As indicated earlier, the Trustor who establishes a Revocable Living Trust ordinarily serves as sole initial Trustee (as well as being sole beneficiary during his lifetime). That way, even though the Trustor gives title to his assets to the Living Trust, he retains sole control. If it is a couple establishing a Living Trust, then likewise the two of them usually start out as Co-Trustees.
Here, wealthy and elderly Nils has named nephew and CPA Lars as the Co-Trustee of Nils's Living Trust. Even though they are Co-Trustees with seemingly equal authority, their roles are radically different. Nils can really do anything he wants. He's accountable only to himself. If he makes a wrong move with his own money, who is going to sue him? He can take money out and waste it, or give it away. He can make dumb investments. The only person who can counter him is Lars, his Co-Trustee. And even then Nils could fire Lars as Co-Trustee, and amend the Revocable Living Trust to make himself (Nils) sole Trustee.
Lars on the other hand is a fiduciary, called upon to act responsibly with someone else's money. As we will see next week, this leads to an interesting contest between him and Nils.
So long as Nils allows Lars to remain Co-Trustee with him, Lars can counter Nils's actions. Generally if there are Co-Trustees the decision of a majority of them rules, but here (with only two), one may cause a standoff with the other. This necessity of agreement is reflected in a title company's usually requiring that, in a sale of trust real estate, both Co-Trustees sign.
Nils is willing to keep Lars on as Co-Trustee for a combination of reasons. Lars has proven himself capable, honest, and not very self-serving. Lars's being a relative makes the confidence stronger. And Nils realizes that, in his eighties and with a new wife, he might someday make a serious misstep with his finances. He is a spunky guy, though, and this spirit needs outlets. Lars knows that.