If you’re a co-trustee, you might be wondering: Do both co-trustees always have to sign trust paperwork? In most cases, yes—but not always. The answer depends on the trust’s terms, state laws, and financial institutions’ policies. Here’s what you need to know.

When Do Both Co-Trustees Have To Sign Trust Documents?

Co-trustees must both sign documents when the trust paperwork explicitly states so. Most instances require both trustees to sign documents that affect the trust’s assets, including changing investments, selling properties, or making distributions. However, many trusts allow individual co-trustees to sign checks and similar items. 

Some states have specific laws that require both trustees to sign all documents unless the trust explicitly states otherwise. Additionally, some banks and financial institutions require all co-trustees to sign trust documents. 

Individual policies can supersede trust provisions. Before designating co-trustees or assigning them individual responsibilities, check with your banks and investment firms. 

Trustees acting together are similar to the idea that neither co-trustee can delegate their responsibilities to another party. Although these rules sometimes feel restrictive, they are designed to ensure that co-trustees exercise their fiduciary responsibility to manage trust assets. 

What Are Co-Trustees?

Co-trustees are individuals appointed to manage a trust cooperatively. They work together to ensure the trust serves the trustor’s wishes and intentions. Shared responsibilities include:

• Communicating with each other and any involved parties
• Making joint decisions about assets
• Upholding their fiduciary duty to responsibly manage the trust

The exact responsibilities of a trustee vary depending on the trust type and formation documents. A legal professional can help you determine how to set up a trust to protect your assets and minimize tax consequences. 

This type of arrangement can have several benefits. It reduces the burden of managing a trust by spreading responsibility to multiple parties. Each trustee brings a unique skill set to the table, which is beneficial. It also helps to limit conflicts of interest because decisions require input from all co-trustees.  

Co-trustees are slightly different from successor trustees. In the latter, an individual takes over management responsibilities if the initial trustee is unable to continue in his role. 

Can Co-Trustees Act Independently?

In some cases, a co-trustee can act independently. This usually must be spelled out in the initial estate planning paperwork. Some examples of situations where you might consider allowing co-trustees to act on their own include:

• Conflicts of interest: You can make provisions for one trustee to act independently in cases where another has a conflict of interest.
• Disagreements: You can’t anticipate every eventuality, and it is possible that your appointed trustees will disagree. Therefore, it is a good idea to make plans in case disagreements get in the way of effective decision-making. 
• Geographic challenges: If your co-trustees live in different geographical regions, you may let one or the other make decisions independently, especially in time-critical situations. 
• Special skills: You can designate specific responsibilities according to talents and interests. For example, you might choose one trustee to manage real estate and another to manage stock portfolios. 

Even when acting independently, co-trustees should work together and share information. If a co-trustee objects to the decisions of another, he can file a petition to block the action. Even if the action continues, filing a petition establishes a record of the objection and can help protect the individual from legal action. 

What Happens if Co-Trustees Cannot Agree?

When you appoint co-trustees, you anticipate a certain level of cooperation and shared decision-making. However, there may be situations where co-trustees do not agree. Your initial trust formation documents and any state laws will determine what happens next. In some cases, an outside party may need to get involved. 

Some trusts require a unanimous agreement for decisions to proceed, while others accept majority approval. Because of this, it is very important to fully understand the process of establishing a trust. Legal professionals can help guide you through formation to ensure your trust serves as intended.

Learn When Both Co-Trustees Have To Sign Trust Documents

AmeriEstate legal professionals can help you navigate complex trust situations, such as those involving co-trustees. We are here to answer questions about whether both co-trustees have to sign documents. Our unique process allows you to create a comprehensive estate plan at an affordable cost. Contact us to learn more about our services.