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Trustees, Trusts

Post facto reasoning

Rob Stock recently wrote (Sunday Star times, April 29, D8) about how rising fees were eroding the great legacy of Frank Sydenham and questioning whether, with hindsight Mr Sydenham would have written his will differently. 

Mr Sydenham’s will provided for the establishment of a trust estate, the income of which was to be used to encourage post graduate studies in horticulture and agriculture.  40 years on the conditions attached to the grants were such that the trustee needed court permission to amend the terms of the trust.   Mr Stock noted that the trust’s accounts for the year ended 2010 showed income $48,215 and trustee fees of $16,785.   While a significant portion of the fees related to extraordinary matters regarding the trust, it is fair to ask whether the fees represent good value.

While any argument the fees are reasonable can be countered by a contrary argument, it is useful to take a step back and say what kind of a deal has this been?  Well first off, 40 years down track, the estate is still solvent and appreciating.  This is more than can be said for many trusts in the hands of cheaper, but less experienced trustees.

Through the use of reputable trustees the trust has been managed in an accountable fashion. The oldest accounts available on the Charities Register show total equity of $763,000 in 2009, which has increased to $876,516 in 2011.  While Mr Sydenham might be disappointed that his original purposes are no longer achievable, perhaps he might be quite pleased to see the capital appreciating in the hands of a trustee that was concerned to obain court approval for an amended scheme that will still meet Mr Sydenham’s objectives at least in part. 

Fee management is important.  However, a better focus might be, not on the quantum of fee, but the safe and efficient management of the trust.

 

 

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