Friday 23 May 2008

Where there's a will, there's a fee

My parents are in their mid-70s and in pretty good health, but they recently decided it was about time that they finally got around to making a will. I'd suggested they do this many years ago, but my father doesn't really like to make plans at the best of times - so planning for his own death wasn't on the top of his "to do" list. My mother likes to be organised, but always felt that there was no point in her making a will if my father didn't do his as well. They were also very wary of letting other people know anything at all about their personal finances (unlike me), and didn't like the idea of getting their wills witnesses by a couple of neighbours or friends (even though the witnesses don't have to be shown the contents of the will being witnessed, just be aware that it is a will and witness the signing and dating of the will).

They finally arranged an appointment to see a representative of the NSW Public Trustee when they were having a "free will day" at the local shopping centre last week. My folks got the draft of their wills a couple of days ago and went in to sign them at the Public Trustee's offices yesterday. Of course it's very rare to find anything that is really "free" in life - in this case while the will preparation is free, that's because it names the Public Trustee as executor. Apparently the fees the Public Trustee is allowed to charge are much higher than most solicitors can charge (there is a set scale of charges for solicitors fees up to granting of probate in NSW). The {Public Trustee charges 4.4% of the first $100K value of an estate, 3.3% on the next $100K, 2.2% of the third $100K, and 1.1% of the estate value above that.

So, for an estate worth, say, $500,000, the public Trustee fee would be $12,100 (plus disbursements). In comparison, I think the typical solicitor charges less than half this amount for the same value estate (although it's hard to find published fee schedules). An even cheaper option is to name a trusted relative as executor, who wouldn't charge a fee if they are a beneficiary. The process of probate is very legalistic, similar to property conveyancing, but shouldn't be too hard for most competent individuals. All the required paperwork for probate in available on the NSW Supreme Court website.

I did find one free DIY will tool online via the Aami insurance website. It didn't quite cope with my parents situation (as it doesn't allow for specific gifts in a will, only for the entire estate to be left to one person, or several people in equal shares) but it will be interesting to compare that version with what my parents obtained from the Public Trustee. At least the Aami "free" will tool doesn't automatically tie you to any particular trustee as executor (you can nominate one or more individuals as executor), although it does have a page attached that recommends getting a living power of attorney - and advertises the services of the law firm that provided the free will tool. I also used this tool to generate a simple will for myself, which I'll get my parents to witness on the weekend (since they're not beneficiaries).

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