Being a trustee is a serious responsibility. While having a co-trustee can mean having the skills and support of another individual as you complete the necessary tasks, when disagreements arise, being a trustee can become more challenging. If you are considering having co-trustees or are a co-trustee who wants to understand your rights, it is wise to consult with a trust attorney.
Common Types of Disagreements Between Co-Trustees
Co-trustees, however well-intentioned, sometimes have conflicting points of view concerning:
Financial Decisions
Money can cause conflict between co-trustees who are, after all, charged with making financial decisions on an ongoing basis. Co-trustees may disagree about investment strategies, whether property should be sold, and how trust assets should be distributed to beneficiaries.
Interpretation of Trust Provisions
If the terms of the trust document are not clear, they can be open to various interpretations. Only a single ambiguous word or clause can cause confusion which leads to conflict. Unfortunately, seemingly minor differences in meaning can substantially impact the management of the trust.
How the Trust Funds Should Be Distributed to the Beneficiaries
In many cases, the beliefs and priorities of the co-trustees are at odds, giving rise to disagreements about how the interests of the trust’s beneficiaries can best be served. For example, one person may believe that everyone has a right to higher education and the other may be committed to the idea that a young person should prove their responsibility by earning a living before receiving the benefit of a college degree.
General Management of the Trust
It is always challenging to have two different individuals running the show. There may be quarrels about which experts (e.g. accountants, realtors) to consult or about how frequently or in how much detail the trustees should report to the beneficiaries.
How Disagreements Can Be Successfully Resolved
Although trust disagreements cannot always be avoided, there are, thankfully, several ways they can be settled. These include:
Honest Communication
In many cases, an open and thoughtful conversation is all that is necessary. By taking a few steps back, each party can explain their point of view and listen carefully to the other person’s reasoning. Calm discussion can often lead to a diplomatic compromise.
Consulting the Trust Document
Ultimately, the trust document should guide both trustees’ actions. Questions either party has about the grantor’s view can usually be answered by paying close attention to the precise wording of the trust.
Seeking Professional Advice
Obtaining advice from professionals like estate planning attorneys, financial advisors, or accountants can shed light on the disagreement. Their objective viewpoints can provide valuable insights and may assist in reaching a consensus.
Engaging in Mediation
If disagreements persist, mediation by a skilled professional can be very helpful. Having a neutral third party experienced in this method of resolution can make a world of difference. Sometimes just hearing another person rephrase the two sides of the argument can make working toward a mutually agreeable solution simpler.
Litigation
Because both co-trustees will continue to work together, court intervention should be a last resort. It is likely to make the disagreement more contentious, expensive, time-consuming, and public than it would otherwise be.
Contact Our Talented Trust Attorneys Today
Having co-trustees disagree usually works against the grantor’s wishes and the beneficiary’s best interests by slowing down the process of asset distribution and/or asset growth. If you are a co-trustee who wants to understand your rights or are considering having co-trustees in your trust, get in touch with our capable attorneys today.
Please note that our office does not engage in contested matters. However, we are happy to provide referrals to firms that are skilled in dealing with such matters. In helping our clients craft their estate plans, our goal is to structure a plan that helps to avoid such issues.