A trustee can escape liability for a prohibited act of beneficiaries of the trust if the beneficiaries consent to the trustee’s act with full knowledge and capacity to act, because the beneficiaries can ratify the trustee’s act. However, it may be unclear whether a co-trustee can ratify the other co-trustee’s prohibited act.

The Colorado Court of Appeals held in In re Estate of Foiles that unless there is a trust provision to allow a co-trustee to ratify a prohibited act of the other co-trustee, all of the beneficiaries must consent with full knowledge of the facts to ratify such act.

See In re Estate of Foiles.

Posted by Jin Keol Park, Associate Editor, Wealth Strategies Journal