Two of Your Three Cotrustees Can Outvote You. Voting No Does Not End Your Responsibility.

Naming all three children was supposed to be the fair thing

It usually is. It is also the arrangement that produces the most calls, because the document that named three cotrustees rarely says what happens when they split two to one — and the people who have to live with the answer are siblings.

Minnesota supplies the default. Minn. Stat. § 501C.0703(a):

Cotrustees who are unable to reach a unanimous decision may act by majority decision.

Unanimity is the aspiration, not the requirement. Two of three carries.

This is a default rule. Under § 501C.0105(a), the chapter governs “[e]xcept as otherwise provided in the terms of a trust,” and cotrustee decision-making is not on the mandatory list in paragraph (b). A trust can require unanimity, give one cotrustee the deciding vote on a category of decisions, or split authority by subject. Read the document before assuming the majority rule applies.

Nobody gets to sit it out

Paragraph (c) forecloses the passive cotrustee:

A cotrustee must participate in the performance of a trustee’s duties and powers unless the cotrustee is unavailable to perform the duties or exercise the powers because of absence, illness, disqualification under other law, or other temporary incapacity or the cotrustee has properly delegated the performance of the function to another trustee.

“Must participate.” The cotrustee who signs whatever arrives and asks nothing is not complying with paragraph (c), and the excuses it recognizes are narrow — absence, illness, legal disqualification, temporary incapacity, or a proper delegation.

That delegation is authorized by paragraph (e): “A trustee may delegate to a cotrustee the performance of any duties or powers as prudent under the circumstances. Unless a delegation was irrevocable, a trustee may revoke a delegation previously made.” Two limits worth noticing. It must be prudent under the circumstances — a blanket handover of everything to the sibling who lives nearest is not obviously that. And it is revocable by default, which means the trustee who made the delegation can take the function back.

When somebody is missing

Two paragraphs keep a trust running when a cotrustee cannot act.

Paragraph (b): “If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.” A resignation or death does not freeze administration.

Paragraph (d) handles temporary unavailability, and adds a condition that (b) does not have. Where a cotrustee is unavailable because of “absence, illness, disqualification under other law, or other temporary incapacity,” the remaining cotrustee or a majority of them may act only if —

prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property.

That last clause is the whole paragraph. A vacancy lets the others govern generally. Paragraph (d) lets them act on a temporary absence only where prompt action is needed. Two cotrustees who restructure the portfolio while the third is hospitalized are not obviously inside paragraph (d).

The half of the rule everyone knows

Paragraph (f) is what dissenting cotrustees are usually told:

Except as otherwise provided in paragraph (g), a trustee who does not join in an action of another trustee is not liable for the action.

Vote no, and you are not on the hook for what the majority did. As far as it goes, that is right.

The half that gets left out

The exception in paragraph (f) points at paragraph (g), and paragraph (g) is an affirmative duty:

Each trustee shall exercise reasonable care to:

(1) prevent a cotrustee from committing a serious breach of trust; and

(2) compel a cotrustee to redress a serious breach of trust.

Prevent and compel are verbs about doing something. Where the majority is committing a serious breach, the dissenter’s obligation is to act — and paragraph (g) does not specify how. The standard it sets is reasonable care; it names no particular method. Demanding in writing that the transaction stop. Refusing to release funds under the trustee’s control. Notifying the beneficiaries. Petitioning the court. Resigning, in some circumstances, though resignation alone does not redress a breach that already happened.

The statute reserves this for a serious breach. Ordinary disagreement about investment strategy, distribution timing, or whether to sell the cabin is what paragraph (a) exists to resolve, and paragraph (f) means the dissenter is “not liable for the action” the majority took. That is protection against the majority’s act. It is not a release from the duty paragraph (c) puts on every cotrustee to participate.

The trustee who goes along

Paragraph (h) covers the cotrustee who thinks the decision is wrong but signs anyway to keep the trust moving:

A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified any cotrustee of the dissent at or before the time of the action is not liable for the action unless the action is a serious breach of trust.

Three conditions, all of which have to hold. You joined at the direction of the majority — not because you were persuaded. You notified a cotrustee of the dissent — the statute requires notice to a cotrustee, not to beneficiaries or a court. And the notice came at or before the time of the action — an objection recorded afterward does not qualify.

Then the same ceiling: the protection stops at a serious breach. Paragraphs (f), (g), and (h) all converge there.

Five things that decide a cotrustee dispute

Taken together, § 501C.0703 turns a cotrustee dispute on a short list of facts. Four of the five below come from that section. The last comes from outside it.

What the instrument says. Majority rule is a default a trust may displace, so whether paragraph (a) governs at all is answered by the document rather than by the statute.

When the dissent was recorded. Paragraph (h) turns on notice to a cotrustee “at or before the time of the action.” A contemporaneous record and a later recollection are not the same evidence, and the paragraph draws its line at the moment of the act.

Whether the breach is serious. This is the hinge of the section, and paragraphs (f), (g), and (h) all converge there — (g) and (h) on their face, (f) through its opening cross-reference to (g). Below that threshold, declining to join answers liability for the action itself. At or above it, paragraph (g)’s affirmative duties are running, and inaction becomes the dissenter’s own breach.

Whether a delegation was prudent. Paragraph (e) authorizes delegation “as prudent under the circumstances” and leaves it revocable unless made irrevocable. What it describes is an allocation of work, not a transfer of the responsibility paragraph (c) imposes on every cotrustee.

How long exposure lasts. This one is not in § 501C.0703. Under § 501C.1005, a beneficiary who was sent a report that adequately disclosed a potential claim has three years from the date it was sent. Where that paragraph does not apply, the fallback is six years from the first of a trustee’s removal, resignation, or death, the termination of the beneficiary’s interest, or the termination of the trust. A cotrustee’s exposure does not close when the disagreement does.