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OPINION: The imperative for reform in Public Trustee systems across Australia

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Lucy McPherson, Attwood Marshall Lawyers Estate Litigation Partner, discusses the systematic shortcomings of the Public Trustee system and underscores the urgent need for reform, particularly in New South Wales.

Behind every legal dispute lies a human story, and in my years of practice the ones that have left indelible marks are the ones involving clients who have been entrusted to the care of the Public Trustee, only to experience a saga of bureaucratic incompetence and financial exploitation that leaves them and their families in significant distress.

Members of the public seem to have blind trust in institutions like the Public Trustee. They assume that because the Public Trustee, in New South Wales at least, is a government body it can be trusted. But it’s my experience that that’s simply not the case.

Early on in my career when I was first handling estate disputes, I noticed a consistent occurrence where clients were aggrieved by this system. The matters crossing my desk were broad in terms of the issues involved, but the constant theme was the New South Wales Public Trustee and Guardian mismanaging its role as financial manager or executor, as well as issues around the trustee charging extortionate fees for its services.

I’ve continued to see the same issues crop up, again and again. This issue is not unique to New South Wales. Across Australia, Public Trustees operate with varying degrees of autonomy and funding structures, yet the fundamental problems persist.

When the Public Trustee is appointed a financial manager for individuals who have lost capacity or are found unable to manage their own affairs, it becomes a substitute decision-maker for someone who cannot make decisions for themselves. The Public Trustee can therefore wield significant power over the lives of those it purportedly serves. When the appropriate steps aren’t being taken to meet the demands of that role, the effect can be significant.

I’ve seen so many families of individuals with intellectual disabilities who are severely impacted by the incompetence of the Public Trustee system, underscoring the urgent need for accountability and reform in this space.

As a statutory agency, the NSW Public Trustee and Guardian is entitled to levy fees as stipulated by legislation. When acting as an executor of an estate these fees are significantly higher than solicitors’ fees, which are also regulated by legislation.

The practice of charging astronomical fees is inconsistent with the purpose of the Public Trustee, which is to protect and promote the rights of individuals who are the most vulnerable in our society.

In Queensland, where the Public Trustee Office is entirely self-funded, efforts have been made to address these issues through several reviews. The Public Advocate released a damning report in March 2021, providing recommendations in relation to fees, charges and practices of the Public Trustee in Queensland. Implementation updates are regularly published on the Advocate’s website.

The pace of reform remains sluggish, and the impact on the ground is limited. Still, the same steps should be taken in New South Wales.

In New South Wales, there has been a resounding silence on the need for a comprehensive review of the system, exacerbating the challenges faced by individuals who deserve redress for the dire straits they are put through in their dealings with the Public Trustee and Guardian.

Whatever the excuses, the system can be fixed if the right people start recognising the urgent need for reform.

This shouldn’t be a taboo topic, yet too many professionals are hesitant to speak out. We cannot afford to remain complacent in the face of systemic failures that perpetuate injustice and hardship, especially upon those most vulnerable in our society.

While the specific issues may vary from state to state, the overarching need for reform is undeniable and there are concrete steps that can and must be taken to improve the Public Trustee systems across Australia.

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Lucy McPherson

Partner
Estate Litigation

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Disclaimer
The contents of this article are considered accurate as at the date of publication. The information contained in this article does not constitute legal advice and is of a general nature only. Readers should seek legal advice about their specific circumstances. 

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