Page 1256 - Week 05 - Thursday, 25 June 1992
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By changing the basis of trustee company charges to fees for service, the Bill will put trustee companies on a level with other professionals involved in estate administration, such as solicitors, and allow them to charge for the work actually done in the process of administration. This deregulation will have advantages for beneficiaries of deceased estates as they will be paying only for work done. No longer will they be subsidising the more complex estate administration. Trustee companies will be able to compete by setting competitive scales of cost in order to make it attractive for people to appoint them by will as executors or for executors to join with them in the administration of an estate. In order to provide a safeguard, the Bill contains a provision to prevent the fees being raised after the estate has been committed to a trustee company for administration.
The final aspect of this Bill is that it allows trustee companies in the ACT to operate common trust funds. These are generally known as common funds and are permitted in all other jurisdictions. Common funds provide a mechanism for trustee companies to pool moneys held by them on trust for a number of clients and to invest those moneys as a lump sum. This clearly provides advantages to beneficiaries and other investors as it gives them access to the higher returns available on investment of larger sums. The money continues to be held on trust and may be invested only in authorised trustee investments. This reform, in particular, is long overdue and it will bring the ACT into line with the States in this area. Madam Speaker, I present the explanatory memorandum for the Bill.
Debate (on motion by Mr Humphries) adjourned.
TRUSTEE (AMENDMENT) BILL 1992
MR CONNOLLY (Attorney-General, Minister for Housing and Community Services and Minister for Urban Services) (10.35): Madam Speaker, I present the Trustee (Amendment) Bill 1992.
Title read by Clerk.
MR CONNOLLY: I move:
That this Bill be agreed to in principle.
This Bill will amend the Trustee Act 1925-1942 of the State of New South Wales in its application to the Australian Capital Territory, which sets legal guidelines for trustees in the ACT. The amendments are mostly of a technical nature. The Bill includes a number of provisions which bring the legislation up to date by exchanging outdated references to other legislation for current terms.
In addition, the Bill expands the range of authorised trustee investments. These are investments of a secure nature which trustees are allowed to use for investing moneys held on trust. The Bill amends the Trustee Act to include deposits with a body corporate established by an Act of the Commonwealth or a State or Territory where the deposit is guaranteed by the relevant government. These deposits are secure and are consistent with existing authorised investments. The Bill also adds to the list bills of exchange which mature 200 days or less after purchase and which give the holder a right to get back from a bank the face value of the bill. The addition of these bills as authorised trustee investments brings us into line with the position in other jurisdictions, including New South Wales.
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