In many cases, people name more than one person to act as a fiduciary as part of their estate plans. This can happen when someone creates a trust or signs a power of attorney. It can also happen when naming executors in a will.
There are benefits to naming co-fiduciaries, but there are also risks. Choosing the right arrangement can protect the estate or create conflict, depending on the situation.
Advantages of naming co-fiduciaries
Naming more than one fiduciary can provide checks and balances. If two people must work together, one may catch mistakes that the other one misses. This can help prevent misuse of money or power. Co-fiduciaries can also share the workload. Managing an estate, trust or financial affairs can take time. Two people may finish tasks faster and reduce stress.
Another benefit is equal treatment of family members. Some parents name two adult children as co-trustees or co-executors to avoid hurt feelings. This can show fairness and build trust within the family.
Disadvantages of co-fiduciaries
Disagreements between co-fiduciaries can slow down important decisions. If both must agree before taking action, even small tasks can take longer. In some cases, strong differences in opinion can lead to court involvement.
Another risk comes from confusion about duties. If the estate plan does not clearly define each person’s role, one fiduciary may assume the other will handle a task. This can result in missed deadlines or poor recordkeeping. Texas law allows fiduciaries to act together or alone, depending on the phrasing of the estate plan. If the plan does not explain how co-fiduciaries should act, legal issues may develop.
Naming co-fiduciaries can work well if the people named communicate clearly and share similar values. However, if the people do not work well together or live far apart, it may be better to name one person. When setting up an estate plan in Texas, think carefully about how well co-fiduciaries will cooperate and follow through on their duties.