The public trustee stories featured on Monday's Four Corners were quite horrible.
A few questions:
1) Has anyone heard of any good deeds done by any public trustee?
2) Is Victoria State Trustees any better?
3) Would you appoint public trustee as your will executor? Reasons?
Thanks!
/WT
No way!!
I'm an ex-solicitor who used to do estate administration (quit that over 7 years ago mind you). We used to feel sorry for anyone who appointed the public trustee as their executors, knowing they were getting absolutely ripped off. They advertise that they "only charge the court prescribed administration fees, no more" - but these were set in ancient legislation, at a time when people had far less assets/dollars, and are now way above market rates for having a lawyer do it.
You can look at the Vic State Trustees' fees for estate administration here: https://www.statetrustees.com.au/what-we-do/state-trustees-c… You'll see that it's a percentage based formula. Even if the only asset you have is, say, a home worth $1m, then their formula says they'll charge you the lesser of:
* $27,500 (1,000,000 x 1.65% + 11,000), or
* $55,000 (1,000,000 x 5.5%).
Some notes:
* the formula is 'applied to the gross value of assets', so it doesn't matter if your $1m house has a $750k mortgage on it and is therefore only 'worth' $250k… they still charge you $27,500.
* if you're not living in that home anymore (say you moved to a retirement home and rented it out), then it would no longer be your principle place of residence, so the 'lesser' amount would be $49,500 (1,000,000 x 3.85% + 11,000).
* An estate that simple could be sorted out by a lawyer for <$5,000 I'd expect (probably far less).
The more assets you have, the more the fees go up from there! Steer well clear.
There are obviously lawyers that also work in predatory ways like this… but I think you're far more likely to find a decent one that not.
One thing I would add, there is something to be said for appointing a 'professional executor' (just not the Public/State Trustee - or anyone who proposes to charge the 'scale fees').
Most people, quite reasonably, appoint a trusted person as their executor (usually their spouse or children). But, in practice, that job is 99% just signing the things your lawyer puts in front of you to do what your Will says needs to happen to your assets (again, usually either give all to spouse or divide between children).
I reckon half the effort (and therefore cost) of most of the estates I administered was meeting with the executors, sending them things to sign, chasing those things to be returned, taking phone calls from them, etc. It would actually have been so much more convenient if I were just the executor, it could have significantly reduced the effort/cost to get that job done.
Additionally, for anyone who isn't just 'dividing between the kids equally' it could be useful to have an impartial person act in that capacity. Plenty of times I saw what was obviously an already somewhat divided family, divided further because some children were getting more than others - and in most cases the child getting the most was also the executor, and therefore 'had to abide by the Will' to give themselves more (which of course, you don't actually have to at all… as long as all the beneficiaries of a Will agree you can divide it up however you want to!).
But make sure anyone you do appoint will just charge an hourly rate for that service (or some other agreed reasonable fee).
There are obviously many things that might complicate your estate, which might change this (I feel like I should add a 'this is general advice only, and should not be relied upon' disclaimer :P)
Of course many believe that its run by the government so its going to be fair.
Government organisations, just like private organisations can be inefficient.
Over time the bureaucracy can be more interested in their own welfare than that of the customer.
Good privately run companies can deliver great value, but also they can rip people off.
There is no proven formula on what is best. It all comes down to the motivation of those running the organisation, be it private or public.
Just had the pleasure of dealing with the NBN in two different locations. One was great , the other sh.t Like do they work for the same company!!
One keep me informed on arrival and made sure it was working even though I had forgotten a piece of customer equipment (telephone lead). The other failed to turn up, then rescheduled and didnt even tell me of the new "appointment". Which I missed of course.
The private provider had to sort the failed NBN out.
Firstly, the government organisations are required by law to charge the fees that they charged.
Secondly, the 'NBN' people who failed to turn up - very unlikely they are actually NBN employees. They are almost certainly contractors to NBN.
@dtc: True, the NBN employees get paid too much to do grunt work.
I dont understand your first point, with regard to my comments. I wasnt talking about charging, I was talking about value for service.
@dtc: I'm not sure that the public trustees are necessarily "required by law to charge the fees that they charge"…
I could be wrong, but it looks like new laws were introduced in 2017 in Victoria to change old scale fees, and introduce new protections regarding the charing of a commission (there's a relatively detailed article on it here: https://demarco.com.au/de-marco-thinks/2018-2019/wills-and-p…).
It seems like the Victorian State Trustees have simply set a (very high) commission based fee, and no doubt make people expressly agree to it in their wills, and give 'written informed consent' pursuant to the new requirements in section 65B of the relevant Act, at the time of signing.
The 4 Corners program talked about persons who are alive and under court-ordered financial management which attract a different set of management fees and is completely different from your comments of deceased estates administration.
But the point I see is everyone should consider making legal documents (like a POA, Enduring Guardian, and a Will) now, so should they become unwell, get hurt or even die, that their finances are protected and managed by someone of their choosing. Further, if they become unwell and unable to make lifestyle decisions, for someone of their choosing to help them do this.
Yeah… but the OP asked about appointing them as executor of a will.
I know of a case where the treatment of pain recommended by doctors was denied to a dying lady due to the cost being too high.
Also I know of multiple cases where the trustee has left people in hospital when they should have had other accommodations made, simply as the hospital can only charge a minimal fee to those who dont wish to leave, where better more suitable accommodation is obviously more expensive.
It is (profanity) scandalous, please make your arrangements early, to fall into the hands of the system is in some cases worse than death.
It is unfortunately the nature of ABC Four Corners investigative reports that they find an issue that is real, find the people who feel they are worst done by over it, believe every word they say is true, and portray that as what happens to most people.
Yes, some things shouldn't happen to anyone. But a realistic person understands that no matter how hard other people try to do the what they think is best for them, some people will feel really hard done by, and their belief and the view they put of what happened to them will be be far worse than the other side felt was fair to portray it as being.
It is the nature of the ABC view of the world that if they decide a group of people are victims, then every instance where they're not happy with what happened to them will be use to portray the other side as evil and uncaring and whatever else bad. White and black. No shades of grey like the real world actually is.
I recently watched the movie "I care a lot", mainly because it had Rosamund Pike in it. The 4-Corners story demonstrated that art imitating life is probably more common than we think. I am impressed at the ABC's knack for unearthing the down-and-outs and ne'er-do-wells though.
Yeah that was pretty sad. Reminded of of that NDIS nurse that just left their client to die over a period of months while they spent their entire shift on their phone. Makes me hope I never have a serious stroke and need to rely on the system. If I had money I probably would choose an accountable trustee now before the stroke happens.