It is beyond question that the Public Trustee performs an important role in the community, particularly where there is no other person able to handle the affairs of a deceased or incapacitated person. However, where there is a viable alternative to appoint a family member or a close friend, they should be given careful consideration given the pitfalls of a professional trustee controlling your affairs.

We see a number of wills prepared by the Public Trustee appointing the Public Trustee as the executor where the will maker has left their estate to their spouse, children or other family members.

As the person charged with the duty of administering your deceased estate and making distributions to your nominated beneficiaries, your executor performs a very important and responsible role. While it may seem like a good idea at the time to appoint the Public Trustee, that appointment effectively removes the decision making power from members of your immediate family, which can have quite unexpected consequences.

Consider the following example where John and Dorothy are an elderly couple who own their home in John’s name only and have no superannuation, insurances or other savings, and survive on the aged pension. John has made a free will with the Public Trustee and appointed the Public Trustee as executor, directing them to pay out his funeral costs, debts and expenses and to then leave the rest of his estate to Dorothy. Unfortunately, John had amassed some medical and hospital expenses which, along with his funeral expenses the Public Trustee determines can only be paid from the sale of the house leaving Dorothy to find another home, but she will also need to wait until the house is sold before she gets a final distribution from her late husband’s estate.

This is an extreme case but not unfamiliar, and there are several steps that could have been considered to prevent the outcome, including making a family member the executor so that they might have a clearer insight into the intentions of the deceased to avoid the sale of the home out from under Dorothy.

We find that most people understand the value of a will as the formal and legally enforceable direction stating what should happen to their assets following their death, and in fact we might suggest that a well-drafted will can be a gift in itself. On the other hand, people often don’t fully consider what would happen to them or their assets if they suddenly lost the ability to make decisions for themselves, whether through accident, illness or just simply, old age. People assume that their spouse or next of kin would simply step in and take over, however from a legal perspective it is not that simple, or that easy.

The best way to ensure that you are “covered” is to make an enduring power of attorney. This document allows you to appoint a person or persons as your Attorney, who are then legally permitted to make financial and/or personal/health decisions for you should you lose capacity, or in some cases, commencing immediately.

If validly appointed, your Attorneys become entitled to make decisions and handle your affairs as if they are you. An enduring power of attorney endures past the point of incapacity. It makes plain and simple sense to appoint Attorneys whilst you are of sound mind and can properly consider who would be the best person or persons to act on your behalf. In any event, once capacity has been lost, you cannot make an enduring power of attorney so the opportunity to put in place a mechanism for control (once your capacity is gone), has been lost.

“But”, you may say, “I don’t need an Enduring Power of Attorney… there’s nothing wrong with me”. Loss of capacity means loss of your legal life. It’s that simple and it can happen to anyone, at any time. Loss of capacity could have a profound impact on your life, and on your family members thrust into a position of responsibility with no legal power to act.

To add a further complication, if there is no lawfully appointed attorney a court may order the Public Trustee to be appointed to manage your affairs if you become incapacitated, which can involve significant and ongoing expense to your estate over many years.

There is often some confusion about the Public Trustee’s charges which are not based on a percentage of the value of the estate but in fact are based on a series of complex tables containing charges based in part on the concept of standard units of effort, an annual charge, fees per transaction or hourly rates.

The appointment of a trusted family member or friend, in most cases, does not involve the payment of such fees.

Life is uncertain….don’t leave your future up to chance. Make a Will and Enduring Power of Attorney to ensure that your life is managed the way you would like it to be and by the person/s of your choice, so you may have confidence that your wishes will be honoured.