How would you like to keep lawyers fully employed? Don’t like that idea? Well there are many people who do just that by naming two successor co-trustee’s of their revocable Trust. The thought is a good one: I like both people so why not have them act together. And being a Trustee is a lot of work so why not give the job to two people instead of one?
What many people do not consider is whether the two people you like can work with each other. Just because you like two people does not mean they like each other or can work together. And when two successor co-trustees get into a deadlock, the lawyers will be busier than cupid on Valentine’s day.
The problem is that two trustees must act unanimously if they are to take any action at all. If there is a deadlock between the two, then no business can take place and the Trust administration stops in its tracks. That can be dangerous financially for the Trust, especially if there are assets to be sold and managed. The only solution when a relationship breaks down is to go to Court and seek either: (1) instructions from the Court, or (2) an order removing the co-trustee. Either way, a good deal of money will be spent to find a resolution.
What’s a Settlor to do? First, don’t select two trustees unless you talk to them first about working together. Second, consider either appointing an odd number of Trustees, such as three, or just one. Sometimes one Trustee is better at getting things done quickly. Especially if the Trust calls for an outright distribution of assets after you are gone.
Whatever you do, put some thought into it. Don’t assume that two successor co-trustees will automatically get along. Oftentimes, there is no love lost between rival co-trutees.
