When you create a trust, one of the most important decisions you make is who will manage it. The trustee’s job is to carry out your instructions, safeguard assets, and make decisions in the best interest of your beneficiaries.
In some cases, you may consider naming more than one person to serve in this role. These individuals are called co-trustees.
Naming co-trustees may sound like a practical way to share responsibility and reduce risk, but it is not the right choice for every situation. Before you add more than one trustee to your estate plan, it helps to understand how co-trustees work and what problems could arise.
What Co-Trustees Are and How They Work
Co-trustees are two or more individuals who share equal authority over the trust. Unless you say otherwise in your trust agreement, each trustee must participate in decisions about how to manage and distribute trust assets. In other words, no single trustee can act alone.
This arrangement requires strong communication, shared values, and a commitment to working together. If the co-trustees disagree or cannot cooperate, the administration of your trust could be delayed or disrupted.
New York law generally assumes that co-trustees must act unanimously unless your trust says otherwise. That means every decision, from paying bills to approving distributions, must be made jointly.
Why You Might Want to Name Co-Trustees
There are good reasons to appoint co-trustees in certain situations. One common reason is to avoid favoritism.
If you have multiple children and name only one as trustee, others might feel left out or suspicious of the process. Naming co-trustees can promote transparency and reduce the chance of disputes.
Another reason is to balance different strengths. For example, one trustee might have financial expertise while the other knows your family dynamics. Together, they can manage the trust more effectively than either one alone.
You might also consider naming a family member and a professional trustee together. In this setup, the family member brings personal insight while the professional offers legal and administrative skills.
Potential Drawbacks of Co-Trusteeship
While co-trusteeship has benefits, it also comes with challenges. The biggest issue is the need for collaboration. Co-trustees must agree on decisions, which can lead to delays if there is a disagreement.
Even simple tasks like selling a property or investing funds may take longer when multiple people must review and sign off.
Another risk is the potential for conflict. If co-trustees do not get along or have different priorities, the trust could become stalled. In some cases, the dispute may lead to court involvement, which increases legal costs and creates stress for your beneficiaries.
Geographic distance can also complicate matters. If one trustee lives in Manhattan and the other lives out of state, coordinating signatures and communication may slow down the administration.
How New York Law Treats Co-Trustees
Under New York Estates, Powers and Trusts Law (EPTL), co-trustees are expected to act together unless the trust agreement provides otherwise.
That means both must participate in major decisions and sign documents unless you include language allowing one trustee to act independently.
If you want one co-trustee to have more authority or act alone in certain situations, your attorney can include that in the trust. For example, your trust can allow one trustee to act in an emergency or give one co-trustee the final say if there is a disagreement.
These provisions must be drafted carefully to avoid confusion and potential legal challenges.
Tips for Choosing the Right Co-Trustees
If you are thinking about naming co-trustees, choose people who communicate well and respect each other. They do not have to agree on everything, but they should be able to collaborate and carry out your wishes without constant conflict.
Look for individuals with the time, skills, and interest to handle trust administration. If one person is detail-oriented and organized, that can help balance out someone who is more relational but less experienced.
Avoid naming people who have a history of personal tension or have been on opposite sides of family issues. Also consider the physical location of your trustees, especially if any in-person duties are required.
Consider a Professional Co-Trustee
In more complex or high-value estates, it may make sense to name a professional co-trustee. This can be a trust company, a lawyer, or another qualified fiduciary.
A professional brings experience, neutrality, and a structured process. They can also help with recordkeeping, taxes, and investment management. This arrangement can work well when you want to involve a family member without placing the full burden on them.
Keep in mind that professional trustees charge fees, but those costs may be worthwhile if they help prevent costly mistakes or family disputes.
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