Noah died in 2017. In his will, he left his estate in equal shares to his children: Oliver, William, and Claire. Noah appointed a trustee company the executor of his will.
William made a claim on the estate. He alleged that Oliver had misused their father’s funds, for Oliver’s self-gain, when Oliver acted as Noah’s attorney under an enduring power of attorney for property (the EPOA). The transactions in dispute totalled over $50,000. Oliver denied the allegations.
The trustee company had to consider William’s allegations. They asked Oliver for information about the transactions William was concerned about.
The trustee company also made inquiries about Noah’s capacity to help them decide when the EPOA had come into effect. However, there was no medical evidence about Noah’s capacity, so William and Oliver mutually agreed the date on which their father had lost capacity.
After reviewing all the disputed transactions from when the EPOA had come into effect, the trustee company decided to offset $1,300 from Oliver’s share of the estate. This amount was a relief carer payment the government had paid Noah, which Oliver had received and benefited from. The trustee company decided that the payment was an estate asset.
For the other transactions, the trustee company were unable to decide whether Oliver had used the funds for self-gain or he had spent them on Noah’s care.
After the trustee company had distributed the estate to the beneficiaries, Oliver complained about how the trustee company had treated him and that it had taken them three years to administer the estate.
The trustee company offered Oliver $2,175 to resolve his complaint. Oliver did not accept the offer and he asked FSCL to review his complaint. He wanted the trustee company to compensate him for his legal costs of $9,000 and reimburse part of the $18,000 in fees the trustee company had charged the estate.
Dispute
Oliver said the trustee company had passed their estate file between several staff members and they had made repetitive requests for information. Oliver also believed it should not have taken the trustee company three years to administer the estate.
The trustee company acknowledged there had been delays, but they were otherwise satisfied with the way they handled the estate. Several staff had been involved with the estate administration due to staff turnover.
The trustee company said the fees they had charged the estate were an accurate reflection of the work they had carried out. Their delays had not affected the fees charged.
Review
We concluded that the trustee company were not obliged to reimburse any of their fees. They provided timesheets of the work they had done, to support that their fees were justified.
We also concluded that the trustee company did not need to compensate Oliver for his legal costs. Oliver had incurred the costs because he decided to engage a solicitor when William made his allegations, not because of the way the trustee company had handled the claim on the estate.
We were unable to determine the extent to which the trustee company’s delays were unreasonable. The trustee company were unable to give us their full estate file because they did not have William’s permission to give us their correspondence with him.
It was not ideal that Oliver had to correspond with several staff members about the transactions in dispute, but the trustee company had not done anything wrong by passing the estate file between staff members.
Resolution
We suggested that Oliver should accept the trustee company’s offer to recognise any inconvenience he had experienced because of the way they had handled the estate, including their delays.
Oliver accepted our view and the trustee company paid him $2,175 to resolve his complaint.
Insights for consumers
Trustee companies are entitled to charge for their time administering an estate. Beneficiaries who are in dispute about how an estate should be distributed may want to consider coming to an agreed resolution to avoid a prolonged estate administration and to minimise the costs to the estate.
