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PODCAST: Families Forced to Take Legal Action Against Public Trustees

The ‘lure of a free Will’ and blind trust in Government trustee bodies has left many of our clients forced to consider legal action against Public Trustees, writes Wills & Estates Senior Associate Lucy McPherson.

Public Trustees are statutory, government bodies. There are Public Trustees in each state and territory in Australia. We predominately deal with the Public Trustees in Queensland and New South Wales.

The Public Trustee in each state primarily perform the role of trustee of deceased’s estates where no executor is appointed, or the executor declines to act (and no other person is appropriate). Some Public Trustees also provide a free or inexpensive service for drawing Wills, receiving significant remuneration upon administering the estate.

The Public Trustees also provide financial management services when individuals lose capacity or manage the estates of infants (such as in cases where they receive a damages settlement), prisoners, and others under a disability (legal or otherwise) when required.

Often the lure to the Public Trustee is a free or very affordable Will. In our experience, the Public Trustees entice people in with free or inexpensive Wills and charge exorbitant fees when the person dies and their estate is administered.

READ MORE: Lucy McPherson on ABC, ‘Man suing NSW Public Trustee over claim they altered mother’s Will’

READ MORE: Shocking Kingscliff death triggers call on NSW election candidates to back an inquiry

READ MORE: There’s No Such Thing as a Free Will – Beware of the Public Trust Office

Our experience is that the trustee, once in control, can be problematic and in some cases, clients have been required to take legal action against them.

In recent times our firm has developed a reputation for fighting cases against the trustees.

It is our experience that some members in our society place a lot of blind trust in Public Trustees because they are government bodies. Some will fall into the trap because of the word “trust” in their title but just because these bodies are government run does not necessarily mean that they are to be trusted.

We have experience in cases where clients have been forced to bring legal action against the Public Trustee for mismanagement or poor investment of client money.

For example, where the Public Trustee has been entrusted to manage the funds of a vulnerable individual and then failed to invest significant funds resulting in substantial loss to the individual’s overall financial circumstances.

‘Calls for Inquiry Following Death of Disabled Pensioner’, March 11, 2019.

We have been involved in another recent case where an 87-year-old, who was suffering hallucinations and cognitive decline, went to see the New South Wales Trustee and Guardian (‘NSWTG’) and appointed the NSWTG as executor of her Will. After she died the NSWTG proposed to charge significant fees for acting in the role as executor of her estate.

When she went to see the NSWTG she had what we considered to be a well-measured and sensible Will – appointing her only two children as executors and dividing her estate between the two of them. There was nothing that required changing. The Will was entirely appropriate for her situation.

Just prior to her death, at a time when medical reports demonstrated that she was suffering cognitive decline, the NSWTG took instructions from her to make a Will appointing the NSWTG as executor and trustee and leaving her estate to her two children. The only material change between the effect of the prior Will and the updated Will was the appointment of the NSWTG as executor and trustee of the estate in circumstances where the NSWTG is permitted by legislation to charge exorbitant fees that are significantly greater than the fees other professionals are entitled to charge during the course of administering an estate.

After she died, the NSWTG provided a fee estimate to the family of over $24,000 for obtaining a grant of Probate and administering the estate (which was estimated to be valued at $1.1 million), plus monthly administration fees.

NSWTG has a grossly unfair fee structure when acting as executor of an estate. When we compare the excessive fee estimate set out in the above scenario to the professional fees a solicitor is entitled to charge to obtain a grant of Probate in New South Wales, the result

‘Trust Issues: Pensioner Died in Squalid Conditions’, January 29, 2019.

is astounding. The professional fees a solicitor is entitled to charge to obtain a grant of Probate in New South Wales is set by legislation and is based on the value of the estate. For an estate of $1.1 million the costs for legal services for obtaining a grant of Probate are capped at $5,636.

It is clear that she did not have the capacity to understand the effect of the appointment of the NSWTG as executor in her Will (and in particular, the exorbitant costs that arise from this appointment). The NSWTG made only one material change to the Will when the NSWTG would have been aware that this change would have only benefited the NSWTG.

This situation caused the family significant heartache which was exacerbated when they asked the NSWTG to step down as executor of the estate, and their request was refused. The NSWTG was then entitled, under legislation, to move forward to obtain a grant of administration and administer the estate charging exorbitant fees in the process.

How Can Attwood Marshall Lawyers help?

Attwood Marshall Lawyers is a leading estate litigation firm, with experience in complex Public Trustee legal matters in all states. We can provide the following legal services for those experiencing problems with the Public Trustees:

  1. Assisting in matters involving the mismanagement of affairs under financial management orders
  2. Assisting in matters involving the mismanagement of estates where the Public Trustee has been appointed executor
  3. Assisting in negotiating the exorbitant costs and fees charged by the Public Trustees
  4. Applications to the Court to seek the Court appoint alternative trustees in the place of the Public Trustees

For all enquiries, contact Attwood Marshall Lawyer 24/7 call-back service on: 1800 621 071.

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Lucy McPherson

Lucy McPherson

  • Senior Associate
  • Estate Litigation
  • Direct line: 07 5506 8255
  • Mobile: 0400 230 522