PDA

View Full Version : Experience with The Public Trustee


House_Keeper
28-11-2008, 08:02 AM
We are at the stage where we are starting to think about estate planning.

We have a fairly simple situation. Married with two kids. No previous partners, marriages, or other dependants. We don't believe anybody could have a legitimate claim against our estate, but we want our assets to be passed on to our children in a tax-effective manner while protecting the assets long-term.

We have property held in joint names and shares and managed funds held under our names. Some holdings have debt, but they are all cash flow positive.

From doing a bit of research, it would seem that the right approach would be to set up a will that instructs the set up of a testamentary trust. Our two children would be the beneficiaries of the trust. It also seems to be a good idea for that trust to be a 'bloodline' trust, which would ensure that the assets held within the trust are out of reach of future spouses of our children.

We are considering using The Public Trustee to set that up.

Has anyone had experience with dealing with the public trustee to set up something similar to this? How did it go?

Has anyone had experience with finding how efficiently the public trustee executes a will like that? Do they have the required skills for it?

Would it be better to go to a solicitor or other specialist company? Why?

Any feedback is welcome.

Thanks.

Joe D
28-11-2008, 08:47 AM
Do not use public trustee as they are usually free upfront but take a huge percentage out of the estate and administer it to suit.

You are better off paying for a will and professional advice so your beneficiaries actually receive the proceeds of your estate.

Older people used to use them because they thought they were free, but it is really just a delayed payment.

austini
28-11-2008, 11:17 AM
Do not use public trustee as they are usually free upfront but take a huge percentage out of the estate and administer it to suit.

You are better off paying for a will and professional advice so your beneficiaries actually receive the proceeds of your estate.

Older people used to use them because they thought they were free, but it is really just a delayed payment.


I thought in QLD the public trustee now operate on a fee for service model.

Cheers

wylie
28-11-2008, 12:32 PM
My parents looked into this about five or so years ago, but never went ahead with it. The plan was that they would gradually move houses into a trust, and ultimately what was left outside the trust would be administered by the Public Trustee for a (fairly hefty) fee. One problem with this was that should anything have happened to my parents before things got into the trust, the Public Trustee would have taken a sizeable slice of the estate.

Instead, they put it on the back burner and about a year ago went to RetireInvest who (for a reasonable fee) are steering their plans to do a similar thing. It is an up front fee and they are very happy with the service.

Their will is quite complicated and RetireInvest also referred them (in consultation with my parents' accountant) to a specialist solicitor who has done up their wills to cover the problems that will be encountered down the track.

Raddles
28-11-2008, 02:09 PM
Hi there
just remember the Public Trustee is a public service department - do you really want your children reliant upon public servants?
I remember my husband was left a car by his grandfather - he was under 18 - as a minor the public trustee became involved - in the end the car had to be sold to pay their administration costs.
You would be better off considering a trusted family member or a professional such as a lawyer as one of the executors - who can run the trust for you - at least that way your estate would only be charged for work undertaken by the lawyer rather than a percentage of your estate which the Public Trustee can ask for.
thanks

Stella
28-11-2008, 10:35 PM
My father died a few years ago & he didnt have a will. The Public Trustee beccame involved & long story short, everything he owned was sent to auction....including a matchbox car collection valued at over $25k (years of collecting & he had had it appraised by someone negotiating to buy the collection) which was sold for around $4k at auction.
When questioned they said it was their job to sell everything - but not neccessarily to get the best price??

Dont do it - spend the $ now & have it done properly & have peice of mind.

Cheers
Stella

House_Keeper
29-11-2008, 07:02 AM
Thanks to everybody for the feedback.

Who would you recommend to assist with the preparation of the will?

Considering that the execution of the will will require the setup of a testamentary trust, could a relative oversee it or is it best to leave it to a professional? I expect that there will be no asset sales when executing the will, only transferring assets into the trust.

Thanks,

poordeveloper
29-11-2008, 07:16 AM
Also be aware that the executor is entitled to charge a fee regardless of whether they are a solicitor, lawyer or layperson. Public trustees charges up to 5.5%. Others might charge somewhat less but even a couple of percent of a moderately sized estate is substantial. If the executor is a beneficiary then they typically are not entitled to an additional fee. So I would seriously consider using a relative as the executor.

wylie
29-11-2008, 08:55 AM
I would be very careful with will preparation. My parents wrote wills several years ago including planning a testamentary trust to look after the housing needs for one son, but not letting him control the asset. Once he dies, the trust asset was to be sold and split between all the grandchildren, including this brother's estranged son.

When they recently altered their wills, they used a specialist solicitor who advised them that under the old will, the house in the testamentary trust would have gone totally to the estranged son and the other grandchildren would not have any of the proceeds. This grandson is also looked after elsewhere in the will and having the whole house left to him also would have been grossly unfair to the rest of the family.

If you are looking at trusts it would pay to make sure that you use a solicitor who knows his or her stuff. We don't like to think about the problems that would have occurred under the old will.

House_Keeper
29-11-2008, 05:09 PM
Thanks for the feedback.

Can anybody recommend a competent solicitor or company in Sydney that is knowledgeable enough to write a will to set up a testamentary trust.

Thanks,

Raddles
29-11-2008, 09:43 PM
Hi there
most solicitors could prepare a will with a testamentary trust - if you want an accredited specialist - you need to refer to the law society web page and check for one close to your location.
thanks

Doublebrick
29-11-2008, 10:21 PM
I actually made a will with the PT a couple of months ago - I was a bit concerned about the cost of PT acting as the executor (between 3-4% of the value of the estate, rates increasing on a sliding scale) but I just went ahead with it, I guess attracted by the notion that PT will still be here in say 20 years time, whereas a sole practitioner may not be around, and also (I guess foolishly now) by not having to pay anything upfront. I did ask them what if I wanted to end the executor relationship with the PT - they said I could make a new will which effectively overrides my existing will with PT - is this correct?

So, after reading this post I am considering paying a solicitor and doing up a new will - the PT fees do not account for any outstanding mortgages on your property, but the value of the whole estate, so it is likely that any property I pass on may need to be sold to pay for the PT administration fees.

Raddles
30-11-2008, 05:51 AM
HI there
yes a later will would overcome the earlier will with the PT involved
Consider using a number of executors - say one family member or 2 plus a solicitor - that way there will surely be someone who has an interest in your family to run your estate.
thanks

willair
01-12-2008, 09:39 AM
We are at the stage where we are starting to think about estate planning.

We have a fairly simple situation. Married with two kids. No previous partners, marriages, or other dependants. We don't believe anybody could have a legitimate claim against our estate, but we want our assets to be passed on to our children in a tax-effective manner while protecting the assets long-term.

We have property held in joint names and shares and managed funds held under our names. Some holdings have debt, but they are all cash flow positive.

From doing a bit of research, it would seem that the right approach would be to set up a will that instructs the set up of a testamentary trust. Our two children would be the beneficiaries of the trust. It also seems to be a good idea for that trust to be a 'bloodline' trust, which would ensure that the assets held within the trust are out of reach of future spouses of our children.

We are considering using The Public Trustee to set that up.

Has anyone had experience with dealing with the public trustee to set up something similar to this? How did it go?

Has anyone had experience with finding how efficiently the public trustee executes a will like that? Do they have the required skills for it?

Would it be better to go to a solicitor or other specialist company? Why?

Any feedback is welcome.

Thanks.
I would just go and see a Solicitor,i have bought property from the public
trustee,and go to their auctions most weeks and from what i have seen over the years is,the auctions they run for property are rock solid and always seem to get above market value,they have good auction people
that don't take bids off the fence post or the gum tree in the back yard,
but for the personal gear from out of the houses they get very little,
so it works both ways,not only older people property goes through
but also several youger people estates are sold..willair..imho..

letiha
01-12-2008, 08:38 PM
I haven't had to deal with them directly in relation to a will or an estate but the people I know say it is a painful experience, takes longer to get any money, red tape red tape and more redtape even with simple things like selling shares (while the market was up) took over a year for one friend to get a single cent, whilst the trustee charged a huge fee.

Spend $200 get the will done yourself.

House_Keeper
02-12-2008, 05:43 AM
Thanks to everybody for all the feedback :)

Cheers,

Whilsh
24-02-2012, 09:41 AM
Do not use them, I repeat do not use them!

My partner died in August last year (2011) and the whole process still drags on. The ongoing emails and phone calls (most of which I’ve instigated) have added discontent and anger to the pain I’ve suffered over the loss of a loved one.
I'm not an accountant so my figures may be a little out but so far from the estate I’ve received $5000 and estimate that over $17,000 has been spent or taken thorough inefficiency, mismanagement or other possible allegations.
In one of the many emails I’ve sent to upper management I’ve made this statement and received no refutation re this figure.
The Public Trustee even wanted to charge me $240 an hour to sort out a hold-up that they had created through mismanagement, lack of care or lack of understanding of the processes involved.

Since this saga began I've heard much negative comment from people about this pseudo-government (self-funded) organization. There is a strong ‘public perception’ of the performance and care (or lack of) demonstrated by The Public Trustee. This web page is only a small indication of the discontent out there.

I’m speaking to the Ombudsman next week and have begun the process of speaking to Public Affairs program’s research departments. I’m also investigating what’s involved in taking out a class action.
If you have suffered or are suffering at the hands of The Public Trustee please email me at why@aapt.net.au and help me have our discontents heard on a more effective public level. Even replying to this web site will carry import.
Thank you,
Peter Thompson

pennyk
24-02-2012, 12:47 PM
We had to deal with them before mum died, when we were her guardians. It was a painful, frustrating experience. Their primary goal, as someone else said, was selling her assets, rather than seeing that we could managing them and grow them while she was still alive. (eg it took us about 4 months to get approval to rent out her PPOR, rather than sell it.)
every decision had to be run by them, despite the fact that we were appointed guardians, and they questioned everything, required long explanations of why we wanted to proceed as we did etc. They never took into account what she would have wanted, only what would make life easier for them.
In fact, their only role should have been to ensure that we were not mismanaging the funds, but as guardians, we should have been able to make decisions about the best way to manage her funds.
They finally gave us approval to rent out her PPOR the day after she died.... I was very glad to be free from their involvement in our lives!

in my experience, they were just a blockage to managing the estate well. I would never recommend using them.

Macca
24-02-2012, 02:56 PM
I have heard similar but many solicitors will no longer manage estates as they say they are incredibly expensive to wind up.

The red tape is a huge burden and the heirs invariably complain that the expenses are too high.

Any suggestions ?

DEC
24-02-2012, 06:23 PM
Fees for public trustee in QLD are here
http://www.pt.qld.gov.au/publications/fees-and-charges.html

We thought it was pretty straight forward:
If I die it all goes to my wife
If she dies it all goes to me
If we both die, who cares, we'll be dead.

We did set it up so certain named assets go to one family and certain named assets go to another family.
We did lay out steps to be taken, so not sure why it would be a problem.

I have heard "stories" about how bad they are but have not actually seen any evidence of it.
And never having used a solicitor or public trustee to handle my affairs when I die, I cannot honestly compare the two.

Terryw
24-02-2012, 07:25 PM
Fees for public trustee in QLD are here
http://www.pt.qld.gov.au/publications/fees-and-charges.html

We thought it was pretty straight forward:
If I die it all goes to my wife
If she dies it all goes to me
If we both die, who cares, we'll be dead.

We did set it up so certain named assets go to one family and certain named assets go to another family.
We did lay out steps to be taken, so not sure why it would be a problem.

I have heard "stories" about how bad they are but have not actually seen any evidence of it.
And never having used a solicitor or public trustee to handle my affairs when I die, I cannot honestly compare the two.

But who will process all this once you are dead? This is the problem. Applying for probate is a bit complicated. Its even more complicated when there is no will.

And acting as an executor for someone's will is not easy. It takes a lot of time and is stressful - especially when beneficiaries are eager to get their hands on the estate. The executor generally doesn't get paid - unless they are a professional. But they can apply to the Supreme Court to get payment - another complciation. Executors can also be liable for mistakes and debts incurred - eg. if they do not properly advertise or mistakenly distribute money they can be personally liable to a beneficiary who missed out.

The best way is to gift everything before you die - and then die with a tax debt.

fernfurn
25-02-2012, 08:21 AM
are you serious? can you do this? is there gift taxes involved? what happens with the tax debt? do they go after the heirs for it?

Terryw
25-02-2012, 08:30 AM
are you serious? can you do this? is there gift taxes involved? what happens with the tax debt? do they go after the heirs for it?

Are you serious?

There is no tax on gifts in Australia. If I were to give you $10,000 would it be taxed?

If someone dies and there is a shortfall with more debts then assets then the creditors simply miss out. The dead person cannot pay.

Third parties cannot be held liable for the debts of another unless they have given some sort of guarantee. So heirs cannot be liable - anyway how could they be heirs if there is nothing to give them.

Even your life insurance cannot be used to pay debts of the estate.

DEC
25-02-2012, 09:53 AM
^^ all very good if you know what date you are going to die on and there will still be stamp duties and various other fees

Terryw
25-02-2012, 10:19 AM
^^ all very good if you know what date you are going to die on and there will still be stamp duties and various other fees

Date is not that necessary - we all know we are going to die sometime. So if you plan your estate in advance you can largely do it. eg. not acquiring property in your own name.

There will only be stamp duty if you are gifting dutiable property such as land. Other property such as shares, units in unit trusts, businesses etc would generally not be held in personal names anyway.

It you have real property in personal names then there is always the withdrawal of equity option - subject to servicing.

Imagine you have purchase a $100k property in 1985 (October) and it is worth $2mil in 2020. GG would be roughly $1,900,000 or $950,000 after 50% discount. Tax payable on this may be around $400,000. Imagine if you could borrow 90% of $2mil = $1,800,000. You spend the cash and die just as you are handing over your last $1 timing it perfectly.

Estate sellings the property - your ownly asset and realises $200,000. But you owe the ATO $400,000 plus income tax which you hadn't paid for the past 4 years.

Made up figures with lots of exagerations, but that is the general picture.

Of course not many know the exact year they will die, but some have a general idea - however getting a loan at this stage may not be easy.

BTW, if anyone has a terminal or even serious illness the ATO will often forgive tax debts.

spridget
27-02-2012, 06:25 AM
Hi,
My father left his will in the hands of the PT Tasmania. Bad move. Their fees plus fees to the agent they engaged cost us nearly 10% of the sale of the family home. Once they take hold you have no say and no rights in how the property is handled. Getting any information from them was a nightmare. As you are not actually entitled to any say in the sale, giving you information is considered pointless.

wylie
27-02-2012, 07:08 AM
Our PPOR was bought via Public Trustee auction. It was owned by a lady in her 70s who had a relative (cousin?) of a similar age living with her. She went into hospital for a reasonably simple procedure and died unexpectedly.

She left an estate worth a few million to the Salvation Army with the Public Trustee managing it. The relative was distraught and was give something like two weeks to get out of the house.

Our neighbours stepped in and negotiated with the Public Trustee to allow her more time to find alternative accommodation. They said it was not an easy negotiation. She also claimed that a new will had been made, leaving the house to her and had apparently been witnessed by another neighbour. That will was never found, so the original will was carried out and that relative had to find other accommodation very quickly, whilst grieving and wondering what happened to the will.

This story makes me wonder why there is not some central repository for wills, similar to storing title deeds. This must happen a lot. New will is tucked away at home somewhere whilst the old one is found and followed.

This is the story told to us by the neighbours involved.

DEC
27-02-2012, 07:16 AM
Hi,
My father left his will in the hands of the PT Tasmania. Bad move. Their fees plus fees to the agent they engaged cost us nearly 10% of the sale of the family home. Once they take hold you have no say and no rights in how the property is handled. Getting any information from them was a nightmare. As you are not actually entitled to any say in the sale, giving you information is considered pointless.

Would it have been any different if a solicitor was handling it?

Published fees for PT Tasmania

To administer an estate
When your estate is administered a fee is charged on assets held in your sole name that are either realised or transferred to a beneficiary:
On the first $100,000 or part 4.4%
On the next $200,000 or part 3.3%
On the next $200,000 or part 2.2%
On amounts above $500,000 1.1%
It's important to know that the fee will be reduced:
if you own assets (say, your house, or land) as a joint tenant then no fee is charged at all
if you have solely-owned assets which are classed as 'matrimonial assets' and which are transferred to your surviving spouse or defacto partner - for example the family home, motor vehicle, household effects and furniture - then the fee charged on these assets is only 2.2%.

http://www.publictrustee.tas.gov.au/article.php?Doo=ContentView&id=650

pennyk
27-02-2012, 08:03 AM
Would it have been any different if a solicitor was handling it?



I found that the PT had a very "fixed" way of dealing with things. My situation was different as my mum was still alive. But they couldnt accept the fact that we wanted to hold onto her assets, which were producing enough income to cover her nursing home costs. They wanted to sell the assets..... because it was easier for them to "supervise".....even though keeping the assets together was likely to result in them having a much higher value, and we knew it was definitely NOT what our mother wanted. She would have been horrified.
Honestly, it took around 4 or 5 months, and mountains of paperwork, to get approval to rent out her home. (and we were guardians, so their only role was to ensure that we werent being negligent in our duties).
Dealing with a solicitor since mum died has been much easier....... We can discuss things, get advice from the solicitor and then make a decision on how to proceed very quickly and with a minimum of fuss. There is a relationship there, rather than a bureaucracy.

I think having any government department involved in your financial life is a bad idea!!

Terryw
27-02-2012, 08:07 AM
This story makes me wonder why there is not some central repository for wills, similar to storing title deeds. This must happen a lot. New will is tucked away at home somewhere whilst the old one is found and followed.
.


There is. Wills can be deposited with the Supreme Court registry in NSW. There is a fee involved though and this usually turn people off

Terryw
27-02-2012, 08:12 AM
There is. Wills can be deposited with the Supreme Court registry in NSW. There is a fee involved though and this usually turn people off

The fee in NSW is $110.

wylie
27-02-2012, 08:19 AM
There is. Wills can be deposited with the Supreme Court registry in NSW. There is a fee involved though and this usually turn people off

I didn't know that. Thanks.

I believe wills should be made by solicitors and they should be made to lodge them. The cost could be built into the cost.

Of course, that would mean that home-made wills would no longer be accepted, but my experience of home-made wills (my FIL) was a disaster. He knew more than any solicitor :rolleyes:, left a dog's breakfast, split the family, all because he thought he knew everything. He didn't even know that he couldn't leave his half of the marital home (held as joint tenants) to two of his children :rolleyes:.

What a bl00dy mess that created, and left scars that, twelve years later, still are not healed.

Terryw
27-02-2012, 08:47 AM
I didn't know that. Thanks.

I believe wills should be made by solicitors and they should be made to lodge them. The cost could be built into the cost.



Hi Wylie

Sometimes solicitor drawn wills are not much better.

I am looking at a will now drawn by a solicitor. The testator wants to leave a large part of his assets to charity. But the charities named in the will no not exist! There are no entities registered in the names listed in the will. No ABNs in the will - solicitor didn't check, just wrote in the names given by the client. approx $3million involved in this gift too.

Same solicitor has put a clause in the will which says "I direct that my superannuation form part of my estate". But provided no advise that this is not binding on the trustee of the SMSF. No advice that he needs a binding death benefit nomination. No tax advice. So if this guy were to die tomorrow one of his children would control his $2mil in his SMSF.

wylie
27-02-2012, 08:53 AM
That is a worry, isn't it. You go to a "professional" only to find you've paid good money for a dud product.

Is that common Terry? I do know that the will my parents made to deal with our particular family circumstances replaced a very similar will, but in that earlier one (different solicitor) the asset forming the base of a testamentary trust was to be divided between all grandchildren at the death of the person it looked after.

Turns out, that it would have gone to his only son. The second solicitor pooh-poohed that mistake, but he made a fairly fundamental error of his own. It is too late to fix his error now. Luckily it is not such a biggie, but it does make me wonder why he was so smug about finding the error made by the other solicitor :rolleyes:

Terryw
27-02-2012, 09:22 AM
Yes these things are common.

I had another friend who died last year. I counted 8 things wrong with his will which was drawn up by a solicitor just months before he died. I know this solicitor and she had told me of the many hundreds of wills she has drawn up over the years so she has experience.

Firstly he had an executor who was 70 and he didn't want to act in this role. This left the back up executor who was almost 80 and she just couldn't do the job due to lack of ability.

He left assets on trust to his 13 year old son until he was 25. The executor of the estate would also be the trustee - the 80 year old would be trustee for another 12 years! No consideration about the tax aspects.

He left shares in his Pty Ltd company to his parents who were on the pension and then the company went into liquidation before his death anyway.

There were many other mistakes too - maybe not so much mistakes but not carefully thought out the way things would pan out.

His estate ended up with debts more than assets so it didn't really matter in the end, but it could have been a disaster.

DEC
27-02-2012, 11:00 AM
I found that the PT had a very "fixed" way of dealing with things. My situation was different as my mum was still alive. But they couldnt accept the fact that we wanted to hold onto her assets, which were producing enough income to cover her nursing home costs.

That should have been stipulated in the will or wishes shouldn't it?
Who had the power to make the decision, you or them?
If power of attorney was given to them, I am surprised you got any say.

Terryw
27-02-2012, 11:01 AM
That should have been stipulated in the will or wishes shouldn't it?

Not if she was still alive!

Terryw
27-02-2012, 11:03 AM
ie, wills only apply upon death of the testator.

While a testator is still alive they would need to appoint an attorney to look after their financial affairs and a guardian to look after their other non financial affairs.

DEC
27-02-2012, 11:07 AM
ie, wills only apply upon death of the testator.Yes, but isnt there the facility to have what you want to happen "in case of" put in writing for the person who has power of attorny to follow?

While a testator is still alive they would need to appoint an attorney to look after their financial affairs

That was my point, it seems that PT was the appointed one and not PennyK, if I read the post correctly.

Terry, you seem to have some legal knowledge are you a solicitor?
If so, how is average joe supposed to know if his/her existing will has been written correctly given some of the examples given above ?

Terryw
27-02-2012, 11:11 AM
You could draft an enduring power of attorney broadly or have restrictions. Most people probably don't properly consider the possibilities of what could happen to them.


BTW, in NSW at least, most power of attorny would cease to operate on incapacity, only an enduring POA would continue.

pennyk
27-02-2012, 11:32 AM
That should have been stipulated in the will or wishes shouldn't it?
Who had the power to make the decision, you or them?
If power of attorney was given to them, I am surprised you got any say.

My brother and I were appointed mum's guardian, as she was medically unable to manage her affairs. (It wasnt enduring power of attorney... she hadnt set that up,but if she had that, it would have been much much easier... it was a "forced" guardianship thru the guardianship tribunal.)

You would think that as guardians, we would have been able to stipulate what should have been done with her affairs...... but you still have to get approval for just about everything from either the guardianship board or the public trustee.
So, in theory we had the power to make the decision..... in reality, PT put roadblocks in front of every financial decision we had to make during that time. (the guardianship board was less difficult to deal with)

I think they grossly overstepped the mark of their responsibilities, but what can you do? Their approval is required for just about everything. It was an incredibly frustrating experience, particularly when we knew we were acting on what mum would have wanted and they had no idea of what her feelings were. They were trying to do what they always did... sell the assets and put money in the bank.

Now she has died, we are executors of her will, and we thankfully have no more dealings with them. Obviously being an executor is not easy, particularly since we have a large, opinionated family....... but its a lot easier than having to have them approve every decision. i hope I never, ever have to deal with them again.

Felis
03-05-2012, 08:37 PM
Your email address is bogus...wanted to contact as hear you