Financial Administration & Trustee

What is Financial Administration?

Funds held by an executor or a trustee for anything longer than a short period are generally required to be invested for the benefit of the estate or beneficiaries.

In deceased estates, this occurs when the estate has infant beneficiaries, or the executor is directed to hold funds on trust for particular purposes.

The estate share left to infant beneficiaries can generally be used for their maintenance and education, with the capital to be paid to them.

Either when the beneficiary attains a particular age or on the occurrence of an event specified in the deceased’s will.

Outside of deceased estates, a trustee or administrator might receive funds in different circumstances, e.g. for the benefit of an infant or adult beneficiary as a result of a court or tribunal order.

A court might order, for example, that insurance proceeds due to an infant child for loss of dependency and services resulting from the death of his or her parent in a motor accident be held by the surviving parent in trust for the child until they attain the age of majority.

A tribunal order occurs in the circumstances such as when an adult with impaired capacity is unable to manage their affairs, and an administrator is appointed to do so for them.

In all these cases, the trust funds (or finances) must be “administered” by the executor, a trustee or an administrator. This includes their prudent investment and deciding what payments should be made for the maintenance, care and/or education of the child or adult beneficiary.

Estate funds must be administered in accordance with the terms of the Will and laws that apply, and generally for the growth and protection of the capital as well as in respect of the appropriateness of payments to a beneficiary’s parent or guardian for the beneficiary’s well-being.

A trustee of non-estate funds has similar duties, but administrators appointed by QCAT have different obligations. The differences are significant. It is important to get advice to make sure you are fulfilling your duties correctly.

Financial administration services (whether for an executor, as trustee or as administrator) are offered by the Public Trustee, private trustees and by suitably qualified professionals.

Many estate practitioner law firms offer advice on or provide financial administration services to their clients and those of other law firms who refer to them for that purpose.

Qld estate Lawyers is one such law firm. We offer expert and cost-competitive financial administration services and advice to executors, trustees and administrators.

Whether related to court-ordered compensation as a result of an accident or other reasons, estate funds or other trust funds or administrator appointments.

Get financial administration legal advice from an expert team member who is available to meet with you at our Brisbane Head Office, at our Princess Alexandra Hospital office or at our Browns Plains Medical Precinct satellite office.

Call or email today to get expert financial administration advice from a Wills and Estate Lawyer at QLD Estate Lawyers.

Administration of investments

Investment of estate or trust funds for growth and protection of the capital is best conducted through reputable and licensed financial advisors who in the course of preparing a Statement of Advice containing a financial plan for an executor, trustee or administrator attend to the following:-

• recommend an appropriate asset allocation having regard to a reasonable low-risk growth target;
• recommend professionally researched investment products, eg balanced index funds or managed funds having regard to decided asset allocation;
• discuss what products and strategies will meet their investment goals.

The executor, trustee or administrator is ultimately responsible for overseeing the investment strategy that the financial advisor has recommended and should monitor performance reports that the advisor provides.

Administration of trust funds for beneficiaries

Until a child beneficiary becomes an adult, it is usual for their parent or guardian to request drawdowns from the fund for the maintenance, care and education of the child.

In other trusts the executor or trustee will need to consider requests for funds made by the beneficiary provided for.

All such requests must be verified and assessed both in terms of the beneficiary's need and the effect on the fund of making the requested payment.

The capacity of the fund to make payments is usually governed by the level of income from the capital invested.

The executor or trustee is responsible for making these decisions together with the trustee and then instructing the transactions required to implement the decision, eg payment to the beneficiary's guardian or parent or direct a supplier, eg a school for school fees.

The executor or trustee is also responsible for reporting on the fund's performance to beneficiaries.

Administration of adults' funds ordered by court or tribunal

When an administrator (rather than a trustee) is appointed to manage a compensation payment for an adult, or sometimes all financial matters for that adult, where the adult has impaired capacity the administrator has to consider the needs of the adult as paramount and manage the funds for the benefit of that adult.

Requests for funds may come from that adult or family or friends or others who are caring for the adult.

Such requests must be verified and assessed both in terms of the adult's need and the effect of making the requested payment on the fund’s ability to provide for that adult’s needs into the future.

The considerations such an administrator has although similar are not the same that an executor or trustee has to make for their beneficiaries.