Nathaniel and his sister approached their father’s estate trustee service after his death in October 2019. They were equal beneficiaries of their father’s estate.
The original probate application was filed in December 2019. The court rejected the application in January 2020 due to it not being limited to New Zealand assets. Nathaniel promptly provided further copies of his father’s previous wills addressing his UK assets.
The probate application was not re-filed until August 2020, due to an error by the trustee service. The trustee service apologised and advised Nathaniel that they would refund the fees related to the probate application.
The estate administration was completed in late November 2020. The trustee service charged fees of approximately $10,100 for their work. Nathaniel requested a breakdown, as he believed the total fee was unreasonable. The trustee service subsequently issued a $1,300 refund upon noticing some errors in their fees.
Nathaniel was still unhappy with the final fee and complained to FSCL.
Nathaniel believed that the fees were excessive due to his father’s estate being relatively simple to administer. He cited a magazine article from 2013 noting that simple estate administration could be expected to cost approximately $3,000. The Estate Administration Price List (EAPL) gave an approximate fixed fee of $3,000, and Nathaniel did not believe any further complex work was required. Further, the delays in the estate administration had caused Nathaniel and his sister unnecessary stress.
The trustee service said that Nathaniel’s reference to the magazine article was irrelevant, particularly as it was from nine years ago. Further, although Nathaniel expected the estate to be charged only a fixed fee of $3,000, work beyond the fixed fees was required. However, the trustee service considered Nathaniel’s concerns and offered a further $1,500 fee rebate.
The trustee service had adequately addressed the unreasonable delay in obtaining probate by writing off the fees, apologising, and advising that they would take internal steps to prevent this problem in future. Additional delays with sending documents were adequately compensated by the proposed $1,500 rebate.
The fixed fees for standard work were not the only fees that could be charged. The EAPL established the fixed fees for standard work required on all estates as well as the additional fees that would vary depending on the estate. As every estate is different, even very simple estates could be charged a combination of fixed fees and additional work fees.
We did not place any weight on the magazine article, due to it being general in nature and the time since it was published.
Minor issues with specific fees were addressed adequately by the trustee service’s proposed compensation and did not need to be further investigated.
We considered that the trustee service’s offer of $1,500 was reasonable compensation for minor errors in invoicing.
However, it was our view that further compensation of $500 was appropriate for the stress and inconvenience caused by the delays, and for the considerable amount of time Nathaniel spent challenging the fees.
Both parties agreed to settle on this basis.
Insights for consumers and participants
Clients of a trustee service should be aware that fees beyond the fixed fees may be charged, no matter how simple the estate administration is. This is because all estate administration is different, so the fees cannot always be confirmed before the estate has been administered.
Trustee services should be careful to correctly record all steps in the administration process to avoid unnecessary delays and to ensure that invoicing errors do not occur.