If you are considering arranging a Trust with Co-Trustees or Co-Successor Trustees you may want to reconsider. Usually Trust creators, known as Trustors or Settlors, who wish to have Co-Successor Trustees do so for a reason. Possibly they don’t wish to show a preference among their children, so they designate Co-Successors. Or, they want a “checks and balances” approach to preclude one child from taking advantage of a power privilege by acting alone as the sole Successor Trustee. The problem here is with California institutions (banks, credit unions, etc.) who will not recognize the authority of Co-Trustees who must act jointly. Instead, they require that the document designating Co-Trustees provide that each of the Co-Trustees may act independently of each other. This, of course, defeats the purpose of having Co-Trustees as the “checks and balances” approach is ignored. As a result, if the Trust document requires that the Co-Trustees act jointly, the institution may not recognize the authority of Co-Trustees at all. If the Trustor is deceased or incapacitated, the Co-Trustees may be powerless to act on the account without Court action to amend the Trust.
Trust Tip: Contact the institutions where you have bank or investment accounts to determine their policy in this regard before designating Co-Successor Trustees. Be sure and get their response in writing then plan accordingly with your Trust.