What happens if co-trustees disagree?

What happens if co-trustees disagree?

Under California Probate Code section 15642, if hostility or lack of cooperation among family member co-trustees impairs trust administration to the detriment of the beneficiaries, the court can end the gridlock by removing all of the co-trustees and appointing a third party to serve as sole successor trustee.

What power does a co trustee have?

When there are multiple trustees appointed to manage a trust, they are called co-trustees. A trustee manages and administers a trust, including selling and distributing trust property, and filing taxes for trust income when necessary.

Do co-trustees have to act jointly?

Trusts in California can have multiple trustees, not limited to merely two. California trust law requires that co-trustees act unanimously. If the trust instrument provides that co-trustees do not have to act unanimously, the instrument controls.

How much should a trustee pay themselves?

Most corporate Trustees will receive between 1% to 2%of the Trust assets. For example, a Trust that is valued at $10 million, will pay $100,000 to $200,000 annually as Trustee fees. This is routine in the industry and accepted practice in the view of most California courts.

Is it good to have co-trustees?

When you have co-executors or co-trustees appointed, these tasks can be assigned to each person to lessen the burden of the many duties and responsibilities that each has. Each may bring different skills to the table, and that can lead to better decisions. On the downside, naming them together won’t improve things.

Are co-trustees a good idea?

Appointing co-trustees may seem like a good choice for many reasons. For example: Having two trustees can act as a safeguard, since there is a second person with access to records and responsibility for management and monitoring. In theory, having two trustees reduces the burden on each, since the work is shared.

How many trustees should a trust have?

A trust is a legal document that governs how the grantor’s assets pass to the named beneficiaries upon the grantor’s death. When a grantor establishes a trust, a single trustee manages the trust’s assets on behalf of the named beneficiaries. However, there is no requirement for a trust to have only one trustee.

Should a trustee be paid?

Many trustees do, and it’s certainly appropriate to be paid for the real work that comes with serving as a trustee. Handling other people’s money is a serious responsibility. There are, however, some circumstances in which you might want to choose to forgo compensation.

Can a trustee take all the money?

A trustee typically cannot take any funds from the trust for him/her/itself — although they may receive a stipend in the form of a trustee fee for the time and efforts associated with managing the trust.

How many trustees should a will have?

Ordinarily, a maximum of four Trustees can be appointed. A single Trustee can be appointed but it is usually recommended that you appoint at least two.

Should I have a co trustee?

A trusteeship is best handled by one person being in charge. Also, the beneficiaries would have only one trustee to blame if there is a problem in the administration. We recommend that you name two successor trustees, but not co-trustees. One to be in charge and the other as a backup.

Can a co-trustee act independently of a trust?

Co-Trustees Acting Independently Because of this growing problem, we are now recommending that trusts naming co-trustees state that the co-trustees can act independently (i.e., act alone and without both signatures).

What are the common problems associated with co-trustees?

One common problem associated with co-trustees is if the two trustees have to act jointly with each other, meaning they need to sign deeds, checks, and other financial documents together. This can slow down the process, especially if one or both trustees do not live near one another or are not communicating with each other.

What are the duties of a co-trustee on taxes?

For example, certain assets held in trust may be subject to estate taxes as well as income taxes. It is the duty of a co-trustee to file tax returns with the Internal Revenue Service (IRS) and state tax agency, if necessary, and pay any taxes due out of the trust.

Should co-trustees be assigned equal authority and responsibility?

However, if co-trustees are assigned equal authority and responsibility in the trust agreement, some third-party intervention will be needed, and that can get costly.