How free wills are never free

This article is part 10 in a series. For the full series, go here.

Some readers may find aspects of this article distressing.

Tania Hawting believes her late partner John Munroe made a terrible mistake. After being diagnosed with terminal kidney cancer in 2005, he signed up for the Queensland public trustee’s free will service to ensure Hawting and their son, Ethan, would be looked after when he died. 

The public trustee became executor of Munroe’s will and estate. 

The way it was described to him, Hawting said, was that the state would act like grandparents, helping to manage his property and disperse funds while the family grieved. 

Instead, she and Ethan are on the brink of homelessness, with most of Munroe’s assets squandered by the trustee’s high fees and court cases to access funds. None of his money, or the $100,000 he had put aside for Ethan when he turned 18, have accrued investment returns. 

From a wedding to homelessness

Munroe and Hawting dedicated their lives to helping people in crisis. They met at a child protection conference in 2002. She worked for a domestic violence service, and Munroe was a counsellor for children from abusive homes. Hawting had three older children from a previous marriage.

They soon started a long-distance relationship; Hawting travelled up from Brisbane to Munroe’s home in north Rockhampton and when Ethan was born in 2004 she moved to Rockhampton permanently. 

They planned to marry — Hawting had bought her wedding dress — when Munroe was diagnosed with aggressive kidney cancer. She says Munroe was worried his estate might go to her former partner or her adult children, so he enlisted the help of the public trustee. He died in May 2006, aged 58.

In 2009 Hawting decided to move back to the Sunshine Coast with Ethan to be closer to her family. She asked if she could sell Munroe’s three-bedroom house, which had a granny flat, office and air-conditioning. It sold in 2011 for $270,000. Hawting says that was significantly less than what she had had the home appraised for in 2006. It is currently estimated to be worth between $310,000 and $390,000. 

The public trustee charged $8000 for undefined property maintenance, repairs, cleaning and inspections, nearly $9000 for selling fees and commission, and $998 for mowing services. 

Another $14,000 went on estate administration fees, additional services fees and incidental fees and another $7000 to finalise the estate. Hawting estimates $100,000 was taken from the estate in legal fees because she challenged the public trustee’s administration of the will.

“They’ve taken his $600,000 estate and turned it into nothing,” she said. 

After 20 years in the domestic violence space, Hawting was burnt out and started running a charity serving breakfasts to homeless people, before purchasing two small businesses. She suffers from arthritis and is approaching 60 and surviving on the disability support pension. 

She says the money she is entitled to comes in dribs and drabs. The trustee reimbursed her moving costs, but by 2013 it had given her just $16,500 because of financial hardship. Thirteen years after Munroe’s death, she says she’s been awarded about $100,000. 

“Just for a little while we weren’t below the poverty line,” she said.

Ethan is entitled to the $100,000 in trust when he turns 18 next year. Hawting says the money was not put into a savings account and has accrued zero interest. She and Ethan hope to use $65,000 to put a down payment on a house in the country so Ethan can get settled and start a TAFE course. Ethan has autism and needs consistency. Crikey spoke to Ethan to confirm he was happy for his story to be published and that he wanted to buy the property. 

But the trustee has said releasing the money to Ethan wasn’t viable because allowing a joint title on a house deed would go against its duty as executor, and it would be a poor investment because it would make Ethan ineligible for the first homeowners’ grant.

“I said, ‘I don’t think you’re in any position to decide what is a good investment given you’ve invested none of my partner’s money,’” Hawting said. 

She and Ethan are about to be kicked out of their rental property and are moving. 

“I’m too old to be homeless,” she said. “There’s no justice and there’s nowhere you can go. The [public trustee] just drag the court cases out as long as they can. I’m at the end of my rope.” 

Public Trustee Queensland (PTQ), agreed to advance funds from Ethan’s trust for emergency accommodation after Hawting provided information from a mortgage broker, and referred Hawting to a homelessness hotline.

Hawting lodged a complaint with the ombudsman, who decided not to investigate her complaint and referred her back to the trustee. 

The day after Crikey contacted PTQ it approved Hawting’s request for funds.

Free will services marketed by states 

Free will services have been marketed by state public trustees but — as with anything free — there’s a catch: unless an enduring power of attorney is implemented, the will comes under the control of the public trustee. 

PTQ prepared 218 free wills in the past year, and the West Australian public trustee manages more than 124,000, writing up 851 free wills last year. NSW drafted and executed more than 14,000 wills, powers of attorney and enduring guardian documents; Victoria sold more than 15,000 online and retail wills and powers of attorney kits; and Tasmania prepared 321 new wills. 

The Queensland Law Society paired up with the public trustee to promote its free will services, which is not means-tested and is available to anyone. One lawyer Crikey spoke to, who asked to remain anonymous fearing speaking out would jeopardise their career, says this was a conflict of interest. 

“[Queensland Law Society] is a professional body who is supposed to be your advocate for your rights and interests, engaging with another organisation in direct competition with the services they provide,” they said.

A spokesperson from the PTQ told Crikey there was no conflict of interest, saying “Queenslanders were encouraged to explore their options and make informed choices about their preferred advance life planning arrangements”.

Once the state gains power of attorney, it can invest money into its preferred organisations. The Queensland public trustee has also established the Queensland Community Foundation charity, which is sponsored by government investment company Queensland Investment Corporation. People can leave a gift to charity in their will through this foundation. 

The company’s objective is to allocate 80% of cash to the Public Trustee Growth Trust investment fund, managed by PTQ with a five-year plan, and a 20% allocation to cash, distributing the investment returns. It applied last year to the commissioner of taxation to relax rules requiring the charity to distribute 4% of net assets and preserve capital due to a lower returns environment with a goal to maintain funds in perpetuity. 

The bulk of the charity’s $5.5 million revenue last year came from deceased estates administered by the public trustee, and it distributed $3 million in grants. 

Limited accountability

State public trustees have no obligation to ensure those administering estates have the necessary legal qualifications. Legal firms have raised concerns that wills are poorly drafted and fees not properly disclosed. 

NSW Trustee and Guardian tells Crikey its financial managers come from a variety of educational backgrounds with qualified in-house services available when specialist advice is needed. 

Victoria says “many” of its staff managing estates and drawing up wills have legal qualifications and have a “diverse range of additional experience and expertise”. 

Queensland says there is no requirement for persons to hold legal qualifications to administer or manage a deceased estate and it engages with suitably qualified persons when necessary, and staff who draw up wills or enduring powers of attorney undertake specific and comprehensive training. 

“The Public Trustee has already commenced a comprehensive and independent review of all fees and charges,” the spokesperson said.

Queensland solicitor Flora Wellington says this is a massive concern: “If solicitors give the wrong advice, they are personally liable and can be sued, lose their jobs, law firm and practising certificate. If you get the wrong advice from PTQ there’s no accountability or recourse because they’re just giving advice and are not legally qualified.” 

She says appointing either the Queensland public trustee or another law firm as executor of a will means people cannot shop around and often face delays in payouts. Fighting wills takes place in the Supreme Court — the court with the most expensive fees in Australia. 

“From my work [with legal aid services] I see that the people PTQ most negatively affect are people with lower education and from lower socioeconomic backgrounds who don’t have the means to get other legal advice,” Wellington said. 

Although executors had a positive duty to not allow an estate to deteriorate, executors could argue the market did not safely allow investments.

“Just because they are called the public trustee does not mean that the public must trust them without question,” Wellington said. 

To read more pieces in this series, go here.

For legal reasons, please don’t identify yourself or others under guardianship or financial administration in the comments.