Is A Cotrustee Really Necessary?

Let's face it...as we age, we need help. Admittedly, many of us need help despite not having aged!

I recently finished an emergency job requiring a quick amendment to a trust to enable a client's children to sign checks for her because Client had a debilitating stroke. Client signed her trust about 15 years ago when she was 70ish and quite capable of handling things herself. I wish that Client had come in for periodic reviews so that we could have suggested her adding cotrustees with her.

One of my usual suggestions when an aging client comes in for an estate planning review is to suggest that the client name a cotrustee to serve with the client if he or she has someone trustworthy to name. Typically, we revise the trust so that the new cotrustee has independent authority to act. Usually this is a relative who is already named as a successor trustee.

There are several benefits to naming a cotrustee now:

  • The cotrustee acts like an agent under a power of attorney for trust assets.
  • If the cotrustee never needs to act during your life (as was the case with my mother and me), there is no downtime when the cotrustee can act.
  • A doctor's certificate does not have to be obtained during your life to enable a successor trustee to act. I always want to avoid statements that infer that you no longer have your mental capacity to act.

The downside to this arrangement is that a cotrustee with independent authority to act could overstep his or her boundaries and steal from you or mismanage your money. That is why naming someone absolutely trustworthy is vital.