(916) 775-8542 What Are The Responsibilities Of A Co-Trustee?
Understanding the responsibilities of a co-trustee may be challenging, especially when you are newly appointed. The grantor chose you for a reason, and it is important that you fulfill your role while acting in the beneficiaries’ best interests.
Stick with us as we detail common responsibilities of a co-trustee so you are better equipped to uphold your fiduciary duties. Keep reading to find out more about your expected duties and what to do if you suspect a co-trustee is self-dealing.
What Are the Core Duties and Responsibilities of a Co-Trustee?
Co-trustees are expected to actively participate in the administration of the trust and cannot delegate their duties or simply “sit back” while others shoulder this responsibility. Because the state of California practices default unanimity, without specific trust language, decisions such as selling property or hiring an attorney require unanimous agreement among all co-trustees.
These individuals would work together to properly manage trust property, including real estate holdings, businesses, and investments. Another crucial administrative duty of co-trustees is financial record-keeping and filing necessary trust tax returns.
Do Co-Trustees Have a Responsibility to Beneficiaries?
A trust’s beneficiaries are a primary focus of co-trustees, as they have a strict legal duty to act in the heirs’ best interests. This role requires impartiality and the ability to treat beneficiaries fairly. These individuals have rights, including the right to information and accounting, and they are legally permitted to take action if co-trustees fail to uphold these responsibilities. So in addition to protecting investments and paying taxes, co-trustees must communicate with beneficiaries about the trust’s status, assets, and expenses.
How to Protect Yourself as a Co-Trustee
As a co-trustee, you have a high legal obligation to act solely in the best interests of the trust’s beneficiaries. This is why it is crucial that you ensure all of your actions meet the highest legal standards to avoid potential liability. This role requires prudent management, loyalty, and care, and while all co-trustees are jointly responsible for administering the trust, they could be held liable for breaches, even those by another co-trustee.
In California, you have a duty to intervene and take reasonable steps to stop a co-trustee from breaching the trust. That is why it is crucial to document dissent and take action to prevent harm. Always keep detailed records of all decisions and points of disagreement. Remember to address your concerns with other co-trustees right away, especially if you suspect self-dealing, such as borrowing from or gifting trust funds, using their power for personal benefit, or intentionally delaying necessary actions.
Have Questions About The Responsibilities of a Co-Trustee? Contact Us Today
Hackard Law is your go-to firm for high-stakes estate and co-trustee disputes when you do not know who to turn to. We have a dozen locations across California to better serve our community with empathy and care.
Reach out to us today to learn more about the responsibilities of a co-trustee and let us earn your trust as we have with all of our satisfied clients. We handle estate and trust litigation on a contingency-fee basis, so if we fall short, there is no fee for our services.