Should I name my children as “joint” or “co” successor trustees? (Episode #294)

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Well, good afternoon, michiganers.
It is Tuesday, January twenty third,

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twenty fourteen, and of course this
is Tuesday with Tom, Michigan's only weekly

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podcast where we do answer your questions
about estate planning and a state settlement in

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Michigan. As always, I'm your
host, Tom Doyle, the state planning

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attorney, lifelong Michigan resident, an
ambassador for all things good in this great

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state of Michigan. Welcome, Welcome, Welcome to today's program. Just a

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Last week's episode was to be prepared
for when Trump's tax cuts expire next year

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and taxes for most Americans will increase. Now's the time to be looking ahead

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to twenty twenty six, when perhaps
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mainly because a lot of the tax
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twenty six, it will be too
late. So you need to look at

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now, talk to your tax advisor, see what options you might have to

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avoid or to minimize what effect it's
going to have on you in twenty twenty

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six. Today's topic, it's a
question that we are freakingly answered by clients,

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including one that I was just working
on with this last week. Should

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I name my children as joint or
co successor trustees? Well, please remember

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that what I'm about to discuss during
the program. As always is only for

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educational purposes. It is not intended
to be legal advice. You need to

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work with your attorney to determine what
is appropriate for you and your estate plan.

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Should I name my children as joint
or co success or trustees? I

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did have an episode, I think
it was a couple of years ago on

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the topic of having joint trustees.
But time's gone by and we're going to

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focus a little bit more on when
you're thinking about your children and how you're

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going to be naming them under your
trust. So when it comes to naming

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the children under a trust, or
maybe it's going to be personal representative in

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your will or agents under your power
of attorney, we often are asked,

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should you name your children as joint
or co Well, the norm if you're

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not going to do that is in
the alternative. So if you think about

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it in the alternative, would say, for example, maybe I name my

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son Kevin as my first successor trustee, but if Kevin is unable or unwilling

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to serve, then I name my
daughter Maureen as the alternate. That's a

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an alternative arrangement that many clients are
going to have under their estate plans that

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might apply, as well as personal
representatives in your will or agents under powers

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of attorney. But let's say you're
thinking about maybe what I want to do

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is make Kevin and Moreen work together
as trustees. In that case, we

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need to look at that and decide
are they going to be joint and we'll

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talk about what that means or are
they going to be co. But before

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we get to answering that question,
the first question that I would have,

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or that Amanda would have if you're
thinking about doing that, is how well

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do the children that you are thinking
naming joint or CO get along? Because

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if they don't get along, then
you should never consider a joint or CO

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because you're simply asking for heartache and
grief and difficulty in settling your trust because

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if they're joint or CO, they
need to work together irrespective of which of

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those designations. So if your kids
don't get along, we would suggest that

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you don't consider going with the joint
or co success or trustees. But if

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they do, if they get along, or perhaps you're in a second marriage,

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you each have children from the previous
marriage, you want to make sure

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that there's a process where a child
from each family, if you will,

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is overlooking what's going on and they
do get along. Because again, even

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if they don't get along, you're
asking yourself for trouble. You might look

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at a joint or co So what
is the difference? Okay, well,

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joint trustees When two or more of
the children are serving as joint trustees,

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than any action that they take needs
to be taken together. Whether that's two

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children joint, three children joint,
doesn't matter how many children are making joint.

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But if you're going to make them
joint, then they have to do

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everything together. For example, let's
say that there is real estate to be

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sold and the trustees tasked after your
death was selling real estate. If you

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have joint trustees, then all of
the joint trustees two, three, four,

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however many you have, are going
to have to execute any documents that

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are going to be necessary to list
the property for sale, to sell the

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property ultimately, so everybody is going
to have to be involved in signing paperwork.

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If they go to a bank and
they're going to be dealing with a

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bank, the bank is going to
require that all of the joint trustees are

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signing everything together. That's signing to
take money out of account, signing to

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pay bills, et cetera. The
alternative is what we call CO trustees.

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If you make the children CO trustees, that means essentially they're all equal and

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any one of them can take any
action that needs to be taken by a

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trustee without involving the others. So, again, looking at that real estate

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situation, if you have CO trustees, then it only takes one of them

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to execute any documents to list the
real estate. It only takes one of

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them to be dealing with the bank
account. Essentially, the concept behind CO

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is saying to your children that you've
named as CO. You guys, figure

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out who's going to do what.
You all have equal authority. You figure

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out between you who's going to open
bank accounts, who's going to sell real

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estate, et cetera. One of
the considerations other than whether or not they

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get along, though, if you
think about is distance can present a problem.

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If you have a considerable distance between
where your children live and you're thinking

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about joint making them work together.
That's an example perhaps of where CO might

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be a better alternative, so that
you're not requiring them to figure out how

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they're going to handle the distance between
them. Are they gonna have to be

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emailing documents back and forth? Are
they going to be faxing documents? How

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is all that stuff going to be
taken care of? So even where your

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children get along, the distance that's
involved with them might in fact impact the

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decision about what you decide about whether
you're not going to make them joint or

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co. Now that same consideration doesn't
just apply to the trustee of your trust.

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You also have a will. You
have personal representatives under your will.

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If you're going to aim multiple children
as your personal representatives, do you want

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them to again be in some order, i e. This child first,

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and if that child can't do it, then this child. Do you want

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to make them joint where they both
have to do everything together in order to

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settle that estate, or do you
want to make them co so that either

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or any of them can do whatever
it's necessary regarding the tasks in settling that

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estate. Same thing under powers of
attorney, you're becoming capacitated. You have

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powers of attorney. You're naming children
to manage and pay your bills for you,

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file your income tax returns, et
cetera. Same consideration alternative this one

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first that one next or joint they
have to operate together or co where any

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of them can do it. And
the same consideration does apply if you're going

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to name more than one child under
your health care power of attorney, this

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child can make medical decisions for me
if they can't and this child is next.

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Again, do you want children to
act jointly or not to? Do

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you want them to act as co
Generally speaking, we don't recommend having joint

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agents under a health care power of
attorney. The problem is that if medical

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treatment is needed for you, the
doctor is then going to have to be

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in communication with all of the joint
agents before rendering any treatment. And if

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all of the joint agents don't agree
upon what the course of the treatment is,

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now you have a situation where you
need medical decisions to be made for

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you, perhaps quickly, and because
a doctor either is enable to get hold

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of the joint agents or the joint
agents all don't agree, that will impact

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the health care decisions that are made
for you. So generally speaking, we

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don't necessarily have an issue if the
children get along and distances isn't a problem.

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If you want to look at joint
under a trust or joint under your

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will, or joint under your health
care power attorney, even joint under funeral

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arrangements, if that's what you're going
to do, but we certainly would caution

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you to reconsider making them joint under
your health care power of attorney. Now,

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whatever you decide, whether they're going
to be alternates, whether they're going

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to be joint, or whether they're
going to be co, you need to

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make sure that your documents are clear
when you have multiple multiple what we call

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fiduciaries, that's the legal term that
talk to that as a trustee or a

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personal representative or agents under your powers
of attorney. If you're going to have

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multiple fiduciaries, you need to make
sure that your documents are clear as to

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whether they're joint and have to work
together or our co with the ability of

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any of one of them to work
with the other. Because what we find

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generally with banks and other financial organizations, if you simply name multiple fiduciaries,

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you say my son Kevin and my
daughter Maureen, they are going to treat

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that as joint, meaning they both
have to work together unless the documents clearly

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indicate that they have authority to act
independently and in our situation. What Amanda

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and I do is, if you're
going to have them as co our documents

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are going to have language in them
indicating and confirming that any one of them

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can act independently of the other.
Of course, Amand and I would be

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honored to have the opportunity to help
you protect your loved ones by either putting

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together your state plan, perhaps a
mending of plan that you already have,

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or assisting you and settling in a
state. And certainly if we're going to

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be putting together that estate plan for
you or amending, we can have that

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conversation. If you're going to consider
making children or even people who aren't children

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as joint or co fiduciaries, but
if we can be of assistance to you,

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please go to our website, which
is Doyle LAWPC dot com. There

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you're going to find information on how
to schedule an appointment with us. It

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might be a virtual consultation zoom or
telephone, depending upon wherever you happen to

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live in the state of Michigan,
or it might be an in person consultation

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at our New Eastland and Saying office. So go to the website. You're

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going to find information on how to
schedule a consultation, how to send information

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ie documents and data to us that
we are going to need as part of

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that consultation. A reminder too,
if you're simply looking for an individual document,

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maybe all you need is a certificate
of trust because you're looking at selling

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real estate that's owned by a trust. Head on over to our legal store,

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which again is at DOYLELOWPC dot com
and there you are going to find

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the legal store where you have the
ability to order documents online without the need

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to schedule a consultation. Now you're
going to submit information to us. We

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are going to review that information and
once we review it will determine do we

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need to talk to you or do
we have everything that required. But essentially

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you can order individual documents online.
Again, all of that is available at

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Doyle Law PC dot com. Well, that's going to be it for today.

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As always. Ooh, if you
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Tom. Well, thanks again for
spending seven of your time with us today

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and as always, I hope that
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week in Michigan. Stay safe.
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