This week on ABC’s 7.30 program, Attwood Marshall Lawyers Estate Litigation Senior Associate, Lucy McPherson, was interviewed by Investigative Journalist Anne Connolly as part of the report to share her insight in light of a devastated family accusing the Public Trustee of “mining” or overcharging in a deceased estate and the mismanagement of an 18-month-old’s trust fund where the principal amount had been reduced by nearly 40% over a 15 year period. The toddler is about to turn 18 and will have very little to show for her trust fund – excessive and unreasonable fees were involved as well as neglect.
In the news
In ABC’s 7.30 Report, which aired on Tuesday 8th August 2022, two more horror stories were in the spotlight exposing the Public Trustee’s misconduct, fee gouging tactics, and failure to uphold their fiduciary duties.
Story 1: Free Wills cost families tens of thousands, plus emotional turmoil
The first story on the program focussed on the Public Trustee’s intent to discredit a deceased person and overservice a deceased estate matter by carrying out and charging legal fees for investigations that were unnecessary concerning the validity of her Will.
Ms Cora Whitfort took up the Public Trustee’s offer of a ‘free Will’ service in 2011 to update her Will. That Will would become Ms Whitfort’s last Will and testament.
Ms Whitfort left instructions for her estate to be divided equally among her four children.
As with most Wills drafted by the Public Trustee, Ms Whitfort appointed the Public Trustee as her executor. This is something the Public Trustee encourages all Will-makers when they take up the offer of a free Will. They do not disclose any conflict of interest when appointed as executor, as lawyers are required to do when a client appoints them as executor.
What many people do not understand is that although the drafting of the Will may be “free”, the executor services the Public Trustee charge after someone has passed away are well beyond what most legal professionals would charge to undertake the same work.
A few years after Ms Whitfort executed her Will with the Public Trustee’s assistance, she developed dementia. Ultimately, dementia was listed on her death certificate when she died in 2017.
Due to dementia being listed on the death certificate, the Public Trustee had a legal obligation to make “due enquiries” about Ms Whitfort’s capacity when she had written her Will in 2011.
What should have been a couple of hours of work to produce evidence to the Probate registry to confirm that Ms Whitfort had the mental capacity to make a Will, instead resulted in two years of enquiries and over $20,000 in fees being charged to the estate.
Ms Whitfort’s devastated family members who were left behind could not understand why the Public Trustee had gone to such extreme lengths to investigate her mental capacity when there was evidence that she had capacity at the time the Will was signed and no one in the family was disputing the Will or its validity.
There was no evidence to show at the time Ms Whitfort had executed her Will that she had cognitive degradation, and in fact, there was evidence to support her capacity as she had passed a cognitive test at her doctor’s surgery three weeks prior to executing her Will.
In addition, the Public Trustee employee who prepared the Will in 2011 told his employer he would not have done so if he was not satisfied that Ms Whitfort had capacity at the time.
That should have been the end of the story and common sense should have prevailed.
Instead, the family of Ms Whitfort had to endure years of delay and costs being charged to the estate for what appeared to be no valid reason.
The Public Trustee’s excessive research and investigation, which resulted in excessive fees being charged to the estate, potentially constitutes overservicing, and in any normal legal environment, constitutes professional misconduct for overcharging.
The family has accused the Public Trustee of ‘mining’ the estate, something under the current legislation they are able to do legally, within the letter of the law.
Given that the Public Trustee is self-funded, they rely on fees, commissions, and taking part of the interest earned by their clients as their only source of income, in order to operate.
Story 2: Fees for no service
Six of the largest banking and financial services institutions in Australia have been held to account after being found to have charged their customers for services they did not perform as a result of the Royal Commission in the Banking, Superannuation and Financial Services Industry. Billions of dollars have since been paid back to customers in compensation through various remediation programs.
Sadly, the services provided by the Public Trustee fall outside of this scope and leave Public Trustee clients vulnerable to fee gouging and financial mismanagement.
This was evident in another ‘horror story’ shared on the 7.30 report.
A father of an 18 month-year-old daughter, Luka, took his own life, leaving behind his estate including $72,000 in his superannuation fund. The father did not have a Will, therefore the Public Trustee took over the task of handling his estate on behalf of his daughter after he died.
As a single mother to Luka with no income, Luka’s mother required financial assistance to care for her child. Over a five-year period, she was given access to $12,500 from her daughter’s trust to do just that.
However, after those five years passed, contact between the Public Trustee and Helen ceased for several years.
Helen reached out to the Public Trustee to review what was remaining in trust for her daughter, only to discover that the fund had diminished to $46,000, and the Public Trustee had failed to manage those funds appropriately for many years.
Despite the Public Trustee not undertaking any transactions or services, they took over $14,000 in fees from the account.
There is an inherent conflict of interest in the business model with the Public Trustee in that there are revenue-raising activities within the Public Trustee when the Public Trustee is supposed to be serving the clients whom they are acting for.
Since the previous investigation conducted by ABC’s Four Corners program earlier this year, the Queensland Government announced two inquiries into the Public Trustees’ fees and charges. More is expected to be released by the government later this year from those investigations.
These stories highlight the importance of awareness around the Public Trustees’ service offering, and the consequences that can unfold when people take up the offer of the Public Trustees’ free Will service, or when people fail to write a Will at all.
How to avoid this happening to you
First and foremost, the best way to protect yourself, your family, and your estate, is to ensure you complete your estate plan and have a Will drafted by an experienced estate planning lawyer.
The lure of a free Will by the Public Trustee can be enticing, but the many horror stories that have been well documented show that what you may save in upfront costs to have your Will prepared by the Public Trustee can cost you significantly more in the long run, not to mention the emotional anguish felt by the loved ones left behind who must deal with the Public Trustee.
An estate plan should not only include a Will which handles your estate after you pass away, but should also look at creating documents including an Enduring Power of Attorney that can allow you to appoint someone to manage your affairs while you are still alive if you lose the mental capacity to make decisions for yourself.
Failing to have an Enduring Power of Attorney will mean a tribunal, in most cases, will appoint the Public Trustee to take on this role. Once the Public Trustee takes control of managing your financial affairs, it is difficult to have them removed.
The stories of those who have suffered under the financial management of the Public Trustee are devastating and confronting. We discussed these stories in our previous article “4Corners program exposes Public Trustee horror stories”.
From suffering from dementia to having a stroke or being involved in an accident that causes brain damage, there are countless reasons that may result in someone losing mental capacity at any stage of life.
If there is anything to be learned from the confronting stories being shared by ABC about how the Public Trustee is failing to uphold their fiduciary duties, is to ensure you do what you can to prevent this government instrumentality from ever getting involved in your affairs in the first place.
Help to remove the Public Trustee
If you believe the Public Trustee are charging exorbitant fees, mismanaging someone’s financial affairs, or failing to administer a deceased estate appropriately, it is important to seek legal advice from an experienced estate litigation lawyer who understands how the Public Trustee operates and the process involved to hold them accountable and have them removed from the matter.
Attwood Marshall Lawyers can lodge an application to the Court to seek the removal of an executor behaving badly (including the Public Trustee) , or the Public Trustee from the role of financial manager or administrator and assist with appointing a new private trustee to take over the task.
Our estate litigation team have represented hundreds of clients in Public Trustee disputes, and successfully negotiated exorbitant fees that have been charged, resolved disputes over mismanagement of affairs under financial management orders, resolved disputes over the mismanagement of estates where the Public Trustee has been appointed as executor, and submitted applications to the Court to seek to have an alternative trustee appointed.
If you are involved in a dispute with the Public Trustee and need assistance, contact our team any time by contacting our Estate Litigation Department Manager, Amanda Heather, on direct line 5506 8245, email aheather@attwoodmarshall.com.au or phone 1800 621 071.
We will continue to fight for people who have suffered under the control of the Public Trustee.
Read more:
PODCAST: Families Forced to Take Legal Action Against Public Trustees
Unfair commissions and financial mismanagement – NSW Trustee and Guardian cannot be trusted
Attwood Marshall Lawyers’ call for inquiry into NSW Trustee & Guardian backed by politicians
4 Corners program exposes Public Trustee horror stories: vulnerable Australians trapped, neglected, stripped of assets, charged grossly excessive fees, and silenced with their own money!
