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Do All Trustees Have to Agree to Sell Property?
When a trust ends up with three or more trustees, decisions get harder, and sooner or later the trustees face the question: do all of us have to agree to sell the property?
We start with the trust document. If it provides a system for making decisions, those provisions control. More often than not, though, the document was drafted with a single trustee in mind, usually the grantor, and says nothing about how several trustees are to decide. When two or more trustees are serving and the document is silent, New York law supplies the answer in Estates, Powers and Trusts Law (EPTL) § 10-10.7.
New York law on multiple trustees
Under EPTL § 10-10.7, when there are two trustees the power must be exercised by them jointly, so both have to agree to sell the property. When there are three or more trustees, the power to decide rests with the majority. A disabled or absent trustee who took no part in the decision, or a dissenting trustee who expressed the dissent in writing to the co-fiduciaries, will generally not be liable for the consequences of the majority’s decision.
So, in New York, do all trustees have to agree to sell property? No. Two trustees must act together, but among three or more, a majority is enough.
Whenever several trustees decide something about the administration of a trust, the decision should be put in writing and signed by the trustees who approve it, usually as a resolution. That stops any trustee from later denying or disclaiming their approval.
Why this matters in practice
Selling property, whether real estate or shares in a company, requires many small decisions on the way to the sale: hiring an appraiser, choosing a broker, settling on a fair market value, deciding to list the property, accepting an offer, retaining lawyers. When the trustees are also co-heirs and beneficiaries, live in different states, or are not on speaking terms, each of those small decisions becomes hard. Unanimity is nearly impossible in that setting; a majority vote is feasible.
Where relations among the trustees are acrimonious, a signed resolution before each further step insulates the majority trustees from litigation later. The resolution is evidence of the majority decision and prevents a trustee from disclaiming it afterward.
What a trustee resolution should contain
A resolution should be in writing, not an oral understanding. It should describe the specific action being authorized, carry the signatures of every trustee who approves, and be dated. It should note any trustee who objected or was absent, and it should attach the documents that support the decision: the appraisal, the valuation, the offer, or whatever else the trustees relied on. A resolution in that form protects the approving trustees from a later claim that they never authorized the action, and it documents the decision-making process for any later review, including an accounting.
How a dissenting trustee protects himself
A trustee who does not want to be associated with the majority’s decision must communicate the dissent in writing to the other trustees, say specifically what action is being objected to and why, and keep copies. If the majority’s action is improper, the dissenting trustee should consider petitioning the court for relief. A documented dissent protects the dissenting trustee from liability for what the majority does; without it, silence can be taken as approval.
When the trustees cannot agree at all
When co-trustees reach an impasse, the court can be asked to step in. Court intervention is a last resort, but sometimes it is the only way forward.
| Option | What it does |
|---|---|
| Petition for direction | Asks the court to direct a specific action. |
| Petition for instruction | Asks the court to interpret the trust’s provisions. |
| Petition for removal | Seeks removal of a co-trustee who is obstructing the administration. |
| Petition for an accounting | Asks the court to require a co-trustee to account, which often resolves a dispute about information. See our accountings page. |
| Mediation | Court-ordered or voluntary mediation to resolve the dispute without a decision imposed by a judge. |
The disagreements that most often bring co-trustees to that point are familiar: a conservative versus a growth-oriented investment strategy, whether to distribute now or wait, the fair market value of a particular asset, whether and when to sell and at what price, how to respond to a beneficiary’s request for a distribution or information, which attorneys and accountants to use, and how detailed the records should be.
What a well-drafted trust says about multiple trustees
A trust drafted with several trustees in mind heads off most of these fights. The provisions that do the work are these.
| Provision | What it does |
|---|---|
| Decision-making rule | Says whether decisions need unanimous, majority or some other approval. |
| Tiebreaker | Names a particular trustee or a third party to break ties. |
| Allocation of authority | Gives one trustee authority over investments and another over distributions, for example. |
| Successor trustee | Says what happens if a co-trustee resigns, dies or is removed. |
| Removal mechanism | Lets a co-trustee be removed without a court proceeding. |
| Mediation or arbitration clause | Requires dispute resolution before anyone goes to court. |
A trust drafted without any of this leaves the trustees to work it out themselves, often in court. Better drafting up front prevents the problem.
The trust protector
Some trusts include a trust protector with limited but important powers: to remove and replace trustees, to modify administrative provisions, to resolve disputes among the trustees, to change the governing law or situs, and other specific powers suited to the trust. The protector provides a check on trustee behavior without taking direct fiduciary responsibility for the assets, and the role is especially valuable in a long-term trust where the original trustees may not always serve effectively.
Resignation as a way out
When a co-trustee finds the situation untenable, resignation may be the right answer, and it is often preferable to continued conflict. The trust document’s resignation procedure must be followed, a successor trustee should be in place before the resignation takes effect, and in some circumstances court approval is required. The resigning trustee remains responsible for what was done during their service and should account for that period before leaving.
Working together as co-trustees
Co-trustees who succeed tend to do the same things: they set up clear lines of communication early, meet regularly about trust matters, record their decisions in written resolutions, bring in professional advisors for a neutral view, follow the trust document’s procedures faithfully, stay respectful when they disagree, seek mediation or counsel when they reach an impasse, and treat every beneficiary fairly regardless of family dynamics.
Talk to us
A trust with multiple trustees who are also heirs and beneficiaries can be a complicated matter, and the trustees are often unsure how to organize and document their decisions. If you are one of several trustees trying to sell trust property, or a trustee who disagrees with what the others want to do, call 212-233-1233 or email [email protected].
About the Author
Albert Goodwin Esq. is a licensed New York attorney with over 18 years of courtroom experience. His extensive knowledge and experience make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
