Can a Trust Really Have Multiple Trustees? – Avoid This Mistake + FAQs

Confused about whether a trust can have multiple trustees? You’re not alone.

According to the American Bar Association, nearly 40% of estate plans include co-trustees, yet many people misunderstand how they function, leading to costly disputes. 

The Short Answer: Yes, But It Comes With Challenges

A note: Co-trustees often need to work together closely when managing a trust.

A trust can have multiple trustees, known as co-trustees. In fact, it’s common for two or more people or institutions to share trustee duties. Co-trustees collectively manage the trust and must coordinate on every decision, which means no single trustee can act independently without the others’ consent.

This arrangement provides oversight and checks and balances, but it also introduces potential downsides. For example, having to consult each other on investments, distributions, and other actions can slow down decision-making. If the co-trustees disagree or fail to communicate well, the trust’s administration could stall until they reach an agreement or get legal guidance.

Yes – a trust can have multiple trustees – but expect extra coordination and possible conflicts along the way.

The Legal Framework: Federal Rules & State Variations

Under U.S. trust law, co-trustees are allowed, but the rules governing their actions can vary by jurisdiction. A major influence is the Uniform Trust Code (UTC), a model law adopted in many states, which provides default guidelines on how multiple trustees operate. For instance, the UTC (and similar state laws) generally lets co-trustees act by majority decision if three or more trustees are serving.

However, if only two co-trustees are serving, usually both must agree unanimously on decisions. This means that in many states, the default rule is unanimity when two trustees are involved, whereas a majority vote can control if there are three or more trustees.

It’s important to note that state variations exist. Some states have modified the UTC’s provisions or have older laws that require unanimous consent for any co-trustee action unless the trust document says otherwise. Other states explicitly allow majority rule among trustees as the default. Always check your state’s trust code or consult an attorney to understand the specific requirements in your jurisdiction.

Crucially, the trust document itself can override default rules. The person who creates the trust (the settlor) can include language specifying how co-trustees make decisions. For example, a trust can stipulate that any trustee may act independently, or conversely, it might require unanimous agreement on all actions. Trust terms take priority, so co-trustees must follow any decision-making procedures laid out in the trust instrument.

Key Considerations for Co-Trustees

Even when legally allowed, having multiple trustees involves trade-offs. Here are a few key factors to consider if you name co-trustees:

For example, co-trustees must coordinate on decisions, which can lead to delays if they’re not on the same page. At the same time, each co-trustee is fully responsible as a fiduciary – they all owe a duty of loyalty and care to the beneficiaries. You cannot assume “the other trustee will handle it” and turn a blind eye; every trustee must stay involved and vigilant. In fact, if one trustee mismanages the assets, the others have an obligation to prevent or correct it. Failing to do so can make a passive trustee liable for not stopping a co-trustee’s misconduct. In summary, co-trustees share the workload and the responsibility. This can be beneficial for oversight, but it also means each trustee is on the hook to ensure the trust is administered properly.

Major Pitfalls to Avoid 🚨

A note: Disagreements between co-trustees can lead to frustration and costly delays in administering the trust.

Even well-intentioned co-trustees might encounter these common pitfalls:

• Deadlock Risks: If co-trustees don’t agree on a decision, the trust can reach a standstill. Without a way to break the tie, critical actions (like distributing funds or selling an asset) may be delayed indefinitely. In many cases, serious co-trustee disputes end up in court, with co-trustees suing each other or asking a judge to decide. This kind of deadlock not only postpones distributions to beneficiaries but also racks up legal fees that the trust might have to pay.

• Conflicting Interests: Co-trustees might have personal biases or conflicts of interest that affect their judgment. For example, if one co-trustee is also a beneficiary of the trust, they might favor decisions that benefit themselves or certain family members. Or if co-trustees are siblings who don’t get along, underlying family tensions could spill into trust management. Such conflicts can lead to unfair decisions or mistrust among beneficiaries. Every trustee must remember their fiduciary duty to all beneficiaries and set aside personal interests – which is sometimes easier said than done.

• Trustee Removal Issues: Getting rid of an uncooperative or bad co-trustee isn’t simple. Typically, a trustee can be removed only by court order (unless the trust terms provide an alternative method). Courts usually require a valid reason – like proven misconduct, breach of fiduciary duty, incapacity, or inability to work with co-trustees – to remove a trustee, not just because of minor disagreements. Judges will typically require evidence that the difficult trustee’s behavior is harming the trust or beneficiaries. If those grounds exist, the court can remove or replace a trustee. It’s a high bar intended to preserve the trustmaker’s choice of trustee except when absolutely necessary.

Defining Key Terms 🏛️

To clarify the discussion, here are simple definitions of a few legal terms mentioned:

• Co-Trustee: A person or entity who shares the management of a trust with one or more other trustees. Co-trustees collectively hold the legal title to the trust assets and must work together in administering the trust. Each co-trustee has equal authority under the trust unless the trust document specifies otherwise.

• Fiduciary Duty: The legal obligation to act in the best interest of another party. In the context of trusts, every trustee (and co-trustee) has a fiduciary duty to the beneficiaries of the trust. This duty includes loyalty (no self-dealing or conflicts of interest), prudence in managing assets, and impartiality among beneficiaries. Breaching fiduciary duty can make a trustee personally liable for any losses.

• Majority Rule vs. Unanimity: These terms describe how decisions are made when there are multiple trustees. Majority rule means a majority of the co-trustees can make a decision that is binding on the trust. For example, if there are three co-trustees, two out of three in agreement could take action. Unanimity means all co-trustees must agree on a decision before it’s implemented. Many trusts require unanimous consent when only two co-trustees are serving, since a “majority” of two is effectively both. The trust document can specify which standard applies, and in absence of guidance, state law provides the default (often unanimity for two trustees, majority for more).

Examples of Trusts with Multiple Trustees

Co-trustees are used in a variety of trust arrangements. Here are a few examples of when you might encounter multiple trustees managing a single trust:

In family trusts, it’s common for spouses to serve jointly as co-trustees while they are alive, so they both oversee their property in the trust. Charitable trusts and foundations nearly always use multiple trustees or directors – this creates accountability and a diversity of input for managing funds dedicated to a charitable purpose. In corporate or institutional trust settings, co-trustees can be used to segregate duties (e.g., one trustee might be a financial institution handling investments while another trustee or committee handles distribution decisions and oversight).

Evidence: Why Some Trusts Prefer Multiple Trustees

If co-trustees can be a hassle, why do many estate plans include them? Here are a few reasons a trust creator might intentionally opt for multiple trustees:

• Checks & Balances: Two (or more) heads are better than one. Having more than one trustee creates an internal check-and-balance system so that one trustee’s decisions are reviewed by another. This oversight can prevent any single trustee from making reckless or unilateral decisions. For instance, one co-trustee might catch if another is about to invest trust assets in something too risky or notice if expenses paid from the trust seem inappropriate. The idea is to add a layer of security and accountability.

• Specialized Roles: Co-trustees can split duties according to their strengths or expertise. Perhaps one trustee is a savvy investor who manages the trust’s portfolio, while the other is a family member who understands the beneficiaries’ needs and handles distribution requests. By dividing responsibilities, each co-trustee can focus on what they do best. This collaboration can lead to better overall management of the trust. It’s similar to having co-executives in a business – maybe one is the “numbers person” and another is the “people person,” working together to cover all bases.

• Continuity & Succession: Using multiple trustees can ensure continuity in the trust’s management. If one trustee dies, becomes incapacitated, or resigns, the remaining trustee(s) can continue administering the trust without interruption. There’s no gap in oversight because at least one trustee is always in place. This can be especially important for long-term trusts – for example, a trust meant to last for many years could initially have two co-trustees; if one steps down, the other can keep things going while a replacement is found. Co-trustees can also mentor successor trustees: an older trustee might teach a younger co-trustee over time, so that when the older one departs, the younger is fully up to speed.

In summary, multiple trustees add oversight and resilience. They provide a safeguard against mismanagement (since each trustee watches the other) and can combine their skills to manage the trust effectively. However, these benefits only materialize if the co-trustees are able to cooperate; otherwise, the advantages can quickly turn into the pitfalls we discussed earlier.

Comparison: Single vs. Multiple Trustees

How does having co-trustees stack up against having just one trustee? The table below highlights some key differences:

With a single trustee, administration is straightforward: that person has full control (which can be efficient) but also full burden (no one to share duties or blame). With multiple trustees, you gain the benefit of collective decision-making and oversight, but you introduce the possibility of internal conflict and slower processes. There’s no one-size-fits-all answer which is better; the best choice depends on the trust’s context and the people involved.

FAQs

Can multiple trustees make decisions independently?
No – not in most cases. Co-trustees generally must act together. Typically, all co-trustees or a majority must agree on major actions as set by the trust’s terms or default law.

Can a trustee be removed if they refuse to cooperate?
Yes – but only under specific conditions and often through a legal process requiring proof of misconduct or incapacity.

What happens if trustees disagree?
If co-trustees reach an impasse, they may use mediation, tie-breaker provisions, or seek court intervention to resolve disputes.

Is having multiple trustees always a good idea?
No – while co-trustees add oversight, they may slow decision-making and lead to conflicts if cooperation fails.

Can a trustee resign?
Yes – a trustee can resign by following the proper process in the trust document, which usually involves notice and sometimes court approval.