A client recently sat in my Manhattan office and explained her plan to name her two children as joint trustees. One is a numbers-driven investment banker; the other is a compassionate teacher. “They’ll balance each other out,” she reasoned. It’s a common and well-intentioned thought. In my experience, however, what is designed for balance can easily lead to deadlock, leaving the trust’s assets and beneficiaries in limbo.
Appointing more than one trustee suggests a system of checks and balances—a way to prevent any single individual from exercising unilateral control over a family’s legacy. For many, it feels like a prudent way to combine different strengths—one person’s financial acumen with another’s personal understanding of the beneficiaries’ needs. And sometimes, it works exactly as planned. But a trust is not a democracy; it is a legal entity governed by a strict set of rules and fiduciary duties. When co-trustees cannot agree, the work of the trust simply stops.
The Legal Framework for Trustee Decisions
When I draft a trust, I am not just planning for the best-case scenario. I am building a framework to withstand disagreement, incapacity, and conflict. The role of joint trustees—often called co-trustees—is a critical part of that structure. The central question is always: how will they make decisions?
Many assume that two trustees can simply agree to disagree and move on. Under New York’s Estates, Powers and Trusts Law (EPTL) § 10-10.7, unless the trust document explicitly states otherwise, any power vested in three or more fiduciaries may be exercised by a majority. But if there are only two trustees, the law requires unanimity. If one says yes and the other says no, the answer is no. Action is impossible.
Imagine a trust that holds a family home in Brooklyn and a stock portfolio. One trustee believes it’s time to sell the appreciated stock and diversify. The other, fearing market volatility, refuses. Without a mechanism to break the tie, they are at an impasse. No assets can be sold. No new investments can be made. If a beneficiary needs a distribution for college tuition or a medical emergency, that request can be held hostage by the disagreement. This is how a family’s stewardship plan grinds to a halt.
Building a Workable Co-Trustee Structure
A well-drafted trust anticipates these conflicts and builds a road map to solve them. Simply naming two people and hoping for the best is not a strategy; it’s a gamble. At our firm, we work with clients to design intentional and resilient co-trustee provisions.
First, we can explicitly define the decision-making authority in the trust instrument itself. We can override the default unanimity rule for two trustees or specify that a majority vote is sufficient if we appoint three. This introduces a natural tie-breaker. The third trustee doesn’t have to be a family member; it can be a corporate trustee or a trusted family advisor whose impartiality can help resolve disputes.
Another approach is to divide responsibilities. We can designate one trustee to manage investments while giving another the sole authority over discretionary distributions to beneficiaries. This aligns the trustee’s role with their expertise and can reduce friction by creating clear lanes of authority. The investment-minded child manages the portfolio, and the empathetic child manages the family’s needs. Both are fiduciaries, but their duties don’t overlap in a way that creates conflict.
The Role of a Trust Protector
For more significant trusts, we often recommend appointing a “Trust Protector.” This is an independent third party who is not a trustee but is given specific powers under the trust document. These powers can include the ability to resolve disputes between trustees, to amend the trust for changes in the law, or even to remove and replace a trustee who is failing to perform their duties. The Trust Protector acts as a crucial oversight mechanism, ensuring the original intent of the trust is honored even when the trustees are at odds.
The decision to appoint joint trustees is not a simple one. It requires a frank assessment of family dynamics, individual personalities, and the nature of the assets being managed. The goal is to build a structure that promotes collaboration, not conflict. Stewardship.
If you are considering naming joint trustees or are currently serving as one and facing disagreement, the first step is a careful review of the trust document’s decision-making clauses. We can schedule a trust review to identify potential sources of conflict and discuss mechanisms for resolving them before they require intervention from the Surrogate’s Court.
