Will and Estate Planning: When Two Or More Heads Are Not Necessarily Better Than One
When it comes to will and estate planning… with more and more people taking action to establish wills, and estate and asset protection plans motivated by COVID-19, I am getting many questions about trustees.
In some families where there are multiple siblings, the question of co-trustees inevitably arises. Let me state that there is no one right answer to the question of how many trustees one should designate. However, there are several questions you should ask yourself and be very clear about when deciding on a sole trustee or co-trustees.
How Many Is Too Many: The Pros And Cons Of Co-Trustees/Co-Agents
When you think about the process by which co-trustees make decisions, which vary based on state law, they must act unanimously. Just think about this for a moment. How easy is it to agree on everyday things, like where to order take-out from or what movie to watch on Netflix, or where to go on vacation? When it comes to making important decisions and when a loved one’s life and money are involved, things can get pretty chaotic. And I must say, I’ve seen these situations get ugly.
For instance, imagine your children having to decide when to stop providing life-extending services. Imagine that two or more children have to agree. One may want to end the suffering while the other may not be ready to act. You also must take into account that many trusts require that the co-trustees must act together, meaning that for dealing with paperwork, signing checks, and real property sales, the trustees must be in the same place at the same time. This can really slow the process down if the trustees do not live near one another, or if they do not communicate their availability to each other. Even though some trusts do include provisions that allow co-trustees to act independently of one another, it depends on whether financial institutions will honor the language (some do not or make it really difficult)—this can cause a lot of headaches for the co-trustees.
It Can Get Complicated When There Are Multiple Trustees
Can you imagine your co-trustees disagreeing so intensely that they then file Court petitions against each other? It happens all the time. Most trusts are written in a way the gives each co-trustee veto power. So, the arguments can go on and on. For example: “If you don’t agree to give me Dad’s car, I won’t agree to give you Mom’s jewelry.” Sibling dynamics will surely come into play.
Maybe One Is Enough
For many families, having one child serve as sole trustee is often the best solution. However, if you really believe choosing one child over another will cause a fight (and by now you may be convinced that making them co-trustees will ensure a fight) you can opt to appoint an independent trustee. Specifically, a corporate trustee (e.g., a bank or financial institution), or a private professional fiduciary. Most importantly, if you decide not to go that route, do not worry about hurting your children’s feelings by not assigning multiple trustees. And don’t worry if you do. Either way, everything will eventually work out one way or another.