battle ensues. Finding a co-trustee attorney , i.e., a trustee attorney with deep court experience is essential to mitigate family conflicts.

 

 

Can a Co-Trustee Act Alone

As per probate code section 15620, unless otherwise provided in the trust instrument, a power vested in two or more trustees may only be exercised by their unanimous actions. If the co-trustees cannot decide, they can petition the courts (probate code 17200) to provide directions to the co-trustees.

Co Trustee Disputes

Trustee and Co-Trustee Problems and co trustee Disputes

HESS-VERDON – #1 SOUTHERN CALIFORNIA TRUST & ESTATE LAW FIRM

(DEEP BENCH COURT TIME)

Can a co-Trustee Act Alone

So, once again, can co-Trustees act independently.? No, unless the Trust explicitly states that to be the case.

Knowing this truth, hopefully, our guide can assist in making the right decision for all parties involved.

First, whether you are the Trustee or Co-Trustee, you need to stay “reasonable” throughout the estate administration process.

Trustee vs. Co-Trustee

The role of an administrator of the Trust is to administer and distribute the assets of a Trust. The prior definition is the simplest of descriptions, yet describes the essence of the fiduciary duties. As the term describes, you have a fiduciary duty to the beneficiaries, up-and-above the Trustee or Co-Trustee wants and desires. If the Co-Trustee, for example, sees the Trustee mishandling funds, it becomes a legal issue straightaway and legitimate concern.  

The concern is the following:

  1. Beneficiaries can petition the courts for the Trustee and Co-Trustee removal
  2. Beneficiaries can sue the Trustee and Co-Trustee civilly for any loss assets
  3. Beneficiaries can push if desired for criminal misappropriation of Trust funds, i.e., embezzlement.

If you have accepted the responsibility as a Successor Trustee, it behooves you to have a heart-to-heart with your co-Trustee to set the stage for a successful outcome. 

Finally, if the Beneficiaries feel there is a breach of fiduciary duty, they can petition the court to remove one or both Trustees.  

What are the Pros and Cons of co trustees?

The pros and cons of co-trustees are summed up as the following: The pros are more transparency to the trust administration process, but the cons may outweigh any pros because of the inherent issues of trustee and co-trustee disputes.

There is a mindset that states to “not” have more than one Trustee. For example, let’s say there are four co-Trustees, each one would have to agree on how to manage parts of the estate and should 1 disagree, the Trust Administration stops in its tracks. At this point, there is a Trustee to co-Trustee disputes, which lead to conflicts. 

Now, as a Trustor, it sounds fair to have all your children be part of the Trust Administration process, but you are setting them up for sibling rivalry. The best practice is to base your Successor Trustee against a standard of conduct they have lived, such as financial management, credit score, patience, and many other characteristics. Why? Even the best of Trustees will be challenged at some point in the Trust Administration process. Staying balanced, maintaining bookkeeping, make hard decisions, e.g., selling or buying assets, are all fundamental aspects of a Trustee.

What causes conflict between Trustee vs. Co-Trustee?

It’s quite simple, it’s the administration of the Trust assets. People see things differently, but one thing is for sure, staying compliant with the courts, staying transparent with the beneficiaries, and keeping them reasonably up-to-date is key to a success Trust Administration process. If the Trustees cannot come to a decision, one or both Trustees can petition the court.  

Having an experienced Trust Attorney who focuses on Trust Administration is highly advisable to ensure a quality outcome.

Trustee and Co-Trustee  

What are the pitfalls of setting up a Trust with more than one Trustee?

There is a mindset that states to “not” have more than one Trustee. For example, let’s say there are four co-Trustees, each one would have to agree on how to manage parts of the estate and should 1 disagree, the Trust Administration stops in its tracks. At this point, there is a Trustee to co-Trustee disputes, which lead to conflicts. 

Now, as a Trustor, it sounds fair to have all your children be part of the Trust Administration process, but you are setting them up for sibling rivalry. The best practice is to base your Successor Trustee against a standard of conduct they have lived, such as financial management, credit score, patience, and many other characteristics. Why? Even the best of Trustees will be challenged at some point in the Trust Administration process. Staying balanced, maintaining bookkeeping, make hard decisions, e.g., selling or buying assets, are all fundamental aspects of a Trustee.

What causes conflict between Trustee vs. Co-Trustee?

It’s quite simple, it’s the administration of the Trust assets. People see things differently, but one thing is for sure, staying compliant with the courts, staying transparent with the beneficiaries, and keeping them reasonably up-to-date is key to a success Trust Administration process. If the Trustees cannot come to a decision, one or both Trustees can petition the court.  

Having an experienced Trust Attorney who focuses on Trust Administration is highly advisable to ensure a quality outcome.

Meet Our Team

Trustee And Co Trustee Disputes, Problems &Amp; Expectations!
“Absolutely top notch firm for handling all your estate planning matters.”
Dean Williams

Client Since 1995

Trustee And Co Trustee Disputes, Problems &Amp; Expectations!
“Definitely a firm that will “fight to the finish.”
Frances Gruben

Client Since 2010

Trustee And Co Trustee Disputes, Problems &Amp; Expectations!
“I have been working with this firm since 1994; you can’t beat a firm like this, that is so ethical and competent.”
Dixie Fisher

Client Since 1994

Call Now