PREPARATION OF WILLS

Evening Post, Volume CXI, Issue 72, 26 March 1931, Page 8

PREPARATION OF WILLS

ADMINISTRATION OF ESTATES

STATEMENT BY PUBLIC

TRUSTEE

The following statement has'1 been for warded by the Public Trustee:-—

An important judgment was-, recently j delivered by his Honour-Mr. Justice Blair, which related to an application made by the Public Trustee under Section 13, sub-1 section (1), of the Public Trust (Mice Act, .1908; for the consent of the Court to the appointment of the Public Trustee as executor of the will of a deceased person and for probate accordingly, and which received considerable publicity in the Press throughout the Dominion. As his Honour's remarks in the abridged form in which they appeared might give rise | to doubt on. the part of those unacquainted with the actual position, the Public Trustee feels that a statement is necessary in view of the fact that he at present holds the wills of 73,000 living testators, who are vitally interested ia the Public Trustee's charges. Ilis Honour commented on the practice of advertising the fact that the Public Trust Office prepares wills free of charge in those cases ■where the Public Trustee is appointed-executor, and questioned whether the preparation was in fact free. It should be explained that in the case before his Honour the will was drawn by j an-outside practitioner, and appointed the widow sole executrix and beneficiary. The testator, a Master of Arts and Doctor of Laws, had had business relations with the Public Trust Ofliee over a long period o£ years, and his widow voluntarily approached* the Public Trustee with a request that he. should undertake the administration or the estate. It was under these circunistances that application was made to the Court for the appointment of the Public Trustee as executor. The question as to. the propriety of the Public Trustee's advertisements was therefore never in issue in the case, and his Honour's remarks on' the subject are merely obiter dicta. Had-;the question been in issue the Public Trustee would have taken steps to Bee that the whole of the facts bearing upon the question were brought to his Honour's notice, and attention would have been drawn to the regulations and ofliee practice bearing on the matter. The Public Trustee states that no charge is made for the- preparation of a will, cither at the time of preparation or subsequently. To dispose of the suggestion that the Public Trustee, although making no charge at the time the will was prepared, nevertheless recouped himself for the cost of preparation when the estate came in for administration, a regulation was made binder the hand of His Excellency the Gov-ernor-General on the sth December, 1029, and published iv the "New Zealand Gazette" No. 85. of tho 10th December. 1929, in the following terms:— ••For the preparation by the Public Trustee of a will appointing the Public Trustee the executor no charge shall be made either at the time of preparation or ■when the estate subsequently falls in lor administration." NO EXPRESS FEE CHARGED. That no express charge is made ;it any time for the preparation of a will is further proved by the fact that the commission charged by the Public Trustee for the administration of an estate is the same ■whether the will ia prepared by tbeiublie1 Trustee or whether the will appointing him. as executor ia prepared by an outside practitioner. When assessing the commission payable in an estate this factor is never allowed to weigh with the Public Trustee. It may be urged that although no, express fee is charged, the cost of the ■work must fall in some manner upon the legal .staff of the Public Trust Office. The Public Trustee points out that this stiiir undertakes a considerable amount r.t letrnl work in addition to the drafting ot wills, Mich as the preparation of mortgages or debentures securing loans granted by the Public Trustee to various classes of borrowers, and the fees thus derived, though based on a realc which compares very favourably with that authorised for outside practitioners, arc sufficient owing to the large volume of work transacted, by the office to pay in full for the services of the legal staff including those officers wlio are engaged on the preparation of '"'The Public Trustee further points out that certain trust companies operating in the Dominion have made provision tor the preparation of wills, appointing them executor free of cost to testators, the will' in such cases being drawn by legal practitioners, whose fees are paid by the trust companies concerned. QUESTION OF ADVERTISEMENTS. The practice of the Public Trustee in advertising .the fact that wills are prepared free of charge to testators -was for many rears a. source of contention between the icjnil profession and the Public Trust Office, and following a prolonged pmod ot tension the matter frame to ;r head m 1023, when the executive of f'C Acw./c-ji; land -Law Society, acting as file- representative of the profession tlifmiehbnt "\e Dominion, approached the Public Trustee not' only with regard to this particular aspect of the Public Trustea's< advertising, but also with regard to the" general'question of the propriety of-.'such, advertising.* The rrnresentfitives' of'the New Zealand Law Society appointed to confer with-the Public Trustee on-'the matter were the late Sir Charles Skerrctt (then Mr. C. P. Skerrett, X.C.. president, of the society), and Mr. Alexander Gray: (then

vice-president, and now president, of the society). The result of the discussion which took place with these eminent practitioners was embodied in a. letter addressed to the Public Trustee on the sth. July, 1023, by Mr. (J. P. Skerrett, ,K.G., the relative portion of -which reads as follows :->- . _ "As you are aware, Mr. dray and 1 have perused the whole series of advertisements which it is proposed to use by your ofliee and have come to a substantial agreement, ■with you for the elimination of any matter which might be regarded as objectionable by the profession.- In reviewing these advertisements we. have felt that we could not object tv any properly expressed statement by • the Public Trust Office that it is prepared to prepare wills free of charge. This practice, we under- ' stand, the board of the Public Trust 01----fico is not prepared to forego, and this ■ being so, we think it is impossible to deny , your right to advertise the fact in a suitable way." ■. , ; The series of advertisements was subsequently perused iv detail, and the particu- , lar advertisement; dealing with the preparation of wills by the Public Trustee ' was approved by Sir Charles Skerrctt and Mr. Gray, subject to tho addition ot the • words "if he is appointed executor to the standard form. This suggestion was readily adopted by the Public Trustee anil : the additional words have since continuously apepared in the advertisement, me , late Sir Charles Skerrett, whilst senior partner of the firm of Chapman, fekerrctt, Tripp/ and Blair, and subsequently during his occupancy of the position ot Uitct . Justice, gave no indication that any change had occurred in his opinion regarding ' this matter, and it must be assumed that up to the date of his death he regarded the practice of tho Public Trustee in connection with such advertisements as unexceptionable. The Public Trustee observes that tho New Zealand Law Society, which for years made- strenuous efforts to pre- , vent the Public Trustee from advertising i the services provided by the Public J rust Ofliee, apparently took no steps to uiter- , fure in this regard with the trust companies, which operate i nthe Dominion, and lias now itself embarked on an extensive programme of advertising on bc--1 half of the legal profession generally. CHARGE FOR ADMINISTRATION. "With reference to his Honour's comment that under the scale of fees approved for the Public Trust Office the charge for administration of the estate would exceed that for which a- private ' practitioner would be prepared to undertake tho work,; the Public Trustee points out- that tesators and beneficiaries in estates might, iv flome cases prefer that the administration should bo entrusted to the Public Trustee, even though the fee were to exceed m some degree that which, would be charged by an outside practitioner as it is recognised that administration-by the Public Trustees posseiijs certain advantages not obtainable in tho case of private administration. Fur example, the benefit of the State Guarantee is obtained by beneficiaries, and the fee charged covers not only the advice and professional services of expert officers, such as the Office Solicitor, the Financial Adviser, and the Farm Inspectors, but also many services, such as the obtaining of grants of administration, the preparation and iiling of stamp accounts, the preparation of land and iucome tax returns, the supervision of repairs to properties, the settlement of mortgages, the registration of the Public Trustee's title to property, and the preparation of conditions of sale, for all of which, if administered elsewhere, estates would as a rule have to pay special fees. Nevertheless, the Public- Trustee, freely concedes that any iixed scale^of fees which is intended to apply to estates generally may operate inequitably in some particular case, but this possibility has always been recognised and full provision to meet it has been made in the regulations applicable to the office. Paragraph 24 of the regulations made under-.the hand of His Kxcelk'ncy the Governor-General on tho 'JOth August, 1923, and published in the New Zealand "Gazette," No. 6-1, of the 23rd August, 1023, reads as follows:— "The Public Trustee may induce any of the foregoing charges to meet the special circumstances of any estate." A similar regulation had been in force for. many years previously. That practical effect is given to the regulation is evidenced by the standing instructions to officers which were issued in .September, 1021, and which read:— "When accounts are being prepared and before they are sent out of the office, consideration must be given to the office commission and charges to decide whether, in view of the work and the responsibility,, involved in the administration, any reduction should be recommended for the Public Trustee's approval." This instruction incorporates the substance of a prior direction which has been on record since the Ist November, 192], and the-attention of officers has been drawn to it on several occasions. One such reminder reads:— "One matter calling, for discrimination and careful. review is the question of charges. Attention "has already been drawn to this matter; but it is deemed advisable again to bring it under notice. When accounts are being prepared, and before they are dispatched, consideration is to.be given to the office commission charges to decide whether, in view of the work and responsibility involved in the administration." any reduction .should be recommended- for the consideration of the Public-Trustee; While it is desired that in ■ lively case the charges of the office shall .be a .sufficient remuneration for its services, yet at the same time, in order tili.it, there may bo no just cause for complaint,; every care is-to be taken to en.iiiro that the charges, made cannot be deemed unreasonable, having regard to the duties arid . responsibilities undertaken." , .... It will thus be seen that before the commissionl in ■ any • estate is charged in the accounts a. review is made and wher-

ever it is considered that the charge is iv excess of' the value of the work done a recommendation" is submitted t6 reduce the amount accordingly. It; should again bo emphasised that in fixing the amount of commission payable no charge is included for the preparation of the will. Tho Public Trustee is iv a position to assure those who do business with the Public Trust Office that this provision is i'reely exercised, and numerous letters are held in which beneficiaries and clients have expressed their appreciation of the moderate charges which the Office has imposed. The Public Trustee claims that it can safely be said that viewed generally the charges made by the Public Trust Office compare favourably with those made by tlio legal profession. Owing to the fact that no scale of i'.ces is provided by the j New Zealand Law Society for the administration of estates, a comparison under this heading is difficult, but where such a scale has been iixed by the Law Society, as in the ease of the preparation of mortgage deeds, it will be seen from the particulars shown herciimlcr relating to the fees for the preparation of mortgages by the Public Trustee's legal staff that the charges made by the Public Trustee are considerably lower than those authorised by the Law Society. deduction Horrent, from Law -Amount of Loan. . Society's Scale. tTp to ft 100 ' SO Over £100 uiiil up lo £500 -lii Over £500-mid up to £1000- 40 Over £1000 and up to £2000 ?>'> Exceeding £2000 33 1-:! The Public Trustee adds that in the particular case on which the comments i were made, his Honour, after affording the ■ Public Trustee an opportunity of fixing i the charge to be made for the udminis- i tration of the estate, appointed his executor, stating that the fee arranged was a fair and reasonable one, although this fact is not clearly stated in certain of the reports which appeared in tho Press.