Often, we meet with clients who want to create a trust or a last will and testament and request that all of their children be named as co-trustees or co-personal representatives (formerly known as executors). The client will say something like, “I want all of my children to serve together.” When we hear this from a client, we hope that these clients are lucky enough to have children that they trust so much to handle the job together. Regretfully though, oftentimes, naming co-decision-makers can create challenges.
Here are some risks to consider when naming co-trustees or co-personal representatives.
The disadvantages of appointing co-decision makers
Delay.
Having two individuals named could cause delay. Imagine a situation where every transaction requires two signatures. Then compound that with the need to move quickly in certain situations such as when we are trying to qualify someone for a government benefit program or perhaps the individual is on their death bed and we’re looking to try to avoid probate.
Risk of stalemate.
Two children are appointed with equal power to act on behalf of the trust/estate. Inevitably, at some point they are going to disagree. What happens when they disagree? Sometimes they can work out their disagreement, but other times, it results in a stalemate and possibly lawsuits.
Financial institutions don’t like co-trustees/co-personal representatives.
We have had situations arise where the two children try to open a trust/estate bank account. This required both children to go to the bank together (taking time from work and their families) to establish this account.
Distance and logistics.
In today’s society, children tend to live and move all over the country or even the world. This can make things difficult when both children need to show up at the bank, the court or the attorney’s office to get matters handled. Imagine the difficulty in the coordination and logistics of two working person’s schedules in this day and age.
The advantages of appointing co-decision makers.
When you choose two individuals, acting unanimously, as co-trustees of the trust or co-PRs of an estate. The advantage of having more than one decision-maker allows for checks and balances regarding administration. When you choose more than one person to fulfill the duties, this is a way to possibly ensure that one person has legal or financial expertise and one is close to the family. This way it may be possible to divide responsibilities so that each is able to optimize their strengths and schedules.
For married couples with blended families, when one spouse passes away, it is sometimes effective for the surviving spouse to serve as a co-trustee with a step-child to ensure the deceased spouse children’s beneficial interests are protected.
Tips to ensure family harmony
No matter who you choose as your trustee, here are a few tips to avoid frustration and disagreement among family members during your incapacity or death:
- Talk to your children about your estate plan. It may be a difficult discussion to have, but you need to have it. If you find it too difficult, enlist the help of your estate planning attorney to go over the details of your estate plan with your children and answer their questions.
- Write a letter of instruction to your children. Having these discussions in person can be difficult. A letter can help you relay about your wishes and detail the overall plan.
- Considerproviding a copy or summary of your estate planning documents. A summary letter of your estate plan excluding any actual dollar amounts might be helpful.
As you can see maintaining family harmony and selecting the appropriate person to serve as your trustee or personal representative is difficult. The best way to ensure your estate plan doesn’t lead to a family feud is to meet with us for a consultation, where we can identify the best strategies for you to provide for and protect your loved ones. To learn more about how to select a fiduciary, call our office today at 508-994-5200.
©Surprenant & Beneski, P.C. 35 Arnold Street, New Bedford, MA 02740, 336 South Street, Hyannis MA 02601 and 45 Bristol Drive, Easton MA 02375. This article is for illustration purposes only. This handout does not constitute legal advice. There is no attorney/client relationship created with Surprenant & Beneski, P.C. by this article. DO NOT make decisions based upon information in this handout. Every family is unique and legal advice can only be given after an individual consultation with an elder law attorney. Any decisions made without proper legal advice may cause significant legal and financial problems.