Attwood Marshall Lawyers Legal Practice Director, Jeff Garrett, continues his discussion with Steve Stuttle on Radio 4CRB about the findings of the Public Advocate’s Review of Queensland Public Trustee.
Attwood Marshall Lawyers have seen a significant rise in Public Trustee disputes, where we once received 2-3 enquiries per week in relation to a Public Trustee matter, we are now seeing 2-3 or more enquiries each day from people who are involved in a dispute with either the Queensland Public Trustee or NSW Trustee and Guardian.
The complaints received have a common theme; family members who are frustrated by being unable to communicate with, or unable to get any information from, the Public Trust Office, as well as reports of the mismanagement of the affairs of loved ones, who are meant to be looked after by the Public Trust Office. However, the most disturbing feature is the fees charged by state government Public Trustees to the vulnerable people they are supposed to be protecting and the lack of any scrutiny as to how these fees are calculated and charged.
Exorbitant fees being charged
The Public Advocate’s Review: “Preserving the financial futures of vulnerable Queenslanders” commenced after an ongoing outcry from families, institutions, lawyers, doctors and other people in the community for many years. The report vindicated these concerns and highlighted the shortfall in the Public Trustee’s legal and fiduciary duties owed to people in need of protection and the exorbitant fees they were charging. Not only was the Public Trustee failing to properly protect and manage the affairs of these vulnerable people, they were charging grossly excessive fees for this failure.
In 2019-20 the QLD Public Trustee provided financial management services to 10,071 Queenslanders, including 9,316 people under and administration appointment by Queensland Civil and Administrative Tribunal (QCAT). The Public Trustee has significant power over its administration clients.
As a financial manager, the Public Trustee can pay household bills, buy and sell property, run a business, enter into contracts, apply for government benefits, make business decisions, and manage investments.
The Public Advocate’s review was undertaken to explore concerns raised by people under administration and their families and supporters, about the level and types of Public Trustee fees being charged, and the negative effect these were having on financial outcomes for the people under administration.
The Queensland Public Trustee charge fees based on a percentage of the value of the assets under their management, in addition to annual fees. In many cases they double up on several fees that they charge.
The review strongly focused on Public Trustee clients who had a modest asset pool. A modest asset pool may consist of:
- a family home;
- superannuation fund;
- term deposit account; and
- a pension income.
For many people who fall under this category, the fees they were being charged, in combination with regular living expenses, exceeded their income, requiring them to spend their cash assets and resulting in the erosion of their assets over time.
In managing a modest asset pool, the estimated fees charged by the Public Trustee were up to $20,000 per year. If someone is in relatively good health and not too old, you can expect that the Public Trustee may manage their affairs for many years, and you can see how it doesn’t take very long for those assets to be watered down and taken in fees over time.
At Attwood Marshall Lawyers, we have seen many cases where people have experienced this very scenario; where the Public Trust Office have got to a stage where they have had to sell properties or other assets in order to pay their own fees. It is an outrageous breach of their duty to the protected person and a flagrant conflict of interest.
In a recent matter, one of our clients, whose partner died in 2017, had a Will which had been made by The Public Trustee, and the Public Trustee had been appointed as the executor of the estate, something they encourage their clients to do when offering their “free Will” service .
Our client was left 90% of his partner’s estate in her Will. The deceased owned a unit in Sydney which was the only asset of the residuary estate.
In addition to the unit, the deceased had two bank accounts which she gifted to her niece and nephew.
For the past 30 years, our client had lived with his partner in the unit in Sydney and continues to reside there. He is unwell and his wishes are to remain in his home.
We recently were made aware that the NSW Public Trustee and Guardian are charging the estate $73,000 in fees. These fees relate to the administration of the estate, which only consists of two bank accounts and the unit. The bank accounts had a value of $68,000 – which is less than NSW Trustee and Guardian’s fees. In order for NSW Trustee and Guardian to claw back their fees, they issued our client with a notice to vacate his home so that they can sell the property to recover their fees and pay out the other beneficiaries.
To rub salt in the wound, for each year the estate is ‘unadministered’, NSW Trustee and Guardian intend to charge approximately 8% of the value of the estate in maintenance and administration fees on top of legal work.
In another matter involving NSW Trustee and Guardian recently, where they were charged with administering an estate involving a family home, investment property, superannuation fund, and a couple banks accounts, NSW Trustee and Guardian were anticipating their fees being $39,000 to administer the estate.
This amount is roughly 4 times what a legal firm would charge for the same services, which includes acting on behalf of the executor to assist in administering the deceased estate, obtaining a grant of probate, and carrying out the administration process.
One of the biggest issues to be exposed by the Public Advocate’s Report in relation to the Queensland Public Trustee, was that this is a systemic problem and the way the Public Trust Office charge and calculate their fees is clouded in different sections of their Fees and Charges Notice, the information about fees is not freely available and that the Public Trust Office basically have been a law under themselves with no one holding them accountable. There were also findings concerning the use of the Public Trustee inhouse lawyers, the Official Solicitor, where there were significant conflict of interest issues concerning who the Official Solicitor acted for and regular legal fees payable to the Official Solicitor from the protected persons funds without any scrutiny. The report noted the Official Solicitor is not answerable to the Legal Services Commission, which is the state government body who regulates and monitors the legal profession in Queensland. There was criticism of matters where large amounts of legal fees were run up with the Official Solicitor suing family members for little or no gain to the protected person.
We have several cases involving the misuse of the Official Solicitor by the Public Trustee in pursuing family members and other matters where they have failed to take prompt and proper action to protect the interests of the protected person.
Community Service Obligations
The Public Trustee spent $38 million on what it calls “community service obligations” last year, including an estimated $5 million to run their Free Wills drive in Queensland.
The Public Advocate’s Report looked at the community services that the Public Trustee provide and closely examined the “Free Wills” drive. The Public Trust Office have used their lure of a “Free Will” for many years, attracting people to engage the Public Trust Office in drafting their Will, and encouraging those that do so to appoint the Public Trustee as executor of their estate.
The Public Advocate’s Report challenged the fact that they are spending this astronomical amount for a Wills drive when they could have allocated that money to a better purpose, such as supporting the people who are on pensions and have no real assets or income and require a rebate to access the Public Trust Office’s services.
The reason The Public Trust Office invests so heavily in their Free Wills drive is that they want the Wills in their Will bank because, come the time people die and the estate needs to be administered, they can then charge exorbitant fees for this service.
They are self-funded, and there is a clear conflict of interest in relation to the financial side of the business and this review shows that the business model must be restructured completely.
It is important to understand that when you have your Will drafted by the Public Trust Office, you are not seeing a lawyer, you are seeing a public servant who is not qualified to give legal advice.
The system is designed to get you to sign the Will, have it held in the Public Trust Office’s Will bank, and appoint the Public Trust Office as your executor.
When you put your trust in The Public Trustee and engage in their Will-drafting services, you will then likely find yourself caught in their web where they have a free ride after you die to charge whatever they like to administer your estate. There is no scrutiny over the ‘advice’ provided in handing out these ‘free Wills’, nor is there any disclosure to the clients about fees charged as executor or advising of the obvious conflict of interest. By contrast, if lawyers are appointed as executors or co-executors in a Will, they are required to provide a written disclosure to the clients under the Solicitor Conduct Rules.
Enduring Power of Attorney – preparing for the unexpected
Enduring Powers of Attorney are often overlooked. Over half the population does not have a Will, and even less people have an Enduring Power of Attorney in place.
Despite the fact this legal document tends to fly under the radar, it really is one of the most important legal documents you can ever put in place during your lifetime. There is a common misconception that Enduring Power of Attorney documents only relate to older people. This is simply not the case. This document can relate to anyone and everyone should have one, in the same way everyone should have a Will.
You could suffer an accident or injury at any time that could impact your decision-making capability. Whether you slip over and hit your head and suffer a head injury, or are involved in a car accident, or have a stroke and lose capacity, if you do not have anything in place by way of an Enduring Power of Attorney, a health worker can apply to QCAT and have the Public Trust Office appointed as your financial manager and guardian to make all your decisions for you on your behalf.
If you have a properly drafted Enduring Power of Attorney, appointing someone in your life who you trust implicitly to make decisions for you, that person can then step in and look after your affairs if the unexpected happens.
If you do not have anyone in your life who would be able to step up and take on the role without disputing with other attorneys (if you appoint more than one) or without acting inappropriately, then you may choose to appoint a professional.
What to do if you are involved in a dispute with the Public Trust Office
If you are involved in a dispute with the Public Trust Office, don’t blindly accept what they tell you. The Public Trust office tends to avoid getting back to people, they withhold information and they don’t give people the right advice.
It is important to get independent legal advice if you are involved in a dispute with the Public Trust Office, or if you are struggling to get information regarding a loved one that the Public Trust Office is acting for, or if you believe your loved one is being taken advantage of.
There are alternative options available and if you feel the Public Trust Office has behaved badly, you can have them removed, and you can challenge their fees.
Attwood Marshall Lawyers can help
It is important to get the right legal advice when you are completing your estate plan to ensure you protect yourself and your estate both whilst you are still alive, and after you are gone. By having a proper estate plan in place, you can avoid having a state body, like the Public Trustee, step in and take control of your affairs.
You need to be extremely careful about who you appoint as your executor under your Will and your attorney under your Enduring Power of Attorney. As part of the estate planning process, our estate planning lawyers will always discuss your needs and what you need to consider when appointing someone to these important roles. We can help you make an informed decision that ensures your best interests are protected.
For all Public Trustee related enquiries, if you would like to find out more about your rights or understand what options are available to you to have the Public Trustee removed, if you are unhappy with their conduct, or if you want to challenge the exorbitant fees they may be charging you for their services, please contact our Estate Litigation Department Manager, Amanda Heather, on direct line 07 5506 8245, email firstname.lastname@example.org or free call 1800 621 071.