Should I name my kids as co-trustees?
My clients often ask me if they should name their children as co-trustees. Should this be done in your living trust?
Answer: Naming your kids as co-trustees means that they must act together. If down the road they can’t agree or cooperate in making decisions then there is a deadlock. Absent some way of resolving a deadlock in the trust agreement, eventually this trust will end up in a court dispute between the two co-trustees. Examples of a dispute are where one child want to sell real estate and the other doesn’t. This often occurs where one of the children is still residing in the property.
The court may try to resolve the dispute between the two children, or alternatively may decide that the kids just can’t get along and appoint an independent third party to act as trustee.
One way to prevent this problem from occurring is to appoint three co-trustees, which can act by a majority. That way there can never be a deadlock as only 2 out of the 3 ever have to agree.
I welcome your comments and questions.
