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Unless your trust states otherwise, the co-trustees must act in unison on all decisions. If he did not get your consent for this decision, then the decision was not valid (not that your neighbor would know or should have known this) and your brother would be liable for correcting this problem that he had no right to give consent on.
It is grounds to go to court, if he will not now pay to correct the problem to prevent water from flowing towards the house, on the basis he made a unilateral decision which could cause harm to the estate
and as such he breached his duty to the trust. It is more likely than not the court will order him to pay to correct the problem rather than remove him for only one bad decision or breach of the trust. There is a 3 year statute of limitations in Iowa from the date of the breach of fiduciary duty.
If he has engaged in multiple breaches of duty to the trust and this is simply the icing on the cake, then yes, this would be part of the evidence that he is not looking out for the best interests of the trust.
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