Co-Trustees: The Risks

When clients ask us to name co-trustees, our first instinct is to slow down and ask some questions.

Co-trustees sounds appealing in theory. Two people sharing the responsibility, keeping each other in check, no single person carrying the weight alone. We understand the impulse.

But in practice, co-trustees have to agree on decisions. Every decision. And when they don't, the trust can grind to a halt. Disputes between co-trustees can end up in court, which is expensive, slow, and exactly the kind of outcome a good estate plan is supposed to prevent. We have also seen co-trustee arrangements create a logistical burden that clients didn't anticipate. Opening bank accounts, managing investments, and executing transactions all become more complicated when multiple signatures are required.

We have watched sibling relationships get seriously damaged, sometimes permanently, from the strain of having to act together as co-trustees during an already difficult time. Parents often name their children together with the best of intentions. It doesn't always play out the way they imagined.

Our default recommendation is to name trustees in a specific order instead. One primary trustee, with successors clearly named behind them. Cleaner, faster, and far less likely to create conflict.

That said, there are situations where we are more open to co-trustees.

Spouses, for one. A married couple has usually spent years disagreeing and working things out, and they often have a shared stake in the outcome that makes collaboration more natural.

The other situation is when a professional trustee is involved. Pairing a corporate or professional trustee with someone who has deep personal knowledge of the family can be a thoughtful balance, as long as the roles are clearly defined.

At the end of the day, the client knows the people involved far better than we do, and it is ultimately their decision. What we can do is walk through the considerations and share what we have seen go well and not so well. These are the conversations we have before anyone signs anything.