How to Resolve Disputes Among Co-Trustees

You agreed to serve as a co-trustee to honor a loved one or protect your family’s wealth—only to find yourself arguing with another trustee about investments, distributions, or how transparent to be with beneficiaries. Maybe every decision feels like a standoff, you’re worried about being personally liable if something goes wrong, and you’re not sure when you can act alone or when you must act together. This guide from Joshua G. Curtis Law walks through how co-trustee disputes arise, what the law expects of you, and the practical tools—short of and including court—that can help you resolve those disputes while protecting yourself and the trust.

Important disclaimer: This article provides general information based largely on U.S. trust law principles (including the Uniform Trust Code and Restatement (Third) of Trusts). Trust law is state-specific and fact-specific. It is not legal advice. Before making any decision as a trustee, you should consult an attorney licensed in your jurisdiction about your particular trust and circumstances.

1. Why Co-Trustee Disputes Arise

1.1 Common co-trustee structures

Many modern trusts appoint more than one trustee—a mix of siblings, a family member and a corporate trustee, or a family member and a professional fiduciary. In states that follow some version of the Uniform Trust Code (UTC), co-trustees generally may act by majority decision if they cannot be unanimous, unless the trust document says otherwise. However, some state statutes or trust instruments still require unanimous agreement when only two trustees are serving, which means disagreement can lead to deadlock.

1.2 The most frequent fault lines

Even well-intentioned co-trustees commonly clash over:

• Investment strategy: One trustee favors aggressive growth; the other prioritizes preservation and income.
• Distributions: Disagreements about how much to distribute, to whom, and whether a beneficiary is being “responsible” or “entitled.”
• Control and workload: One trustee feels the other is micromanaging or not pulling their weight.
• Communication with beneficiaries: How much information to share, how often, and in what level of detail.
• Fees and conflicts of interest: Disputes over trustee compensation or whether a trustee is using their position to benefit themselves or their business.

Because trustees owe fiduciary duties—heightened duties of loyalty and care—these ordinary disagreements can quickly become legal problems if they impair trust administration or lead to a breach of duty.

2. The Legal Framework Governing Co-Trustees

2.1 Core fiduciary duties still apply—individually and collectively

Regardless of how many trustees there are, each trustee typically owes the classic fiduciary duties:

• Duty of loyalty: To act solely in the interests of the beneficiaries and avoid self-dealing or conflicts of interest.
• Duty of prudent administration: To manage and invest trust assets with reasonable care, skill, and caution, often under a “prudent investor” standard.
• Duty of impartiality: To balance fairly among current and remainder beneficiaries unless the trust clearly favors one class.
• Duty to inform and account: To keep beneficiaries reasonably informed about the trust and provide reports so they can protect their interests.

These duties apply to each co-trustee. You cannot simply “go along” with another trustee’s decisions without exercising your own independent judgment.

2.2 Decision-making rules: majority versus unanimity

In many UTC-based jurisdictions, the default rule is that co-trustees who cannot reach a unanimous decision may act by majority, unless the trust instrument says otherwise. For example, some states’ codifications of UTC §703 allow action by majority and give courts authority to resolve disputes when there is no majority.

The starting point is always the trust document. It may:

• Require unanimous consent for certain “major” actions (like selling a business or changing investment advisors).
• Allow majority rule for routine decisions.
• Give a particular trustee (such as a corporate trustee) a tie-breaking vote on specific issues.
• Designate a “trust protector” or advisor with authority to resolve specified disputes.

2.3 Duty to participate and to cooperate with other co-trustees

Under the Restatement (Third) of Trusts, when a trust has more than one trustee, each trustee has both a duty and a right to participate actively and prudently in administering the trust. A co-trustee is expected to cooperate reasonably with the others in performing all aspects of the trust’s administration. That means:

• You generally cannot “check out” and let another trustee handle everything.
• You usually cannot delegate core discretionary functions (such as deciding on distributions) to another co-trustee and then claim you are not responsible.
• You are expected to share information with your co-trustees and keep them reasonably informed about actions you take on behalf of the trust.

Failing to participate, refusing to communicate, or obstructing reasonable actions of other trustees may itself constitute a breach of duty or a ground for removal in some circumstances.

2.4 Individual liability among co-trustees

Co-trustees are often jointly responsible for administration, but they are not automatically liable for each other’s missteps. Under UTC-style provisions, a trustee who does not join in an action is not liable for that action unless they fail to exercise reasonable care to:

• Prevent a co-trustee from committing a serious breach of trust when they know about it, or
• Compel a co-trustee to redress a serious breach that has already occurred.

In practice, this means that if you see a co-trustee doing something clearly inappropriate—such as self-dealing or ignoring obvious beneficiary harm—you may be required to object, insist on corrective action, seek mediation, or even petition the court rather than say nothing.

3. Practical Steps to De-Escalate and Resolve Co-Trustee Disputes

3.1 Start with the trust document and governing law

Before debating what is “fair,” co-trustees should sit down (ideally with counsel) and carefully review:

• The trust agreement, including:
  • Decision-making rules (unanimous vs. majority)
  • Specific powers and limitations for each trustee
  • Any built-in mechanisms for breaking deadlocks or resolving disputes
  • Removal, resignation, and successor trustee provisions
• The applicable state trust statute (often a version of the UTC) to fill in gaps where the document is silent.

This step often clarifies who actually has authority to make a contested decision and what options are available when co-trustees disagree.

3.2 Professionalize communication and process

Trusts that function well often look like well-run boards of directors. Consider adopting internal protocols such as:

• Regular meetings: Quarterly or monthly calls/meetings with a clear agenda and minutes.
• Shared information: A secure shared folder where statements, valuations, tax returns, and correspondence are stored and accessible to all co-trustees.
• Written decision-making: For significant decisions, circulate a written memorandum summarizing the issue, options, legal constraints, and proposed course of action, and record each trustee’s vote.
• Ground rules: Agree that disagreements will be addressed first in a structured conversation, not through side calls with beneficiaries or unilateral actions.

Structured governance not only reduces misunderstandings but also creates a record demonstrating prudent administration if a dispute later lands in court.

3.3 Thoughtful delegation and division of responsibilities

Most modern statutes and the Restatement recognize that trustees may delegate some functions (for example, day-to-day investment management) to qualified agents, or divide roles among co-trustees, as long as they exercise reasonable care in selecting, instructing, and monitoring those agents. However, co-trustees generally may not delegate core discretionary decisions the settlor likely expected a trustee to make personally, such as key distribution decisions.

Practical approaches include:

• Designating one trustee as “lead” on investments, another on beneficiary relations, while still bringing major decisions to all trustees.
• Engaging a professional investment advisor, CPA, or property manager and making their reports available to all co-trustees.
• Clearly documenting any delegation in writing—including scope, standards, and reporting expectations.

3.4 Bringing in neutral professionals early

Sometimes, co-trustees can recalibrate their roles with help from neutral professionals:

• Independent trust counsel: A lawyer engaged by the trustees in their fiduciary capacity (not personal litigation counsel) can explain duties, clarify the legal options, and help structure compromises.
• Outside fiduciary or corporate co-trustee: Where family dynamics are toxic, adding a professional trustee as a neutral third voice can reduce friction and provide expertise.
• Financial and tax advisors: Neutral advisors can help depersonalize disagreements over investment risk or tax planning.

Counsel must also be alert to conflicts of interest when representing multiple fiduciaries or serving as a co-trustee themselves. Professional ethics materials from organizations such as ACTEC highlight that lawyers who serve as or represent trustees must carefully manage—or avoid—conflicts between different fiduciary roles and between fiduciaries and beneficiaries.

3.5 Use mediation before positions harden

When communication breaks down, mediation can be a powerful tool. A mediator experienced in trusts and estates can help co-trustees (and sometimes beneficiaries) explore options in a confidential, non-adversarial setting and craft solutions—such as reallocating duties, adjusting distribution practices, or agreeing on objective benchmarks for investments—that might be difficult to achieve in litigation.

4. Legal Tools When Co-Trustees Cannot Agree

4.1 Majority rule and “tie-breaker” structures

If the trust and governing law allow majority decision-making among three or more co-trustees, the simplest solution to chronic deadlock between two trustees may be to appoint a third co-trustee. That third trustee can serve as a neutral tie-breaker and may be given specific authority in the trust document or by court order to decide designated disputes.

In some jurisdictions, statutes expressly authorize majority action among co-trustees and contemplate court involvement when no majority exists. For example, certain codifications of UTC §703 allow majority action and authorize the court, upon petition, to direct how a disputed power should be exercised when there is no majority agreement.

4.2 Petitions for instructions or declaratory relief

When co-trustees are genuinely uncertain about how to apply ambiguous trust language or how to balance conflicting duties, they can petition the appropriate court (often a probate or “orphans’” court) for instructions. Courts may:

• Approve (or disapprove) a proposed action.
• Interpret key terms of the trust.
• Authorize deviation from strict trust terms when changed circumstances would otherwise frustrate the trust’s purposes.
• Temporarily empower one trustee to act on a specific issue where co-trustees are deadlocked.

Courts can be asked to break trustee deadlocks and direct action that best serves the trust and its beneficiaries.

4.3 Court-ordered or agreed limitations on a co-trustee’s powers

In some states, where a co-trustee is temporarily unavailable or unable to act—because of illness, absence, financial incapacity, or other disqualification—statutes allow the remaining co-trustees to act to prevent harm to the trust property. In more serious situations, courts can:

• Suspend a co-trustee’s powers pending investigation or litigation.
• Appoint a special fiduciary to handle particular functions.
• Order specific conditions (such as regular accountings or co-signatures) to safeguard the trust.

5. Removal and Resignation of Co-Trustees

5.1 Voluntary resignation by a co-trustee

Sometimes the healthiest solution is for one trustee to step aside. Many trust documents spell out how a trustee may resign and how a successor is chosen. Where the instrument is silent, UTC-based statutes generally allow a trustee to resign by:

• Giving advance written notice (commonly at least 30 days) to the settlor (if living), co-trustees, and qualified beneficiaries, or
• Obtaining court approval, in which case the court may impose conditions to protect the trust property.

A resigning trustee’s liability for past acts is typically not erased by resignation, so it is important to ensure that records and accountings are up to date before stepping down.

5.2 Court removal for cause—especially when co-trustees cannot cooperate

Where a co-trustee will not resign and cooperation has broken down, beneficiaries, co-trustees, and sometimes the settlor may petition the court to remove a trustee. Grounded in UTC §706 and similar state statutes, common grounds for removal include:

• A serious breach of trust (such as misappropriation, reckless investment decisions, or persistent failure to account).
• Lack of cooperation among co-trustees that substantially impairs the administration of the trust.
• Unfitness, unwillingness, or persistent failure to administer the trust effectively.
• Substantial change in circumstances, combined with beneficiaries’ request and the availability of a suitable successor, where removal is not inconsistent with a material purpose of the trust.

Court removal is a serious remedy; judges are often reluctant to remove a trustee based on personality conflicts alone. But where hostility or deadlock truly harms the beneficiaries or frustrates the trust’s purposes, courts will act.

5.3 Strategic and relational considerations

Before pursuing removal litigation, co-trustees and beneficiaries should weigh:

• The cost and delay of court proceedings.
• The likelihood that mediation or a negotiated resignation could achieve a similar outcome with less damage to family relationships.
• Tax or administrative implications of changing trustees (for example, whether a corporate trustee is required under certain loan or investment documents).

An attorney experienced in trust litigation can help evaluate whether the legal and factual grounds for removal are strong enough to justify the conflict and cost.

6. Special Problem Areas in Co-Trustee Disputes

6.1 Sibling co-trustees and family dynamics

It is very common for parents to name adult children as co-trustees. Unfortunately, old sibling rivalries, differing financial philosophies, and perceived favoritism can turn routine decisions into emotionally charged battles. Commentary from practitioners and courts reflects that sibling co-trustee disputes are among the most common trust litigation scenarios.

In these cases, neutral professionals (corporate trustees, outside counsel, mediators) can be invaluable in shifting discussions from “Who is Mom’s favorite?” to “What does the trust require and what best serves all beneficiaries?”

6.2 Corporate and professional co-trustees

Corporate trustees bring experience, regulatory oversight, and established systems, but co-trustees may perceive them as rigid or overly conservative. Professionals—lawyers, accountants, financial advisors—who serve as co-trustees must also navigate strict conflict-of-interest rules. Ethics commentaries and case law illustrate that a law firm acting as co-trustee in multiple related trusts can face significant conflicts where decisions benefit one group of beneficiaries at another’s expense.

When serving alongside a corporate or professional co-trustee:

• Clarify in writing which decisions require joint action and which are within the institution’s delegated authority.
• Address conflicts of interest openly and early; consider independent counsel for beneficiaries where appropriate.
• Use formal communication channels (board-style meetings, written minutes) to ensure everyone is heard and decisions are well documented.

6.3 Co-trustees who are also beneficiaries

It is perfectly legal—and common—for a beneficiary to serve as trustee. But when multiple beneficiary-trustees disagree, the duty of loyalty becomes especially important. Courts and commentary emphasize that a trustee-beneficiary must still act in the interests of all beneficiaries, not just their own, and must avoid self-dealing or using their position to skew distributions or investments unfairly.

Where conflicts are severe, appointing an independent co-trustee or separating “distribution trustee” and “investment trustee” roles may reduce friction.

7. Drafting and Planning to Avoid Future Co-Trustee Disputes

7.1 Choosing the right number and mix of trustees

Good planning can prevent many co-trustee disputes. Consider:

• Odd versus even numbers: If more than one trustee is desired, three often works better than two, because many statutes permit majority rule, and three avoids built-in stalemate.
• Skill mix: Pairing a trusted family member with a corporate trustee, professional fiduciary, or experienced friend can balance emotional insight with technical expertise.
• Successor trustees: Naming clear successors and defining how replacements are chosen can limit battles over who steps in when a trustee becomes unable or unwilling to serve.

7.2 Clarifying decision-making, roles, and dispute mechanisms in the document

Settlor and drafting counsel can greatly reduce future disputes by specifying:

• Which decisions require unanimity and which may be made by majority.
• Whether any trustee has a tie-breaking vote on particular issues.
• How duties are allocated (e.g., “investment trustee” vs. “distribution trustee”).
• Whether a trust protector, advisor, or committee can resolve certain disputes.
• Whether mediation or arbitration is required before any party may file court proceedings.

7.3 Building in removal and resignation flexibility

Thoughtfully drafted trusts often address:

• Who can remove and replace a trustee (e.g., beneficiaries acting together, a trust protector, or a named individual).
• Objective grounds for removal (incapacity, non-residence, failure to account, etc.).
• Procedural steps for resignation that avoid the need for court approval in routine situations, while still protecting the trust property.

8. When to Involve a Lawyer—and How Joshua G. Curtis Law Can Help

8.1 Signs your co-trustee dispute has become a legal risk

You should seriously consider engaging counsel when:

• Co-trustees are deadlocked on a significant decision (sale of real estate, restructuring of a family business, major distribution) and deadlines are approaching.
• One trustee suspects another of misusing trust funds or withholding information.
• Beneficiaries are threatening litigation or alleging breach of fiduciary duty.
• A trustee wants to resign or have another trustee removed.
• There is uncertainty about how to interpret crucial trust provisions.

Ethics guidance from organizations like ACTEC underscores that these situations often involve complex conflicts of interest and that trustees and beneficiaries may need separate counsel.

8.2 How counsel can help resolve co-trustee disputes

An attorney experienced in trust and estate law can:

• Analyze the trust instrument and state law to clarify each trustee’s powers and duties.
• Help co-trustees adopt governance practices that reduce friction and create a defensible record of decisions.
• Facilitate negotiations and mediation among co-trustees and beneficiaries.
• Prepare and file petitions for instructions, approval of particular transactions, or removal/resignation of trustees where necessary.
• Represent a trustee or beneficiary in litigation if informal resolution is not possible.

8.3 Working with Joshua G. Curtis Law

At Joshua G. Curtis Law, we assist co-trustees, individual trustees, and beneficiaries with:

• Reviewing and explaining complex trust documents and governing law.
• Advising on fiduciary duties and risk management, including documentation and communication strategies.
• Designing practical solutions to co-trustee deadlock, from governance changes to adding neutral trustees.
• Pursuing or defending petitions for instructions, approval of actions, or trustee removal when litigation becomes necessary.

If you are serving as a co-trustee and feel stuck, overwhelmed, or exposed to potential liability, consider scheduling a consultation. The right advice at the right time can not only resolve the current dispute but also set up a healthier long-term framework for administering the trust in line with the settlor’s intentions and the beneficiaries’ best interests.

Sources

• Uniform Law Commission – Uniform Trust Code (UTC)
• Oregon Revised Statutes §130.610 (UTC 703) – Cotrustees
• 20 Pa.C.S. §7763 – Cotrustees (UTC 703)
• 20 Pa.C.S. §7766 – Removal of trustee (UTC 706)
• Massachusetts General Laws ch. 203E, §705 – Resignation of trustee
• Massachusetts General Laws ch. 203E, §706 – Removal of trustee
• ACTEC – What It Means to Be a Trustee: A Guide for Clients
• ACTEC Trust & Estate Talk – “Resolving Trustee Deadlocks”
• David F. Johnson, “The More The Merrier? Issues Arising From Co-Trustees Administering Trusts”
• Knox Law Institute – “Trustees: Fiduciary Duties, Removal, and Mechanisms to Prevent Calamity”
• Dean Mead – “Trustees Beware: Understanding Your Trustee Duties and How to Stay Out of Trouble”
• Blackstone Solicitors – Co-Trustee Disputes (practice commentary)
• Rechsteiner Law – “Top Reasons to Avoid Co-Trustees in a Trust”
• ACTEC Trust & Estate Talk – “Conflicts of Interest When Representing Fiduciaries”
• Buchanan Ingersoll & Rooney – “Breaking a Deadlock Among Trustees”
• Lake County Bar Association – “Keeping Trust and Estate Disputes Out of Court: Mediation”