When a trust ends up with three or more trustees, decision-making becomes more difficult, and the trustees are faced with a dilemma, do all trustees have to agree to sell property?
In cases like these, we first look at the trust document. Does the trust document provide a system for making decisions? If yes, these provisions in the trust document would be controlling.
However, more often than not, the trust document, as drafted, normally contemplates only one trustee (usually the grantor) where decision-making rests on one person. When two or more trustees are appointed and the trust document is silent on how decisions are to be made, New York law provides a solution under Estates, Powers, and Trusts Law (EPTL) § 10-10.7.
If you are in a situation where you are asking do all trustees have to agree to sell property, it is likely that you need an attorney. We at the Law Offices of Albert Goodwin are here for you. You can call us at 718-509-9774 or send us an email at firstname.lastname@example.org.
New York law on multiple trustees (fiduciaries)
EPTL § 10-10.7 states that, when there are two trustees, the power is to be exercised by them jointly. In this case, both trustees have to agree to sell the property. However, if there are three or more trustees, the power to decide to sell the property rests upon the majority. A disabled or absent trustee who did not take part in the decision or a dissenting trustee who expressed his dissent in writing to his co-fiduciaries will generally not be liable for the consequences of the majority decision.
When multiple trustees make a decision regarding the administration of a trust, it is always recommended to document this decision in writing and have the trustees who are approving the decision sign the document. This would prevent any trustee from denying or disclaiming their approval in the future. Usually, this document is embodied in the form of a resolution executed by the trustees.
Decision-making of multiple trustees as a practical matter
Selling property, whether real estate or shares of a company, requires many small decisions leading up to the sale. When there are multiple trustees who are all co-heirs and beneficiaries of the trust, it becomes difficult to make these small decisions, especially when these multiple trustees live in different states. It becomes even more difficult when other family issues and drama burden the decision-making process of selling the property, such as co-trustees who are co-heirs that are not talking to each other and have animosity towards each other.
These small decisions, such as hiring an appraiser, getting a broker, determining the fair market value, deciding to put the property for sale, accepting offers, or retaining lawyers, can be difficult to make when there are multiple trustees. It is almost impossible to get unanimous approval, but a majority vote is easier and feasible. When making decisions, where there is an acrimonious relationship between or among some trustees, ensuring that you have a signed resolution before taking any more steps forward will insulate the majority trustees from further litigation in the future. A resolution signed by the majority of the trustees in each and every step of the way will be evidence of the majority decision and will prevent a trustee from denying or disclaiming his decision in the future.
To sum up, in New York, do all trustee have to agree to sell property? No. A majority of trustees is enough.
A trust with multiple trustees who are co-heirs and beneficiaries can be a complicated matter. More often than not, these trustees are confused on how to proceed with their decision-making process and organize it in a documented manner. A lawyer with expertise on trust issues can help you in this case. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at email@example.com.