Managing Co-Trustee Disputes

Appointing more than one trustee to manage a trust has many benefits, such as:

• Creating a system of checks and balances to reduce the likelihood of mismanagement or self-dealing.
• Distributing the workload among trustees instead of having one trustee manage everything.
• Providing more access to talent when each trustee has different strengths and skills.
• Providing continuity of management if one of the trustees is no longer able to continue in their role.

A large downside, though, is that having more trustees means having more opportunities for disputes. If you are a beneficiary of a trust and your trustees have a dispute, this has the potential to negatively affect the value of the trust and your distributions from it.

Trust disputes can be about aspects of trust administration. Some of the more common disputes are about:

• Vague or unclear wording in the trust documents leading to differing interpretations of the trust directions.
• Having different tolerances for financial risk, with one trustee wanting to make decisions that the other views as either too risky or too conservative.
• Lack of timely communications and responses to questions.
• One trustee attempting to outmuscle the other rather than acting collaboratively.
• Pre-existing family disputes.

As a beneficiary, your first step is to contact a South Florida lawyer with expertise in litigating trust disputes, such as the attorneys at Huth, Pratt & Milhauser. Depending on the specifics of your situation, your attorney has several options for how to proceed.

One option is to arrange for mediation to resolve the dispute. In this scenario, all parties would attend a mediation or agree to be bound by the terms of mediation. While this can be time-consuming, it is faster and less expensive than litigation.

Another option is to review the language in the trust to see if there is an option to remove one or both trustees and replace them. Some trusts contain provisions for removing trustees, but many do not.

If neither of these two methods are possible, the third option is to petition the Court for removal of the trustee(s). You will need to prove that the removal of the trustee is in the best interest of the trust. The trustee would either be replaced by a successor trustee named in the trust documents or a professional, neutral, third-party trustee that the court appoints.

In cases of embezzlement, self-dealing, or other criminal activities, your attorney may also contact the local authorities to press charges against a trustee.

If you are a beneficiary and the trustees for your trust are locked in a dispute, or if you are a trustee and you feel your co-trustee is either making poor choices or being unresponsive, contact Huth, Pratt & Milhauser right away. We will advise you of your legal options and fight to ensure your trust is properly managed.