Member FDIC Traci Oliver Eric Hallman Tara Koester Bankers’ Bank of the West We champion Community Banking bbwest.com | 800-873-4722 www.bbwest.com YOUR NEBRASKA RELATIONSHIP MANAGERS As a bankers’ bank we strive to help with every level of service and expertise. That is why we service anything from loan participations, merchant services, ATM/debit and much more, because we aim to answer your questions with, “…yes, we can do that too!” 5. Co-trustees and Caution Setting up a trust with co-trustees or serving on a trust as a co-trustee can be a good check on the actions of the other trustee and to be sure actions comply with the terms of the trust and the grantor’s intent. See In re Hunt, Case No. A-22-499, 2023 WL 3185514 (May 2, 2023) (unpublished). In some instances, though, courts recognize that co-trustees can be detrimental. In a Feb. 2, 2024, decision, the Nebraska Supreme Court recognized a complicated dynamic between the siblings in the case, describing that the siblings “are incompatible as co-trustees, and the record shows that administration of the trusts was chaotic and contentious.” The appellate court ultimately affirmed the trial court’s decision of removing both co-trustees for violating their fiduciary duties but found that the “hostile relations” with the beneficiaries and “lack of cooperation” between the two would be sufficient to remove the trustees even without breach of any fiduciary duties. This dynamic would hopefully not be the case with a corporate trustee, but those family dynamics can affect even a neutral corporate trustee. Staying neutral (while true to the trust terms) but empathetic can help the corporate trustee diffuse a tense family dynamic. Lesson: Be aware of the dynamics with any co-trustees and beneficiaries, but use the role as co-trustee to protect the grantor’s intent and ensure compliance with the trust terms. There is often a reason that a corporate co‑trustee would be named (to protect assets, to provide a back‑stop against undue influence, to provide a business perspective, etc.), which should help guide the trustee. More guidance will surely be coming from Nebraska courts in the coming months, but the latest decisions emphasize the importance of understanding the trust and acting with common sense while always keeping the fiduciary duties in mind. These recent cases also emphasize that corporate trustees can be a valuable addition to a trust and in the trust administration process. 17 NEBRASKA BANKER
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