(916) 775-8542 Do Co-Trustees Have to Act Jointly?
A co-trustee is one of two or more people (or entities) who jointly manage a trust. These individuals have certain responsibilities, such as investing assets, paying bills, and distributing funds, and must always act in the beneficiaries’ best interests.
But do co-trustees have to act jointly or are they permitted to make unilateral decisions? The attorneys at Hackard Law explore this topic to give beneficiaries and co-trustees a better understanding of whether or not they have to work together and under what circumstances.
Unanimity Is the General Rule In California
Co-trustees generally must act jointly and make unanimous decisions, especially for major actions. California’s probate court usually requires co-trustees to agree on everything before making decisions that affect beneficiaries. So if the trust documents give all co-trustees equal power and responsibility, no single trustee can act alone.
What Types of Matters Require Co-Trustees to Unanimously Agree?
There are five major areas where co-trustees must agree, including hiring professionals, such as real estate agents, accountants, or attorneys for trust business. An agreement on controlling, selling, or investing trust property, as well as deciding on payments or distributions to beneficiaries. Together, co-trustees also have to act jointly to maintain accurate trust records and accounts, prepare and file tax returns, and pay debts owed to creditors.
When the Trust Document Matters
While unanimity is generally the rule for co-trustees in California, the trust document may state otherwise and allow for majority rule or independent action. The grantor may choose to specify rules for decision-making to prevent deadlocks and to permit individual trustees to act separately for certain tasks.
Providing one trustee with allocated powers could create complexities and may be frowned upon by financial institutions in certain circumstances. For that reason, careful drafting of the trust’s provisions is crucial; otherwise, disagreements may bring its administration to a halt. After all, co-trustees are typically jointly liable for breaches of trust, so working together and ensuring proper procedures are generally the best course of action.
Find Out if Co-Trustees Really Do Have to Act Jointly in Your Case
Most trust documents specify that co-trustees have to act jointly. However, each one is set up differently based on factors like purpose, flexibility, and structure. So, do not risk your high-stakes estate and trust disputes to inexperienced attorneys.
Hackard Law is the firm you should lean on. When you have questions about your responsibilities or if you are in a dispute with a co-trustee, turn to us for guidance. If we do not win your case, you will not receive a bill from us.