A Guide for Court Ordered Trusts

ContentsFor parents and carers 3

About NSW Trustee & Guardian 3

Who does NSW Trustee & Guardian report to? 4

What is the role of a Trustee? 4

What are NSW Trustee & Guardian’s fees? 5

How does NSW Trustee & Guardian administer the funds? 6

How do we advance funds from the Trust? 6

What do I have to do to have funds advanced? 8

How do we balance parents’ and our obligations? 8

Frequently asked questions 9

Please remember 11

NSW Trustee & Guardian provides secure and

professional administration in court ordered trusts.

2 NSW Trustee & Guardian A Guide for Court Ordered Trusts

For parents and carersThis guide explains the role of a Trustee and how NSW Trustee & Guardian provides administration for minor children or a person with a disability in Trusts awarded by the court system. Our aim as a Trustee is to give you fair and impartial advice, administering the Trust with understanding and professionalism.

This guide does not provide information on Trusts created by a Deed or Will (a Testamentary Trust).

About NSW Trustee & Guardian As a provider of independent trustee and financial management services, NSW Trustee & Guardian has been trusted by the people of NSW for more than 100 years.

Trustee services:

• Will Making • Powers of Attorney

• Will Safe Storage • Deceased Estate Administration

• Trust Administration

NSW Trustee & Guardian’s fees and commissions are set by government. We will always take time to explain our fees and provide assurance that our professional services are value for money.

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Who does NSW Trustee & Guardian report to?NSW Trustee & Guardian must comply with the Trustee Act 1925 and the NSW Trustee & Guardian Act 2009 and is answerable to the Court for the performance of our Trustee duties. We provide an annual report to state parliament through the Attorney General, disclosing how we manage our business and meet our Trustee obligations.

What is the role of a Trustee?A Trustee takes responsibility for administering the funds awarded to the person by the Court, generally until the person turns 18 years of age.

It is our obligation to see that the Trust funds are used properly for the benefit of a child or for a person with a disability. This means that NSW Trustee & Guardian will determine appropriate expenditure and invest funds prudently.

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What are NSW Trustee & Guardian’s fees for administering a court ordered trust?NSW Trustee & Guardian charges a one-off trustee fee on the amount awarded by the Court. The trust management fee is charged each year for the on-going administration of the trust.

Fees (including GST)

One-off trustee fee

Based on asset values:

3.85% on the first $100,000

2.75% on the second $100,000

1.65% on the third $100,000

0.55% any amounts over $300,000

Minimum fee of $220

Trust management0.77% per year on value of assets held (excluding the principal place of residence)*

Account keeping $132 per year

Investment0.11% per year of value of assets invested in NSWTG investment funds

* For some categories of trusts, including but not limited to testamentary, inter vivos, trusts for sale, or trusts resulting from a family provision claim, the principal place of residence is included in the asset total.

For the investigation and lodgement of tax returns, NSW Trustee & Guardian charges a minimum $275 (incl. GST) for up to one hour and up to $220 (incl. GST) for additional hours if required.

Additional feesOur fees do not cover costs from other organisations e.g. banks, valuers and services related to real estate assets including buying and selling, and out of pocket expenses such as postage, phone and photocopying.

There may be further costs if legal advice or investment planning services are required, or if overseas assets are involved. Our full fee schedule is available at www.tag.nsw.gov.au/fees

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How does NSW Trustee & Guardian administer the funds?Part of our role involves investing the funds awarded by the Court. As a Trustee we are required by law to invest this money carefully.

The things we must consider are:

• the needs of the person

• the value of the Trust

• how long the Trust will run for

• the effect of inflation and taxes.

NSW Trustee & Guardian has one Common Fund with two investment portfolios. All funds are initially placed in the Primary Portfolio which is made up of cash and fixed interest investments that provide accessible cash and an investment for the Trust. Where more growth potential is required over longer term Trusts, funds are invested in a Growth Portfolio that includes investment in the leading two hundred companies on the Australian Stock Exchange.

How do we advance funds from the Trust?Funds may be released for the person’s benefit while the Trust continues. This is generally until a child turns 18 years, but can continue if a person is not able to look after their own affairs.

To make things easier for you, we often allow a fixed amount for routine expenditure. We call this ‘maintenance’ and we ask for your help to work out the amount paid. This can be paid weekly, fortnightly or monthly depending on the child’s needs.

NSW Trustee & Guardian may require written details about proposed spending before we decide to advance funds because we need to have a detailed record of how we meet our obligations as Trustee. Our criteria for advancing funds have been formed over the many years we have administered the thousands of Trusts in our care.

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Each advance of funds must be considered by NSW Trustee & Guardian to ensure the person’s financial interests are fully protected, noting that a Trust can last a number of years. This requires careful planning by us in conjunction with parents/carers. We thank you in advance for your understanding regarding our role as a responsible and careful Trustee.

It is important that you do not incur expenses before you talk to us about advancing funds. For instance, purchase of a car is not generally approved unless the person holds their provisional driving licence and can demonstrate a practical need for a motor vehicle, or the car is needed by the parent/carer for the child’s benefit. It is also important that all receipts are kept for any purchases made.

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What do I need to do to have funds advanced? Before we can make payments from the Trust we require parents/carers to complete a Trust Declaration form. This makes sure that the parent/carer understands their obligation to use any funds paid to them for the maintenance, education, advancement or sole benefit of the child.

If regular maintenance payments are sought, there is a second form called a Maintenance Application form. This allows the parent/carer to request either regular maintenance payments, or an advance of funds for a specific amount. Both the Trust Declaration and Maintenance Application are Statutory Declarations, and the parent’s/carer’s signature must be witnessed by a Justice of the Peace. The form also requests details of the parent’s/ carer’s income. Your client service team can make these forms available for you.

How do we balance parents’ and our obligations?A parent has the legal responsibility to provide for their child. The Trust funds can assist in the child’s maintenance, education and benefit in conjunction with the parents’ usual income. We consider the parents’ financial position in working out the amount of regular maintenance required. We respond to demonstrated need, balancing the immediate and long term needs of the child.

For carers/guardians, we still need to find out details of benefits and allowances they may receive for the child so we can properly balance the use of the fund.

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Frequently asked questionsCan you tell me the balance of my child’s account over the telephone?

For confidentiality purposes and to comply with privacy guidelines, NSW Trustee & Guardian is unable to provide any details of the account over the telephone. However, NSW Trustee & Guardian can provide these details in writing.

Can my child request funds without my consent?

As your child is under a legal disability, that is, under 18 years of age, requests for funds usually can only come from the child’s legal guardian. However, in special cases, this may be varied where there is genuine benefit in what the child is requesting and the child is old enough to understand the value of what is being spent.

What if I change my address?

If you change address it is important to let us know so that we can continue contact with you concerning the Trust.

What if my child leaves my home?

You must advise us as soon as possible and we also need to know your child’s new address.

What if the care and custody arrangements of the child change?

If this occurs, we should be advised immediately as this can affect how we pay for general maintenance and matters.

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Are the funds awarded to my child going to be taxed?

The capital amount received (the amount stated in the Court order) is not taxed. Tax only applies to the income earned by the Trust. A Trustee tax return may be required to be lodged depending on the income earned. Any tax liability will be paid from the Trust fund. Trustee tax is assessed at personal income tax rates.

If funds are invested in our Growth Portfolio, any gain realised when the money is withdrawn will attract capital gains tax.

When do we communicate with you?

We liaise with parents/carers in the planning of Trust fund administration to best provide benefit for the child.

Annual investment reports are provided for Trusts over $100,000. For all other requests, we can be contacted anytime during business hours.

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Please rememberWe are committed to ensuring you receive quality services and we place a high value on feedback from our clients. If you have any issues or concerns, contact your client service team for assistance. If you would like to write to us, post letters to:

NSW Trustee & GuardianLocked Bag 5115Parramatta NSW 2124

Notes

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Have you planned ahead?A Will, Power of Attorney and Enduring Guardianship are important legal documents for planning ahead. Providing for your future legal, financial and health decisions, they help ensure that you and your loved ones will be looked after as circumstances change through your life.

You can make your Will, Power of Attorney and Enduring Guardianship documents at a plan ahead day or one of our branches. We regularly hold plan ahead days at community venues across NSW. Check our website for upcoming days in your area www.tag.nsw.gov.au/planahead

There is an agent for NSW Trustee & Guardian at every Local Court in NSW. Service NSW Centres also offer information on NSW Trustee & Guardian services.

Branches

• Bathurst• Broken Hill• Lismore

• Newcastle• Parramatta• Port Macquarie

• Sydney CBD• Wagga Wagga• Wollongong

Services

• Will Making• Will Safe Storage• Power of Attorney• Enduring Guardianship

• Trust Administration• Deceased Estate Administration• Financial Management

Contact us1300 364 103 (local call cost only)

+61 2 9240 0700www.tag.nsw.gov.au