When Cora Whitfort needed to update her will, she turned to a trusted, century-old institution that makes them for free: Queensland’s Public Trustee.
She wanted her estate to be divided equally among her four children and, to ensure it would go smoothly, she altered her previous will to make the Public Trustee her executor.
Cora developed dementia about two years later and when she died, “dementia” was listed on her death certificate.
That meant that the Public Trustee, as the executor, had a legal obligation to make “due inquiries” about Cora’s capacity when she made her will back in 2011.
None of her family could have predicted those inquiries would lead to almost two years of anguish for those left behind and cost the estate more than $20,000.
Her son Chris Whitfort cannot understand why the authority went to such lengths when no-one in the family was disputing the will.
“She had been share trading. She’d been driving a car, her doctor had not taken a license off her at that time. So, there was nothing that we saw in that period that suggested there was any cognitive degradation,” Mr Whitfort told ABC Investigations.
Estates lawyer Lucy McPherson said it should have been resolved much more quickly since the officer who prepared the will told the Public Trustee he would not have done so unless he was satisfied that she had capacity at the time.
“One would expect a little bit of common sense to prevail,” Ms McPherson said.
“To satisfy that issue of capacity on the death certificate should have taken no more than a couple of hours of additional work.”
“You’re looking at under $1,000 of additional work.”
Crucially, the Public Trustee had received a report early on in its investigations showing that Cora had passed a cognitive test at her doctor’s surgery just three weeks before she went to make her will.
Mental assessments and doctor’s certificates are often requested by lawyers when an elderly person is making a will to ensure they have capacity. Cora scored 27 out of 30 on her test, indicating normal mental cognition.
The Public Trustee’s current CEO, Samay Zhouand, was not in the role at the time but said its lawyers continued to investigate “because they wanted to ensure that there was no other conflicting information”.
“The individuals involved can rightly feel frustrated from some of these things. Unfortunately, as a matter of law, the Public Trustee is required to fully inform the court so … [it] is fully informed and satisfied that the person had capacity,” Mr Zhouand told 7.30 in his first TV interview.
Ms McPherson said the Public Trustee office’s extensive research and fees were unnecessary, and potentially constituted overservicing.
“If all of those who are beneficially entitled to the estate are not agitating the validity of this document, why was it necessary to go to such great lengths? It wasn’t necessary at all,” she said.
The Public Trustee’s lawyers chased down medical records going as far back as 1995.
They also tracked down the clerical worker who had witnessed Cora’s signature on the will seven years earlier.
“It was just this merry-go-round looking for information, and they’d get a bit and that wouldn’t be enough, and they’d have to get some more, and we never really knew what the end goal was, Mr Whitfort said.
Mr Zhouand said the Public Trustee had to continue investigating because there was an earlier will in which Cora had promised her house to her grandchildren.
However, because that property had been sold, both wills were effectively the same with the entire estate left to her four children, a fact that the Public Trustee itself accepted in its final application to settle the estate.
The estate was finally settled in 2019, almost two years after Cora’s death. Chris Whitfort demanded the legal bill and found the estate had been charged $378 per hour for his investigation into his mother’s capacity.
“I thought it was mining the estate and doing it properly, legally within the letter of the law,” he said.
The Public Trustee of Queensland is an entirely self-funded authority, receiving nothing from the state government but relying on fees, commissions and taking part of the interest from its clients in order to operate.
Mr Zhouand said: “The fees and charges of the Official Solicitor’s office … are comparable to a mid-tier firm.”
He also apologized to the family “if the Public Trustee has not met their expectations” and encouraged them to file a complaint.
Trustee office accused of charging fees for no service
Luka was just one and a half when her father Clay took his own life.
He did not have a will, so his estate, including $72,000 from his super fund, was handled by the Public Trustee.
Luka’s mother Helen, as a single parent with no income, needed financial assistance to care for her daughter, and over five years she was approved to use about $12,500 from the trust.
After that she said there was no contact with the Public Trustee for several years.
When she eventually reached out to the office, she discovered Luka’s fund had dropped to $46,000 back in 2013 and had remained at that amount ever since.
Mr Zhouand told the ABC he could not speak about Luka’s case because she was a minor but said “the impact of the global financial crisis, and other factors such as withdrawals for maintenance do lead to a reduction in capital”.
Financial planner Dacian Moses reviewed Luka’s files and said the Public Trustee office made the “unforgiveable” mistake of selling Luka’s shares at a loss after the global financial crisis and putting her money into a low-return cash account.
“The only time you really absolutely lock in a loss in the share market is if you sell after they fall in value,” he said.
In addition, over the past 16 years, the Public Trustee has taken more than $14,000 in fees from Luka’s account which has eaten up all the interest earned on the account.
“It would have performed a lot better if it had just been left alone in a bank account,” Helen said.
Luka was also charged a “service fee” of about $400 each year, but the ABC could find no evidence of any transactions on Luka’s behalf on her statements.
However, it also says it can charge a fee of $444 a year even if there are no transactions.
Luka’s statements over the past nine years show no evidence of any transactions on her behalf.
Mr Zhouand said the fees that customers pay “includes the support and servicing of them in terms of … paying maintenance and paying bills and things of that nature”.
“We didn’t receive any support or services at all. We don’t know these people,” Luka’s mother said.
“It was going to be an 18th birthday gift for her from her father and so it’s disappointing that it has played out this way.
“I certainly don’t have any trust in the Public Trustee.”
Mr Zhouand has said the Public Trustee’s fees “are on the lower end compared to some of the private trustees” and Luka could apply for a review.
Queensland’s Public Trustee office invested Luka’s money in its own managed funds, allowing it to earn a commission and take part of her returns.
This practice was criticized by the Office of the Public Advocate — another government body which supports people who lack mental capacity — as being in conflict with the trustee’s fiduciary duties.
“I think that there is an inherent conflict of interest in the business model with the Public Trustee in that there are the revenue-raising activities within the Public Trustee, when the Public Trustee is supposed to be serving the clients, whom they are acting for. ,” estates lawyer Lucy McPherson said.
Mr Zhouand said investing clients’ money in the Public Trustee’s investment funds and taking some of the interest had been “authorized by multiple parliaments” in order to “fund operations and services to fund support for our vulnerable customers”.
“The vast majority of the Public Trustee customers receive a quality service at an affordable price. Having said that there is always room for improvement” he said, encouraging clients who were unhappy to apply for a review.
Earlier this year, Four Corners exposed the treatment of financial administration clients under Queensland’s Public Trustee office including how it charged high fees and mismanaged their property and financial affairs.
The state government announced two inquiries following the program. Another review into its fees and charges — which was prompted by a scathing report from the Public Advocate in 2021 — will be released by the government later this year.
Additional research by William Creamer
Watch this story tonight on 7.30 on ABC TV and ABC iview.