Many revocable living trusts have provisions for a special co-trustee, but not many people know what a special co-trustee is or what purpose it serves. In general, the special co-trustee is an independent party that can play a critical role in trust administration. For example, if there is a dispute between a successor trustee and a beneficiary, a special co-trustee may settle the dispute unilaterally or submit the dispute to mediation, arbitration or the court. The special co-trustee may also make important decisions to protect the trust, such as amending the trust to take advantage of a tax law change.

To be clear, the special co-trustee is not the trustee of your trust. The special co-trustee is best viewed as a protector of your trust and an intermediary between trustees and beneficiaries. The special co-trustee is limited to protecting the trust and does not have any authority over the routine administration of your trust. Unfortunately, needs and circumstances change over time and it’s impossible to foresee every situation. By having a special co-trustee, your trust has much more flexibility when these instances occur. You may name a special co-trustee in your trust; typically, however, a special co-trustee is selected by a majority of the successor trustees appointed under your trust.

The special co-trustee should be an independent party whom you feel can work well with your successor trustees and your beneficiaries, and who is knowledgeable about estate planning laws and regulations; and/or, who is capable of seeking professional help when needed.  To that end, the special co-trustee should not be related to any of your family members or the family of any beneficiary.

Please contact the law offices of Morris Hall if you have any questions about the role of a special co-trustee.

Contributed by MH Phoenix Estate Planning Attorney Darren L. Richardson.

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