Co-trustees, while intended to provide balanced oversight of a trust, can unfortunately become sources of conflict, potentially harming the beneficiaries and diminishing the trust’s value. According to a recent study by the American College of Trust and Estate Counsel (ACTEC), approximately 30% of trust disputes involve disagreements between co-trustees. These disputes can range from minor disagreements about investment strategies to major conflicts regarding distributions or trust administration. Proactive planning, however, can significantly mitigate these risks and ensure a smoother administration process.
What powers should I give my co-trustees?
Clearly defined powers within the trust document are paramount. Often, conflicts arise from ambiguity regarding decision-making authority. A well-drafted trust should specify which decisions require unanimous consent, and which can be made by a majority or individual trustee. For example, investment decisions exceeding a certain dollar amount ($50,000 perhaps) might require unanimous approval, while routine expenses can be authorized by a single trustee. This delineation prevents one trustee from unilaterally making significant changes without input from the other. Furthermore, establishing a clear process for resolving disagreements – such as mediation or arbitration – can save time and legal fees later on.
Should I name a trust protector?
Consider naming a trust protector – an independent third party with the authority to resolve disputes between co-trustees. This individual doesn’t participate in day-to-day administration but serves as a tie-breaker or mediator when conflicts arise. A trust protector could be an attorney, accountant, or a trusted family friend with financial expertise. They are given the power to remove and replace a co-trustee if needed, adding another layer of security. The cost of a trust protector’s services typically ranges from $500 to $2,000 per year, but this cost is often far less than the expenses associated with litigation.
What if my co-trustees don’t get along?
I once worked with a family where two siblings, named as co-trustees for their elderly mother’s trust, had a long-standing and bitter rivalry. They immediately began to clash over every decision, from selling the family home to approving routine medical expenses. The trust, intended to provide for their mother’s care, became a source of constant stress and conflict. Ultimately, the beneficiaries suffered as essential needs were delayed due to their arguing. It was a painful reminder that simply naming co-trustees doesn’t guarantee a harmonious administration.
Can good communication prevent trustee disputes?
The key to avoiding such scenarios lies in open communication and a shared understanding of responsibilities. I recently helped a client, Sarah, who carefully selected her two adult children as co-trustees. She didn’t just name them; she held regular family meetings to discuss her wishes and expectations. She encouraged them to openly communicate and respect each other’s opinions. More importantly, she stipulated in the trust document that all major decisions required their unanimous consent, with a provision for mediation if they reached an impasse. Years later, after her passing, her children successfully co-administered the trust, preserving not only the financial assets but also their close sibling relationship. This success stemmed from Sarah’s foresight and her emphasis on clear communication and shared decision-making. It’s a powerful example of how proactive planning can turn potential conflict into a harmonious administration, benefiting everyone involved.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar 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 Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
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● Probate Law: Efficiently navigate the court process.
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● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
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Map To Steve Bliss Law in Temecula:
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Feel free to ask Attorney Steve Bliss about: “What professionals should be part of my estate planning team?” Or “How does the probate process work?” or “Can I include my business in a living trust? and even: “What property is considered exempt in bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.