How Do Co-trustees Operate?

How Do Co-trustees Operate?

Unless the trust provides otherwise, co-trustees must act unanimously. However, the trust can allocate powers unequally between co-trustees. 

And, in limited circumstances if a co-trustee is unavailable, the remaining co-trustees may act. 

If the co-trustees are stalemated on a decision, one or more of the co-trustees can file a court petition for instructions. 

A co-trustee can be liable for a breach of duty by a co-trustee. Thus, if a co-trustee takes an action that the other co-trustee believes is a breach of duty, the non-breaching co-trustee should consider filing a court petition with the Probate Court.

Hostility between co-trustees can be a ground for removal of a trustee. In some circumstances, a co-trustee might be allowed to resign if there are disputes with the other co-trustee; but, if the resignation allows the other co-trustee to commit an anticipated breach, the resignation itself could be considered a breach of duty to protect the trust.

Click here to learn about breach of fiduciary duty and financial mismanagement.