Why is it Better to Have One Trustee?
Sometimes the most difficult part of creating a trust is not deciding what should happen to your assets, it is deciding who should be responsible for carrying out those instructions. If more than one person comes to mind, you may wonder whether naming co-trustees is a good idea.
While co-trustees may appear to work very well in some situations, they are usually not the right choice for every trust.
There are several reasons someone might decide to appoint co-trustees. Parents may want two adult children to share the responsibility equally, particularly if they have different strengths and a history of working well together. In other situations, a family member may serve alongside a professional or corporate trustee, allowing one person to contribute personal knowledge of the family while the other provides experience with trust administration and investment management.
For some families, having two trustees may appear to provide an added level of oversight. Significant decisions should be made together, which can seemingly offer reassurance that multiple perspectives are being considered before important actions are taken. The thought is that sharing the responsibility can also reduce the burden that might otherwise fall on a single individual.
However, appointing co-trustees is not simply about choosing two people you trust. It also requires choosing two people who can always work well together. Trustees have fiduciary duties to act in the best interests of the beneficiaries and to administer the trust according to its terms. If communication is difficult or fails, decisions are frequently delayed, or disagreements become common, administering the trust may become more challenging than intended and may instead complicate it to such a degree the documents end up in court.
Before naming co-trustees, it is worth thinking beyond qualifications alone. Do these individuals communicate respectfully? Can they make thoughtful decisions together? Will they approach disagreements with a willingness to find practical solutions? A strong personal relationship does not always translate into an effective working relationship.
Practical considerations also matter. Co-trustees who live in different states, have demanding careers, or maintain very different schedules may find it more difficult to coordinate meetings, review documents, or respond quickly when trust decisions need to be made. While technology has made communication easier, administering a trust still requires time, attention, and cooperation.
Naming a single trustee with one or more successor trustees is the simpler and safer approach.
Experience has also shown that co-Trustees frequently create uncertainty for third parties. Banks, brokerage firms, title companies, accountants, and other professionals often require both Trustees to sign documents or authorize transactions even if the documents state otherwise. If one Trustee is traveling, unavailable, ill, or simply slow to respond, important financial or legal matters may come to a standstill.
Perhaps even more importantly, co-Trustees can unintentionally strain family relationships. A disagreement that might otherwise be resolved privately can become a source of lasting conflict when each Trustee believes they are fulfilling the wishes of the person who created the trust. Beneficiaries may perceive one Trustee as being more reasonable than the other, leading to accusations of favoritism or alliances that divide the family. In many administrations’ disagreements between co-Trustees, not the trust itself, became the greatest obstacle to completing the administration efficiently.
If a client wishes to provide oversight or continuity, we recommend naming two or more successor Trustees rather than requiring multiple individuals to serve simultaneously. Successor Trustees provide an excellent safeguard should the primary Trustee become unable or unwilling to serve, without creating the administrative burdens associated with co-Trustees.
Most successful trust administrations are those with clear authority, prompt decision-making, defined accountability, and minimal opportunities for conflict which can be found when one initial trustee is appointed with successor trustees as backup and supports for them
Selecting a trustee is one of the most important decisions you will make when creating a trust. If you are establishing a new trust or reviewing an existing estate plan, Wilson Law can help you evaluate whether a single trustee or co-trustees are the best fit for your family’s circumstances. Contact our office at 866-603-5976 or reach out through our website to schedule a consultation.
