One of the most important decisions made during creation of a trust is the selection of a sole trustee or co-trustees. A trustee is a person who manages and distributes trust assets, and co-trustees must perform these duties together. Although there are certainly cases where co-trustees work well together, in California disputes between co-trustees often arise when they cannot reach a unanimous decision regarding the trust they are administering. In these cases, it is important that each co-trustee knows their rights, so the conflict may be resolved without harming the beneficiaries of the trust.
Co-Trustee Disputes in California
Unlike most states, in California co-trustees may only make administration decisions through unanimous consent. According to California Probate Code, unanimity applies to co-trustees “unless otherwise provided in the trust instrument.” Although an estate planning attorney may discuss such language with a trustor to allow action by a majority of trustees, if that wording is not included, actions cannot be taken without consent of all trustees.
In these situations, conflict is likely to arise when the co-trustees are unable to agree on the actions to take on behalf of the trust. Decisions including hiring an attorney to review the trust, hiring a real estate agent to sell trust property, or hiring an accountant to prepare tax returns must be consented to by all trustees named by the trustor.
Co-Trustee Resolutions in California
If you find yourself embroiled in a dispute with your co-trustee(s) there are legal steps you can take to resolve the conflict. Co-trustees who are subject to the default rule in California may file a petition for instructions, which asks a judge of the Superior Court to provide direction to the co-trustees. The purpose of requesting a hearing is to ask a judge to determine whether a trustee’s actions are right, and in the best interest of the trust.
A trustee may also petition the court to remove their co-trustee. Removing a trustee is a complex process that involves holding a hearing to examine the evidence supporting the petition’s request. It also gives the co-trustee an opportunity to respond to the issues raised in the petition. Removal of a co-trustee may be granted if the court finds evidence of wrong-doing or mismanagement of the trust by a co-trustee.
It is important to remember that each trust dispute brings its own complexities that should be examined by an experienced estate planning attorney before action is taken.
Consulting a California Estate Planning Attorney
If you believe your co-trustee is no longer acting in the best interest of the trust you are administering together, Daniel Leahy can help make things right. Mr. Leahy is an experienced Northern California estate planning attorney. Serving Alameda County and the surrounding area, the Law Offices of Daniel Leahy in Oakland is prepared to handle your estate planning issues. Contact us or call (510) 985-4151 to set up a free consultation.