When setting up a trust, sometimes it is beneficial to name two or more trustees in the trust document. You may want or need several trustees for better trust management, to head off family disputes, or “just in case”.
Better Trust Management
One reason to name multiple trustees is to provide the trust with a quality management team. For example, maybe the relative you would like to choose as trustee is a real estate agent. Since the trust will have your house and your investment real estate in it, he or she may seem a natural choice. However, your relative may have no experience in investing or accounting. In that case, you may want to select a second trustee with this experience or consider someone else as a sole trustee instead. Wisely and responsibly investing trust assets and doing accounting and yearly taxes are key roles for a trustee.
Avoiding Family Disputes
People creating trusts often choose family members to act as trustees. They may choose more than one family member to avoid a family dispute or create parity among relatives. For example, you might decide to name both of your cousins as trustees of the family trust to avoid disputes between the one appointed trustee and the one not appointed trustee. If only one family member is trustee and makes significant decisions about family heirlooms or properties, the other may protest.
Note, however, that choosing more than one trustee can cause conflicts too. The trustees may not be able to agree about important (or even minor) decisions for the trust. To attempt to avoid this problem, the trust document should include a “tiebreaker” provision, or you should have an odd number of trustees.
Replacement Trustees: Just in Case
If you name a single trustee in your trust document, you should select one or two replacement trustees who will be responsible for taking over if the original trustee cannot serve. These are known as “successor trustees”. If you name more than one trustee, you also should select at least one successor trustee, unless you want one of your trustees to have sole management of the trust.
You can specify in the trust document when successor trustees should take over, but generally they must if the original trustee becomes incapacitated, dies, or voluntarily steps down from the position. Many people create trusts of which they serve as trustee until their deaths, at which time a designated successor trustee takes their place.
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