Question about the duties of two co-trustees

Asked almost 2 years ago - New York, NY

A trust has two trustees.

It comes to light that the trust has not been paying state taxes on trust capital gains.

Question: Are both trustees equally responsible for this omission. If one trustee is passive and the other is the active administrator, is the passive trustee equally responsible.

In this case, the active trustee has died. I want the passive trustee to pay the penalties and interest on the back taxes out of his own personal funds not the funds of the trust. He is blaming the co-trustee who died for making the mistake because, he says, the deceased trustee controlled the trust administration of the trust during the time they were co-trustees..

Attorney answers (3)

  1. 4

    Lawyers agree

    Best Answer
    chosen by asker

    Answered . Both trustees have an equal fiduciary duty to manage the trust assets. Just being passive does not shield from liability. I would suggest consulting an attorney here. Good luck.

    Materials on this website have been designed to provide useful background information about Law Offices of Thomas... more
  2. 2

    Lawyers agree


    Answered . Unless specified otherwise in the trust documents, each trustee has equal responsibility and accountability.

  3. 2

    Lawyers agree


    Answered . I agree with my colleagues. Although Im licensed in NY, I practice in California. In California the code specifically provides that a co-trustee has a duty to seek to redress breaches of a co-trustee. There is no recognizable "Ostrich" defense.

    The general advice above does not constitute an attorney-client relationship: you haven't hired me or my firm or... more

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A trust is an estate planning tool in which you allow a third party (called a trustee) to hold your assets on behalf of your beneficiaries. Several types exist.

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A trustee is the person or legal entity who administers a trust according to the wishes of the person who set it up (as specified in the trust agreement).

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