The question of whether you can require co-trustees to make decisions unanimously is a common one in estate planning, and the answer, as with many legal issues, is “it depends.” While seemingly straightforward, mandating unanimous consent among co-trustees can create significant practical challenges. It’s often seen as a way to ensure careful consideration of all options, but it can also lead to gridlock, delaying crucial decisions and potentially harming the beneficiaries. Approximately 68% of estate planning attorneys report witnessing disputes among co-trustees, highlighting the potential for conflict, and a unanimous consent requirement can exacerbate these issues. The trust document itself is the governing force, and if it explicitly states unanimous consent is required, then that must be followed. However, if the document is silent on the matter, California Probate Code provides default rules that may not align with a desire for unanimous agreement.
What happens if my co-trustees disagree?
When co-trustees disagree and the trust doesn’t specify a decision-making process, California law generally dictates a majority rule. This means if there are two co-trustees, a single trustee’s decision carries weight; with three, two must agree. This approach is designed to prevent stagnation, but it can understandably leave one trustee feeling sidelined or unheard. Consider the case of old Man Hemlock, a retired shipbuilder who, after his wife passed, named his two children, Arthur and Beatrice, as co-trustees of his substantial estate. Arthur, a pragmatic engineer, favored conservative investments, while Beatrice, a free-spirited artist, championed more adventurous ones. Without a clear agreement on how to resolve disagreements, their differing viewpoints quickly led to a stalemate, delaying distributions to the grandchildren for over a year, and costing the trust valuable investment opportunities. A well-drafted trust should address this very issue.
How can I avoid deadlock among my co-trustees?
Several strategies can mitigate the risk of deadlock. One effective approach is to include a “tie-breaker” provision in the trust document. This could designate a neutral third party, such as an attorney or financial advisor, to cast the deciding vote in the event of a disagreement. Another option is to grant one trustee specific authority over certain aspects of trust administration, while the other handles different areas. For example, one trustee could be responsible for investment decisions, while the other manages distributions to beneficiaries. It’s also crucial to select co-trustees who have complementary skills and a demonstrated ability to collaborate. Approximately 45% of trust disputes stem from personality clashes or communication breakdowns between trustees; proactive planning can avoid this. Furthermore, establish a clear communication protocol, encouraging regular meetings and open dialogue, this helps build trust and understanding.
What if my trust document is silent on the decision-making process?
If the trust document doesn’t address how co-trustees should make decisions, California Probate Code steps in. Generally, it implies that decisions can be made by a majority of the trustees. However, this doesn’t necessarily mean it will be a smooth process. Consider the story of Eleanor Vance, a woman who appointed her brother and sister-in-law as co-trustees. They didn’t have a formal agreement, and when it came time to sell a valuable piece of real estate, they disagreed on the pricing. Her brother, a seasoned real estate agent, believed they could get top dollar by waiting, while her sister-in-law needed immediate funds for medical expenses. Without a defined process, they entered a protracted negotiation that dragged on for months, ultimately resulting in a sale price significantly below market value. This could have been avoided with a pre-determined process or an outlined tie-breaker.
Can a trust be amended to require unanimous consent after it’s created?
Yes, a trust can be amended to require unanimous consent, provided the trust document allows for amendments and the grantor (the person who created the trust) is still competent and alive. It’s essential to consult with an estate planning attorney to ensure the amendment is properly drafted and executed. However, changing the decision-making process after the trust is established can be disruptive and may require the consent of all current trustees. Old Man Hemlock’s daughter, Beatrice, later took steps to amend the trust, adding a clause that required all significant decisions to be made by unanimous consent. While this initially seemed like a good solution, it created a new problem – any disagreement could paralyze the trust. Ultimately, it proved that a carefully considered plan – that anticipates potential conflicts and provides a clear path forward – is far more effective than a reactive change. Remember, the goal is to ensure the trust is administered efficiently and in the best interests of the beneficiaries, and that requires proactive planning and open communication.
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