Establishing a trust is a powerful tool for managing assets and ensuring your wishes are carried out, but the structure of its administration—particularly when multiple trustees are involved—requires careful consideration; requiring unanimous consent for co-trustees appears straightforward, but it can quickly lead to impasses and undermine the trust’s purpose if not carefully implemented. A trust document can certainly *require* unanimous consent, however, it’s crucial to understand the potential ramifications and include mechanisms to break ties or empower a successor trustee in the event of deadlock.
What happens if my co-trustees disagree?
Disagreements among co-trustees are surprisingly common—often stemming from differing investment philosophies, conflicting interpretations of the trust document, or even personal conflicts; according to a recent survey by the American College of Trust and Estate Counsel (ACTEC), approximately 30% of trust disputes involve disagreements between co-trustees. Requiring unanimity exacerbates these issues, potentially paralyzing the trust’s administration; imagine a scenario where one trustee wants to sell a property to address immediate financial needs, while the other vehemently opposes it, believing it’s a long-term asset. With a unanimity requirement, no action can be taken, leaving the trust stagnant and potentially losing out on opportunities. This isn’t merely hypothetical; Steve Bliss has encountered numerous situations where unanimous consent provisions have created significant roadblocks, delaying distributions or hindering necessary investment adjustments.
Is a tie-breaking trustee a good idea?
One common solution to the unanimous consent problem is designating a tie-breaking trustee; this individual, often a neutral third party like an attorney or financial advisor, is empowered to cast the deciding vote when co-trustees reach an impasse. This ensures that decisions can still be made, even in the face of disagreement; however, it’s vital to carefully select the tie-breaking trustee. Their fees, potential biases, and familiarity with the trust’s assets and beneficiaries should be thoroughly vetted. I recall a situation where a family appointed a well-meaning, but financially unsophisticated, friend as their tie-breaking trustee; when faced with a complex investment decision, the friend defaulted to the safest option, resulting in significantly lower returns for the beneficiaries. It’s crucial that the tie-breaking trustee possess the necessary expertise to make informed decisions in line with the trust’s objectives.
What if my co-trustees simply can’t work together?
Sometimes, the problem isn’t just disagreement, but a fundamental inability of the co-trustees to collaborate; personal animosity or vastly different management styles can create an environment of constant conflict, making it impossible to administer the trust effectively. In such cases, the trust document should include provisions for removing a trustee for cause or allowing beneficiaries to petition the court for removal. In California, Probate Code section 16240 outlines the grounds for trustee removal, including breach of duty, mismanagement of trust property, and lack of cooperation. Steve Bliss remembers a particularly challenging case involving two siblings appointed as co-trustees; their longstanding rivalry quickly poisoned the trust administration, leading to constant accusations and legal battles. Ultimately, the court had to intervene and appoint a professional trustee to salvage the situation, incurring significant legal fees and emotional distress for the beneficiaries. A well-drafted trust document should anticipate such issues and provide clear mechanisms for addressing them.
How can I prevent problems with co-trustees in the first place?
The best approach is preventative—careful selection of co-trustees and a clearly worded trust document can minimize the risk of disputes. Choose individuals who are responsible, trustworthy, and share a common understanding of your wishes; consider their financial literacy, investment experience, and ability to work collaboratively. A trust document should clearly define the scope of the trustees’ powers, their decision-making process, and procedures for resolving disagreements. I once worked with a client who appointed their two adult children as co-trustees, but stipulated in the trust document that they were required to consult with a financial advisor on any investment decisions exceeding a certain amount. This provided a valuable layer of oversight and helped prevent impulsive or ill-advised decisions. Steve Bliss consistently advises clients to think carefully about the dynamics of their chosen co-trustees and to anticipate potential conflicts before they arise. It’s far easier to prevent problems than to fix them after they’ve already damaged the trust’s administration and strained family relationships.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- estate planning
- bankruptcy attorney
- wills
- family trust
- irrevocable trust
- living trust
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “What happens to my debts when I die?” Or “What are common mistakes people make during probate?” or “What’s the difference between a living trust and a testamentary trust? and even: “How does bankruptcy affect my credit score?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.