What is a co-trustee in a trust?
n. a trustee of a trust when there is more than one trustee serving at the same time, usually with the same powers and obligations. Occasionally a co-trustee may be a temporary fill-in, as when the original trustee is ill but recovers.
What happens if a brother or sister becomes a trustee?
Depending on the way the trust is set, there can be a situation, where the person that’s the trustee overseeing the money for their brother or their sister, will receive a windfall if that money is not actually given to that brother or sister. Imagine a situation where the bad brother passes away and the trustee receives the balance that’s left.
What does it mean to be a co trustee of a trust?
In addition, co-trustees must generally act cooperatively with each other, unless the trust explicitly grants certain duties to a single trustee. This means that each co-trustee must act with the full consent and knowledge of the other co-trustees.
What happens when a grantor names multiple trustees?
When a grantor names multiple trustees, or co-trustees, they are responsible for co-managing the trust’s assets. It is important to know what and how much power each co-trustee has over the management of the trust’s assets.
Can a family member act as a trustee for a trust fund?
A better alternative to a family member is to let the bank act as trustee. To keep that personal touch, let the bank and a sibling act as co-trustees. Establishing a trust fund for your minor children enables them to have access to the funds that they may need in case you pass away.
Are there problems when siblings act as co-trustees?
On the face of it, yes. But as an experienced estate planning attorney I invariably find myself cautioning these parents. Problems almost certainly will arise whenever siblings act as co-trustees. The challenges begin with hassles such as having to co-sign bank, mortgage and escrow documents relating to the trust.
In addition, co-trustees must generally act cooperatively with each other, unless the trust explicitly grants certain duties to a single trustee. This means that each co-trustee must act with the full consent and knowledge of the other co-trustees.
Can a brother or sister be a trustee?
You think that since your children have a great relationship with your brother or sister (their aunt or uncle), that they will be great trustees. Even if this family member agrees to take on that role, it may not be in his or her best interest to have financial control over your children’s assets.
Who are the successor co trustees of a trust?
I have reviewed many trusts that provided for multiple trustees serving together “co-trustees”. They will have language that states something like, “if at any time both grantors [trust-makers] are incapacitated or have died the successor co-trustees shall be “John Doe and Jane Doe”….”.