Seniors and Trusts: Should We Also Name a Co-Trustee?

“Alice” and her husband “Andrew” had a very good question about appointing a Successor Trustee for their Living Trust. At 80, Alice had been diagnosed with cancer, and she was still very weak after months of chemotherapy. Andrew was 85 and dealing with a number of health problems. He had had a stroke a few months ago and was now partially paralyzed. They were getting stronger and were able to live independently in the family home. Their daughter, Olivia, lived close by in Walnut Creek, called her parents every day and visited at least once each week.

When creating a Living Trust, couples generally serve as each other’s Trustees

Couples typically serve as each other’s Trustees and don’t generally name another Co-Trustee. In Alice’s case, however, she was reluctant to burden Andrew with this responsibility, and her cancer had left her feeling vulnerable. She decided to name Olivia as Co-Trustee to help pay bills and manage their Trust’s assets if it became necessary.

Co-Trustee agreement set up at financial institutions

Alice and Olivia went to the couple’s banks and Olivia was added to all of their Trust’s bank and brokerage accounts, in her capacity as co-Trustee of the Living Trust. Importantly, these accounts still belong to Alice and Andrew; Olivia is essentially like a trusted hired co-manager who is tasked with controlling the assets along with Alice. Olivia has a fiduciary duty to work in the best interests of Alice and Andrew.

These financial institutions also issued new checks indicating that Olivia had been added as a Co-Trustee. Olivia will be able to manage and monitor the accounts as well as pay bills from these accounts. By naming Olivia now as a precaution, she can begin taking a more active role as the need arises.

Additional benefits of adding a Co-Trustee: Protection against elder abuse

Many seniors have lost significant assets through fraudulent scams of elder abuse. Appointing a trusted family member or friend as Co-Trustee to monitor accounts can help eliminate this kind of scam. Note that the Co-Trustee does not have the power to amend or revoke the Revocable LivingTrust, and the authority invested in this role can be managed according to the agreement that is created.

A big part of end-of-life planning is creating a Living Trust, and many of our clients make this one of their New Year’s resolutions. Schedule an appointment today at one of our three Bay Area offices. Our dedicated team is helpful, compassionate and affordable.