What Happens When Co-Trustees Disagree?
Your parents named you and your brother as co-trustees so that neither of you would feel passed over. Now you want to sell the house, he wants to rent it out, and the trust has been frozen for six months while the property taxes and insurance keep coming due.
What happens next depends on how many trustees there are and what the trust says. Under RCW 11.98.016, a power held jointly by three or more trustees may be exercised by a majority of them. The statute has no tie-breaker for two, so two co-trustees generally have to act together unless the trust provides otherwise. When they cannot, the deadlock is broken by agreement, by mediation, or by a superior court judge.
Start With the Trust Document
Washington's co-trustee rules are defaults. Under RCW 11.97.010, when the terms of a trust conflict with the trust statutes, the terms of the trust control. A well-drafted trust may say that either trustee can act alone on routine matters, that one named trustee has the final say on investments, or that a specific person breaks ties. If your trust has a clause like that, it governs. The rest of this article covers what applies when the document is silent.
Three or More Trustees: Majority Rules
With three or more trustees, RCW 11.98.016 lets the majority exercise any power the trustees hold jointly. The trustee who is outvoted is protected in two ways. A trustee who did not join in exercising a power is not liable to the beneficiaries or anyone else for the consequences. And a dissenting trustee who goes along with an act at the direction of the majority, like signing a deed because a title company wants every signature, is not liable for the consequences if that trustee expressed the dissent in writing to each co-trustee at or before the time of joining in.
Two Trustees: Both Must Agree
The majority rule in RCW 11.98.016 starts at three trustees. It says nothing about breaking a tie between two, and RCW 11.98.070 gives the statutory powers of sale, investment, and management to "a trustee, or the trustees jointly." With two co-trustees and a silent trust, a jointly held power takes both of them. Neither can sell the house, or rent it out, over the other's objection.
That is why naming two children as equal co-trustees, which feels fair at the kitchen table, so often ends in a standoff. It is worth thinking through before the trust is signed, as discussed in how to choose a trustee.
The Fifteen-Day Rule: Silence Counts as Approval
RCW 11.98.016 has a tool for the co-trustee who simply will not respond. If one trustee gives written notice to all other co-trustees of an action the trustee proposes, a co-trustee who fails to deliver a written objection within fifteen days from the date the co-trustee actually receives the notice is treated as having formally approved it. A co-trustee can opt out of this rule in advance by giving written notice that the fifteen-day provision is inoperative.
This rule cures unresponsiveness, not real disagreement. With two co-trustees who must act jointly, a timely written objection prevents deemed approval and leaves the disagreement unresolved. With three or more, an objection does not by itself defeat a valid majority decision.
Fixes Short of a Lawsuit
Several statutes offer ways out that the trustees and beneficiaries control themselves. Under RCW 11.98.016, an individual trustee may, with the co-trustee's consent, delegate any power, duty, or authority to that co-trustee by a signed, written instrument, which works when one sibling is willing to let the other run a particular area. The details are in can a trustee delegate their duties in Washington.
A trustee may resign without judicial proceedings under RCW 11.98.029 by signing a writing and filing it with the trust records. The resignation becomes effective upon discharge under RCW 11.98.041, so the trustee must complete the required notice and transition rather than simply stop acting. And under RCW 11.98.039, all parties with an interest in the trust may agree to add one or more co-trustees through a written binding agreement under RCW 11.96A.220. Adding a neutral third trustee turns a two-person standoff into a board that can decide by majority.
Why Doing Nothing Is Not Safe
A deadlock does not suspend anyone's duties. Each trustee still owes the beneficiaries prudent management under RCW 11.100.020, and a vacant house with a lapsed insurance policy is a loss in the making. RCW 11.98.016 also says nothing in it excuses a co-trustee from liability for failing to attempt to prevent a breach of trust. A stalemate that costs the trust money can become a claim against both trustees.
Mediation and Court Under TEDRA
When the trustees cannot get unstuck, Washington's Trust and Estate Dispute Resolution Act, chapter 11.96A RCW, supplies the process. An overview is in what TEDRA is and how it resolves estate and trust disputes.
Mediation is usually the first stop. Under RCW 11.96A.300, a party can require mediation by serving a written notice of mediation on the other parties. If no court hearing has been set, a party who objects must file a petition with the superior court and serve it on all parties or their virtual representatives within twenty days after receiving the notice. The court is directed to order that mediation proceed unless there is good cause not to. The mediation must last at least three hours unless the matter resolves sooner, and its costs are split equally among the parties.
If mediation fails, or the problem is urgent, either trustee can file a petition under RCW 11.96A.080. The matters a court can decide under that chapter include directing a trustee to do or to refrain from doing a particular act, so a judge can be asked to order the sale, order the rental, or set conditions on either. Under RCW 11.98.039, a beneficiary, a living trustor, or a trustee can also ask the court to change a trustee or co-trustee for reasonable cause. In any of these proceedings the court has discretion under RCW 11.96A.150 to award attorney fees against a party or from the trust.
Under RCW 11.96A.050, a trust proceeding may be brought in the county where a trustee or qualified beneficiary lives or where trust real estate is located. For many local families that means Snohomish County Superior Court in Everett.
A Worked Example
Ben and Claire are co-trustees of their late mother's trust, which holds her Mill Creek house and directs an equal split among Ben, Claire, and their younger brother. The trust is silent on disagreements. Ben wants to sell now. Claire wants to hold for two years. Because there are only two trustees, neither can act alone. Ben sends Claire a written proposal to list the house, and Claire objects in writing within the fifteen days, so there is no deemed approval. Ben then serves a notice of mediation under RCW 11.96A.300. At mediation the three siblings sign a binding agreement: the house is listed in the spring, and a professional fiduciary is added as a third co-trustee to break future ties. If mediation had failed, either trustee could have petitioned the court for instructions.
Break the Tie Before It Costs the Trust
A co-trustee deadlock rarely improves with time, and the beneficiaries usually bear the cost first. If you are a co-trustee who cannot get a decision made, or a beneficiary watching a trust sit idle, the Law Office of Chad Foster can help you choose the right tool. Call 425.785.8679 to talk with a Snohomish County estate planning and probate attorney.