Experience with The Public Trustee

Discussion in 'Legal Issues' started by House_Keeper, 28th Nov, 2008.

  1. House_Keeper

    House_Keeper Member

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    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.
     
  2. Joe D

    Joe D Member

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    Don't do it!!

    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.
     
  3. austini

    austini Member

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

    Cheers
     
  4. wylie

    wylie Member

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    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.
     
  5. Raddles

    Raddles Member

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    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
     
  6. Stella

    Stella Member

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    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
     
  7. House_Keeper

    House_Keeper Member

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    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,
     
  8. poordeveloper

    poordeveloper Member

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    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.
     
  9. wylie

    wylie Member

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    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.
     
  10. House_Keeper

    House_Keeper Member

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    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,
     
  11. Raddles

    Raddles Member

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    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
     
  12. Doublebrick

    Doublebrick Member

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    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.
     
  13. Raddles

    Raddles Member

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    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
     
  14. willair

    willair xx

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    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..
     
  15. letiha

    letiha Member

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    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.
     
  16. House_Keeper

    House_Keeper Member

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    Thanks to everybody for all the feedback :)

    Cheers,
     
  17. Whilsh

    Whilsh Member

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    Sheer Disgust with the Pulic Trustee

    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
     
    Last edited: 24th Feb, 2012
  18. pennyk

    pennyk Member

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    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.
     
  19. Macca

    Macca Member

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    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 ?
     
  20. DEC

    DEC Member

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    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.