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Private Trustees
Alternatives to consider so that you can steer clear of the Public Trustee!
Published 23 September
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Attwood Marshall Lawyers Estate Litigation Special Counsel, Lucy McPherson, recently joined Robyn Hyland on Radio 4CRB to discuss how appointing a private trustee company as financial manager or administrator can be a beneficial option to avoid the Public Trustee taking control of your affairs, or that of a loved one. Many people are unaware of their options, however, in the wake of the horror stories that have come to light over the past couple of years where the Public Trustee has been exposed for mismanaging people’s affairs under their care, it is imperative for the community to understand what they can do to avoid this happening to them. 

Recent matters involving Public Trustees

Sadly, the bad behaviour or misconduct of Public Trustees is not something that is new. For years we have been trying to raise awareness of these issues and defend the most vulnerable people in our community who are being harmed by the conduct of the Public Trustee.

Every year Attwood Marshall Lawyers receives hundreds of enquiries from people who share their horrific stories of neglect, mismanagement, and maladministration by state trustees around the country, particularly in the states of Queensland and New South Wales.

We receive enquiries about people under financial management of the Public Trustee who are having problems obtaining sufficient money for food, clothing, rent, and other essential items. Often, these are people who have significant wealth under financial management by the Public Trustee.

In this role the Public Trustee has a fiduciary obligation or duty to act in the best interest of the protected individual. Unfortunately, the Public Trustee often withholds payments from these individuals, giving the explanation that they need to preserve that person’s funds for the future. Meanwhile, the Public Trustee is mismanaging those funds, investing them poorly, and quite often taking a large component of the funds available to meet fees to pay themselves excessive (and often unnecessary) fees.

That is the case in the financial management/administration arm of the Public Trustee; then there are other horror stories linked to deceased estates where the Public Trustee acts as executor of an estate.

Attwood Marshall Lawyers recently received instructions in a shocking matter where the New South Wales Trustee and Guardian, who were appointed as executor of the estate, have sat idly on the administration of a deceased estate for over four years.

Our clients, who are beneficiaries of the estate, have been patiently waiting for their deceased father’s estate to be administered after his passing in 2016, however, the estate property has sat vacant for years, and been left to ruin.

The estate should be distributed to the beneficiaries in accordance with the terms of the Will and the law, however, the NSW Trustee continues to fail to take any action and administer the estate.

On behalf of the residuary beneficiaries, Attwood Marshall Lawyers will be seeking orders for the removal of NSW Trustee and Guardian as executor so that an alternative person can be appointed, and the deceased’s wishes can finally be fulfilled.

This is just one example of the many disputes we see when the Public Trustee is appointed as executor of an estate. We believe it is only the tip of the iceberg – there are thousands of other cases that have not been discovered.

Holding the Public Trustee accountable

Public Trustees are statutory bodies that are governed by state legislation. One of the real issues that we see is that “trust officers” who are not legally trained are undertaking important legal work and those individuals are not held to the same ethical and professional standards as lawyers, who are bound by stringent ethical standards in the way that they conduct themselves.

In 2020-2021, the Public Advocate of Queensland finalised a report examining the Queensland Public Trustee’s fees and charges levied on its financial administration clients.

Read more: QLD Public Advocate Review exposes failings of Public Trustee

From this report, the Queensland state government introduced legislation at the end of 2021, which passed in May 2022, to implement an advisory board to oversee the office and enhance transparency and public accountability of the Public Trustees’ services.

The Board monitors the performance of the Public Trustee’s functions and provides advice and recommendations to the state minister for Justice, for legislative change or improvements.

It is the Board’s role to ensure that strong protections remain in place for clients of the Public Trustee.

We haven’t yet seen something of similar force occur in recent times in New South Wales. However, we are hopeful it is on the horizon given the recent media attention that these issues have been garnering in New South Wales.

This year, the Queensland government ordered two separate inquiries into the Queensland Public Trustee as more horror stories came to light, which were revealed in an investigation aired by Four Corners. What is to come from these latest inquiries is yet to be seen, but it is evident much more action is needed!

Read more: Four Corners Program exposes Public Trustee horror stories

Attwood Marshall Lawyers are once again calling for an inquiry into the NSW Trustee and Guardian in particular so that it too can be held accountable for its conduct and answer to the individuals who have suffered at its hands.

An inquiry into the misconduct and maladministration by the NSW Trustee could ultimately help ensure that this government entity delivers its services fairly, legally, and to community expectations.

Financial Management: Alternative options are available

Many people are unaware that they can appoint a private trustee company as financial administrator or manager to perform the same function as the Public Trustee.

A financial manager (NSW) or administrator (Qld) is required when an individual does not have the capacity to manage their financial affairs. This situation may arise where an individual has an intellectual disability, psychiatric illness, an acquired brain injury, or an age-related cognitive illness.

Without the implementation of a financial manager or administrator, an individual suffering from these type of illnesses or impairments can be vulnerable to exploitation, financial abuse, or neglect.

A financial manager or administrator is ultimately the person, or company, that is given the responsibility to manage property and other assets of that person, to act in the best interests of that individual, and to make financial and legal decisions on behalf of a person with a decision making disability.

Who can act as a financial manager or administrator?

An individual can be appointed as a financial manager or administrator, including someone’s friend, relative, or an independent third party such as an accountant or lawyer.

In circumstances where significant wealth or complicated affairs are involved and appointing an individual as a financial manager or administrator is not suitable, appointing a private trustee company is also an option.

The advantages of appointing a private trustee company

There are various benefits of appointing a private trustee company as financial manager or administrator, including:

The individual usually receives a much more personalised service. When appointing a private trustee company as financial manager or administrator, the protected individual will usually be given a case manager or individual assigned to their affairs with direct access to that person 24 hours a day, 7 days a week.

Private trustee companies have in-house financial advisers to provide advice and assistance in relation to financial decisions.

Fees and management costs are charged appropriately.

Key considerations when appointing a private trustee company

Appointing a private trustee company as financial manager or administrator may not be suitable for everyone.

One of the main things to consider is the cost associated with appointing a private trustee company. Some individuals may not have the assets available to meet the costs and may need to consider the appropriateness of a private trustee company where an individual may not have a significant estate. In those circumstances, it may be more appropriate to appoint an individual to act in the role.

If it is suggested that an individual act as financial manager or administrator, the person must be over 18 and suitable for the role. Key considerations are: their experience managing money, their own financial history and any conflict of interest that exists between them and the protected person.

It is imperative that an individual receive trusted independent advice to discuss their unique situation to find the right solution to meet their needs.

The process to appoint a private trustee company to act as financial manager

Depending on the proposed incoming private trustee company or individual, and depending on the circumstances of the protected individual, it may be necessary to bring an application to the Supreme Court in your state, or in some instances an application in the Tribunal (QCAT or NCAT) which also have limited powers to make orders in relation to a the appointment of a private trustee company.

Upon making an application, evidence needs to be put before the tribunal or the court in relation to:

The individual’s circumstances

Their family situation

What capacity concerns are raised

Why there is a need for someone else to manage the person’s finances

Sometimes, what is proposed in relation to their financial affairs

Ultimately, a Judge or Tribunal needs to consider whether the orders that are sought are appropriate for the individual and their circumstances, and ultimately whether it is in the person’s best interests for an order to be made.

How to avoid the Public Trustee intermeddling in a deceased estate

This one is quite simple. Do not take up the offer of a free Will or reduced cost Will by the Public Trustee. It is often the case that when people get their Will drafted by The Public Trustee that they are encouraged to appoint the Public Trustee as their executor. This is where it all unravels. What someone may think they save by taking up the offer of a free or reduced cost Will, they ultimately pay in the long run, with their estate, and their loved ones, paying the price when the estate is administered, and significant fees are charged for the service. The Public Trustee has been exposed for charging exorbitant fees, and over-servicing estates which subsequently drains the estate available for distribution between the beneficiaries.

The best way to avoid this happening is to have your Will drafted by an experienced estate planning lawyer, and to appoint an executor that you trust implicitly, not the Public Trustee.  

Attwood Marshall Lawyers – we will fight for people who have suffered under the control of the Public Trustee

Our experienced estate litigation lawyers can help you with many issues relating to the Public Trustee . As a leading estate litigation law firm with extensive experience in complex public trustee disputes, we can help with:

Matters involving the mismanagement of deceased estates where the Public Trustee has been appointed executor;

Matters involving the mismanagement of affairs under financial management or administration orders;

Negotiating exorbitant fees charged by the Public Trustee;

Applications to the Court to seek the Court to appoint an alternative trustee.

Please contact our Estate Litigation Department Manager, Amanda Heather, on direct line 07 5506 8245, email [email protected] or call our 24/7 phone line on 1800 621 071 to discuss your needs.

There are alternative options available to avoid letting the Public Trustee meddle in your affairs. Don’t take the risk; find out what options there are to ensure your best interests, and those of your loved ones, are protected.