NOVA SCOTIA HOUSE OF ASSEMBLY
Wednesday, April 24, 2013
Office of the Public Trustee
Printed and Published by Nova Scotia Hansard Reporting Services
Public Accounts Committee
Hon. Keith Colwell, Chairman
Mr. Howard Epstein, Vice-Chairman
Mr. Clarrie MacKinnon
Mr. Gary Ramey
Mr. Mat Whynott
Mr. Brian Skabar
Mr. Andrew Younger
Mr. Chuck Porter
Mr. Allan MacMaster
Mrs. Darlene Henry
Legislative Committee Clerk
Mr. Jacques Lapointe
Ms. Ann McDonald
Assistant Auditor General
Mr. Gordon Hebb
Chief Legislative Counsel
Office of the Public Trustee
Ms. Estelle Theriault, Q.C., Public Trustee
Ms. Beverly Whittaker, Director of Finance, Administration and Systems
Ms. Anne Erly, Coordinator of Health Care Decisions Division
HALIFAX, WEDNESDAY, APRIL 24, 2013
STANDING COMMITTEE ON PUBLIC ACCOUNTS
Mr. Keith Colwell
Mr. Howard Epstein
MR. CHAIRMAN: Good morning, I’d like to welcome everyone to our committee meeting this morning. Before we introduce our members, I’d like to remind everybody either to have their phone on silent or turned off. Also, I have a note here for a request from Legislative Television to ask people not to adjust their microphones. According to the television staff, these microphones cost about $1,000 each and when they are moved around a lot, it causes wear and tear on them and they have to be replaced more quickly. With that, I would ask the committee members to introduce themselves.
[The committee members and witnesses introduced themselves.]
MR. CHAIRMAN: I’d like to welcome our guests this morning. Ms. Theriault, I’d like you to make a presentation, if you have one prepared.
MS. ESTELLE THERIAULT: Good morning. Many of you may not know much about the Public Trustee’s Office and I want to give you a little capsule. Nova Scotia’s Office of the Public Trustee is committed to properly administering the estates of children and people who are deceased, incompetent or missing. We also provide informed consent for health care decisions, including decisions of placement, nursing homes and home care services.
We make these decisions using an approach that is client-centred, respectful of human rights and freedoms, and is in the client’s best interest if the person’s prior wishes, values and beliefs are not known. We are independent of government. It is set up as a corporation to protect the financial and personal well-being of its clients. Its authority to act comes under 14 pieces of provincial legislation, most notably the Public Trustee Act, the Adult Protection Act, the Hospitals Act, the Incompetent Persons Act, and the Guardianship Act.
We have 25 full-time employees, all situated in Halifax, including lawyers, trust officers, health care professionals and accounting personnel. We also rely upon outside experts such as real estate appraisers, auctioneers and stockbrokers. We provide services in four main areas. First we manage the estates of living people who need a trustee or guardian because they are no longer mentally competent and can no longer manage their financial affairs. We protect the client’s financial interests by doing what the adult would normally do, looking after their own affairs, such as applying for pension benefits, completing tax returns, paying bills. This is one of our largest areas of growth. In the last fiscal year we had 387 files and we have already reached 445 files. You can see how the area is growing.
Secondly, the Public Trustee is authorized to administer estates of people who die with or without a will. There are various circumstances under which the Public Trustee takes these types of files and we opened approximately 60 such files last year. We have 156 deceased estates under our management and it has been said we have the largest probate practice, almost, in the province.
The Public Trustee is the decision maker of last resort for mentally incapable people. We provide informed health care decisions and nursing home placement decisions. In the past fiscal year we made 1,261 health care decisions.
Additionally the Public Trustee is regarded as a resource information centre for estate and trust law. We opened 352 inquiry files last year and we provide our expertise and knowledge to lawyers, social workers, health care workers, general public, and even on occasion to a judge. We find by helping people in this way, we are saving government money because in many instances, some answers to their problems can be found by them taking on the files themselves, but it also serves us in recognizing, quickly, if there is a file the Public Trustee should be taking on because there is an interest that we are mandated to protect.
In the past fiscal year we managed $47 million. The Public Trustee had a performance audit by the Auditor General and one of the biggest compliments he could have paid us, he paid, in that he said we managed the money under our care using a prudent investor approach, and that is high praise for a trustee.
With this praise came 16 recommendations on how we can better deliver our services. We have agreed with all these recommendations and we began implementing them right away. I’m extremely pleased to inform you that 81 per cent of the recommendations have been completed, in other words, 13 out of 16, and we have work well underway on the remaining three.
Suggestions have come forward, recommendations have come forward on how we can better protect the assets of our clients when initially entering the properties and we have started to implement new procedures in this regard and we are still gathering information on how we can best address this recommendation. We have already instituted formal performance review for all our employees and we have implemented a large number of policies, as you can see, having already achieved 13 out of the 16 recommendations.
I have been in the Public Trustee’s Office for 33 years. I joined in 1980, was appointed Public Trustee in 1992, and I must say I’ve always received a great sense of worth. By doing the work we do, we make a difference in the lives of our clients. I’m very proud to say that I am the Public Trustee and I’m very proud of the people I work with. I welcome any questions you may have.
MR. CHAIRMAN: Thank you very much. Mr. Younger, you have 20 minutes.
MR. ANDREW YOUNGER: Thank you, Mr. Chairman, and thank you for your presentation. I want to start by understanding the role and the limitations of the Office of the Public Trustee. I know there are a number of areas you deal with. First of all, I’d like to deal with deceased individuals and their estates. Obviously there’s a number of ways - I understand the Public Trustee can be named as an executor but also a case can be referred to the Public Trustee. I don’t think there’s any limitation on who can refer it to the Public Trustee, is that correct?
MS. ESTELLE THERIAULT: There is no limitation. There are several provisions under which the Public Trustee may undertake a file. Under the Probate Act there is a ladder of priorities of who is entitled to administer an estate if someone dies without a will. Of course the first party entitled to administer the estate would be the spouse and children, if they are resident in the province.
Then the next party entitled to administer the estate is the Public Trustee. After that, it is the heirs-at-law residing outside the province. Following that it is a creditor. Following that it is a trust company. Then there’s a catch-all provision at the end that says any other suitable party may administer the estate. We are also given provisions in the Public Trustee Act itself that gives us priority to administer an estate. For instance, the Public Trustee may have been acting as trustee or guardian of a person’s estate, an incompetent person’s estate, and they die. We may have had control of their assets for the last five or six years. Under the Public Trustee Act, Section 15, the Public Trustee has the right to administer the estate of that deceased person, in priority to even the next of kin in the province.
We also have priority to administer the estate if the following occurs: an individual may die with a will, the named executor is the wife and she is incompetent. The Public Trustee is already acting as her trustee. Normally, under estate law, the appointment of an executor is a private appointment, specifically for that person, but because the Legislature, I believe, realizes that we are protecting the interests of that incompetent person, the legislation is drafted in such a way that if the public trustee refused the matter, and we believe that it is appropriate that we administer the estate to ensure that the money due this wife, under her husband’s will, is going to be done properly and quickly, we have priority in the instance as well.
Citizens may contact us as well and we get files like this in many instances. Let’s say a person dies, he is divorced and he has two infant children. The only heirs-at-law are the children, not his mother, not his father, not his brother and sisters, because we are also, without court order, guardian of the finances of every child in this province for whom the legal guardian of the estate has been appointed. The Public Trustee has the priority to administer that estate, so in many instances when somebody dies and they have infant children, we know that in all likelihood we would be managing the money for those children, if there is money to - we estimate, we get all kinds of information, what’s in the estate, what are the debts, et cetera, we would exercise that priority. So there are many ways - you can see my enthusiasm.
We wear many hats and when we make the decision where we are going to take on the file, we try to decide what’s in the best interest of the heirs. We also decide, if there is money to work with - that is very difficult for us. All the Public Trustees are largely the same; the only money we have to manage a client’s estate is the money of that client. Sometimes people will come to us and ask if the Public Trustee will take on this file and all there is is real property and there is not a penny to pay the probate taxes, or to pay the advertising, to pay the insurance, to pay anything, we wouldn’t have money to pay for it either and that is the regime across the country.
In those instances if someone else would say they want us to administer - sometimes the families say we don’t want to do it but we will put $1,000 or $2,000 forward to cover these ongoing expenses, sometimes we’ll take on those files but we always have to be careful that we are not taking on a file that will cause the province liability. If we consent to take on a file and we don’t put insurance on it, we don’t pay the property taxes and it’s lost to a tax sale, that can be a liability for us. I’m probably telling you more than you need.
MR. YOUNGER: That’s okay. I appreciate that, you’re right, your enthusiasm shows through and I think that’s not a bad thing. I want to focus in on a specific area. There is obviously a relationship between the Public Trustee, the Probate Courts, and the entire system. So, somebody dies who hasn’t been under the care of the Public Trustee, and there is an issue with the way that the will is being executed, maybe it’s with the executor, maybe the executor can’t be found, I mean there can be all sorts of things; what I’m trying to figure out is whether there is a gap in the legislation or whether you already have this authority to deal with cases where the terms of the Probate Act are not being met. Do you have the ability to go in, either on your own accord when you find out about something or at the request of a member of the public?
MS. ESTELLE THERIAULT: No, we don’t and I don’t think there is that in any jurisdiction. Anyone interested in an estate, someone has concern that administration is not proceeding properly or promptly, the interested parties, the ultimate beneficiaries, have the right to - there is a provision in the Probate Act that if an estate should close within 18 months of the grant - so the interested parties, the beneficiaries, the heirs-at-law, do have the right to go to the court to seek an order that the personal representative, and that’s what they call the executive administrator now, come to the court to show cause why the estate is not progressing.
MR. YOUNGER: But they would have to know that they are a beneficiary first, and that is the gap that I’m getting at.
MS. ESTELLE THERIAULT: The Public Trustee’s Office does not oversee the management of every private administration of probate in this province, and I know the other Public Trustees do not as well.
MR. YOUNGER: Okay. And so is it your sense that there’s a gap? If you speak to the Probate Court, they say the same thing, and they will say, well, it’s up to the heirs of an estate to come and tell us that it hasn’t been dealt within the 18-month period - and maybe it shouldn’t be under the Public Trustee, maybe there’s - but I still think there’s a gap there somewhere that - you have the Probate Court and the Public Trustee saying, well, if it’s not done in 18 months, then the heirs come, and that’s right. But the heirs have to know that they are heirs, in order to do that, and if the will isn’t being appropriately probated, then they may actually not know that and be able to come forward. I’m wondering whether there’s a mechanism, and maybe there’s a mechanism through the Public Trustee Act or through the Public Trustee - I know you can’t now - or whether there’s a mechanism in another way to address those issues?
MS. ESTELLE THERIAULT: There is a public notice of any estate being opened. An administrator or personal representative must advertise the estate for six months in The Royal Gazette. That is the standard that we have and have had forever. So there is public notice to individuals that someone has died, and I would think, if somebody dies and they are a brother or cousin and so forth, the alarm bells would normally go off and say, am I an heir? I think there is a positive responsibility upon potential heirs to come forward.
It is more difficult, I would think, that if it was a charity, such as the Heart and Stroke Foundation, and Mary decided to leave $1,000 to the charity, for them to know if the executor did not send them notice. But the Probate Act does - and I don’t control the Probate Act, nor do I oversee the Probate Court, because when I go to court on any application, whether I’m guardian, whether I’m trustee, whether I’m a personal representative - because I wear all of those hats - I am bound by the same laws and responsibilities as any other trustee. There’s no different standard for what we do when we undertake a file.
MR. YOUNGER: How is it - and I understand about The Royal Gazette - in all honesty, and maybe I’m the only person on this side that doesn’t know this, I actually, without going and Googling it, probably wouldn’t know exactly where to go look immediately for The Royal Gazette listings. I know they do the same thing federally for legislation - they publish it in The Royal Gazette - and unless you know what you’re looking for, you don’t know to go there.
I understand that there is that public notice. Do Public Trustees in any other province that you’re aware of deal with - and I recognize that it isn’t your job to directly oversee everybody; I mean, you’d need an army of people to oversee everyone - but do any Public Trustees elsewhere in the country have a mechanism where the public can come to the Public Trustee and say, there’s a problem with the probate of this particular will or this particular estate, and it’s one that we would like you to look into?
MS. ESTELLE THERIAULT: No. To my knowledge, no, that does not exist. But we do get phone calls like that on a routine basis, and that’s part of what we call our inquiry calls. We may have an individual who has questions about the administration of an estate, and we take our time, and we go through the Probate Act, and we reference the sections, and we - and so much with the new Probate Act is in the regulations. The government has seen fit to do a kit of how to probate files, and I routinely - a lot of people now like to circumnavigate the use of lawyers. I think lawyers are nice people, and I think we shouldn’t all be circumnavigated, but we are in an age where people do think they can undertake many of these tasks themselves. So part of my role, and that of all the lawyers who take the calls, is to direct the people to the kits and walk them through where to find them on-line - where the kit is, tell them where the Probate Court is, give them the phone number of the Probate Court. Sometimes when you do that you end up getting several other phone calls, and so forth. We have to be very careful, and I always say, I am not your lawyer, because we don’t want the liability of, well, the government told me to do this. But very carefully, we give them general information and advice to help them, to guide them, to help them along the way. I think that’s how we’re fulfilling our role in that regard.
MR. YOUNGER: That leads into one of the things that the Auditor General noted, and I’m just going through you - I assume it came from your office - gave us a current status update on some of the recommendations, which I appreciate. One of the issues that the Auditor General had raised, which I think is related to this and I think applies to some privately probated wills as well, is the accounting for what’s in the estate.
MS. ESTELLE THERIAULT: Yes.
MR. YOUNGER: The Auditor General had noted that there was the potential for issues in terms of adding up the entire estate - cataloguing everything that was in a property, determining the values and ensuring that those values are fair to the heirs, and also for the 5 per cent that the Public Trustee will get out of it. Can you tell me what has been done in that respect?
I know that the Auditor General made a number of recommendations, and to me that seemed to be one of the most important, at least in terms of the heirs and so forth. I think that problem applies to privately probated wills as well, so I’d be interested to know how you are addressing that.
MS. ESTELLE THERIAULT: One of the recommendations we had from the Auditor General was that we should do a risk assessment report. We did retain the Internal Audit Division of the Department of Finance to help us prepare an internal risk assessment report. That report, the final draft, was received by us in December - December 4th or something. We had to respond to their recommendations by the end of January 2013, which we’ve done.
They came forward with 11 recommendations, how they believed that we could strengthen how we are dealing with assets, and I’m pleased to inform you that all 11 of those recommendations have already been completed. At the same time, I commenced research with my counterparts across the country and obtained copies of all their procedures, how they are handling it.
I’ve also asked all my case managers to do an analysis of the cases they undertook in the past 12-month period, that they could analyze how many of the files they took on had houses and/or apartments, and how many of those properties, after we did our research - were there assets that we could sell and did we receive money from that? Basically, doing a cost analysis to determine a sampling of the files that we manage - how many have resources themselves to pay for the cost of the securing and protecting of those assets? That report is supposed to be in my hands - three-quarters of the analysis is done, and I’ve given them a deadline of the end of April.
I’m trying to develop a business case to see how many files can self-support this, how many files cannot pay. Then I must achieve a solution - how do I address this recommendation, would it be less expensive for government - and always bearing that in mind, how to work within our resources, how to best achieve our goals within the resources that our province has. I’m trying to determine the best case, should it be - one province, I’ve discovered, actually has a private contract with the Commissionaires. They would be around the province because we have clients everywhere in the province - Ecum Secum to Neils Harbour to Shelburne - at any one time to have someone who would be quickly responsive so they could be in a location. Some jurisdictions have them full-time on staff.
I’m gathering the information, trying to get a sampling of what we have, the costing, the best business case to go forward, and I will be presenting that to government. I’m looking at all options and trying to do it in a studied fashion, to find a good solution and a good Nova Scotia solution.
MR. YOUNGER: I know I only have about 60 seconds left so maybe what I’ll do is . . .
MS. ESTELLE THERIAULT: Sorry.
MR. YOUNGER: No, that’s okay. I’m never going to criticize someone for being enthusiastic about their job, that’s very good.
I will ask a question. You’re not going to be able to answer it because the chairman is going to cut you off, but it will give you time to think about it before I come around to the next round. I’m interested in whether you have found any limitations in - you note there are 14 pieces of legislation that govern your office - whether there are limitations within that legislation that prevent you from being able to do some of the things that you would like to do or to even address some of the recommendations in the Auditor General’s Report, whether there are limitations in any of those Acts or changes that you would like to see made to the legislation, which would allow you to better respond to the calls you’re receiving at your office and the cases that you’re dealing with. You won’t be able to respond now but you can think about that
MR. CHAIRMAN: Order, please. Unfortunately your time has expired. Mr. Porter.
MR. CHUCK PORTER: Welcome to all three of you this morning, good to have you with us. The question that Andrew just put, I’ll give you the time to answer if you like because I was going to ask the same thing, if there were some limitations that were binding you. It wasn’t one of my first questions but let’s go there anyway and take a couple of minutes if you’d like to talk about it.
MS. ESTELLE THERIAULT: The legislation, we have a fair amount of power already. No, I am quite content with the authorities that we have. Our legislation allows us to be trustee guardian. One thing stemming from the probate question, if I may, we have utilized a new power that was just given to us, and I think it’s a great power and it’s one I suggested to be put in the Probate Act when I was part of the study and implementation of the Probate Act, is that the Public Trustee actually now has the power to step in and take control of assets of a deceased’s estate if we believe the estate is in jeopardy and that’s Section 18 of the Probate Act.
We have exercised it only a few times but if we see there is great delay and we believe there are assets that could depreciate and we know there are funds to pay for the protection, we learn that there are monies in the bank to pay the power bill, to pay the fuel bill, et cetera, to protect that asset, we can exercise Section 18. I write a letter, sign and seal with my corporate seal, and I can extract money from the bank and pay that fuel bill. I have all powers of a personal representative.
That is great and we are entitled to charge for our services because I’m always cognizant of the fact that our program, like so many other programs in the province, we try to cover our costs as much as possible, as good stewards, and if we do step in when the executor, the personal representative takes over, let’s say they finally get their grant, they are back from Australia or wherever they are, we can account for what we have done. We always account and we are entitled to a fee for acting as that interim administrator so we can help protect assets and we can, at the same time, ensure that our services are compensated for that purpose.
MR. PORTER: Thank you, that was part of the question as well that I was looking at. Is there a flat fee in these services that you’re charging - how does that work?
MS. ESTELLE THERIAULT: Every guardian and Public Trustee of Canada, when acting as a trustee or personal representative, does charge a fee. We are entitled to charge the same fee as if we were acting as executor administrator as a private client would, if you were named executor of your mother’s estate, and it is up to 5 per cent of the assets that we deal with.
We present our accounts when administering an estate and the court determines - we can’t just say we’re taking 5 per cent because we think we did a really good job. We present our accounts, we’re always accounting to the courts for all the services that we do - to the heirs, to the courts on probate, to an executor after our living client has died, or to the child when they’re 19. So we charge up to 5 per cent; that’s determined by the court.
When we act as trustee or guardian of a living file or a child’s file, the Civil Procedure Rules have determined a trustee is entitled on a Trustee Act to fair and reasonable remuneration. The courts have suggested that a proper scale is two-fifths of one per cent of capital - .004 per cent. I usually work with a calculator when I tell families what that is. So if you had $100,000, I’m sure Mr. Lapointe could tell us (Interruption) What is it?
MR. ALLAN MACMASTER: It’s $400.
MS. ESTELLE THERIAULT: Thank you, we have mathematicians. So .004 per cent of the capital and 5 per cent of the income. So many, many of our clients, particularly our living files, they have limited income. We may have a senior citizen making $12,000 or $14,000 a year, we’re entitled to 5 per cent of their pension income for our services. It doesn’t cover what we are doing for those people, but we do receive that and actually the Department of Health and Wellness recognizes that we’re entitled to this trustee fee. So that is what we do charge.
In a probate file, if the file is $100,000 or $200,000, largely we will get the 5 per cent commission, but on occasion, when we have a very large file - $1 million, $2 million, $3 million - the Probate Court reviews the complexity of the work that has been undertaken, how difficult, and the court may award a commission of maybe 3.5 per cent, 4 per cent.
I’ll also let you know about our accounting. When we go to the Probate Court there are set procedures how you must account to the heirs. You must send your accounts to the courts 45 days before, and to all the heirs and beneficiaries within 30 days. So with those accounts there’s also a form that they say, I object to the account, I object to the commission sought, all those things, so the heirs have full opportunity to speak if they believe the commission is appropriate or not. That is how we collect our fees.
MR. PORTER: Thank you. I want to back up a bit to where I intended to start - I think to some people it is a bit confusing so can you explain to me from a physical aspect, what does this look like? You know, have you got a filing cabinet with several names in it that equate to the $43 million that you spoke of or whatever the total was - how is this actually managed, like the physical side of this thing? I’m a little bit curious about that.
MS. ESTELLE THERIAULT: I hope I understand your question, and if I go off on the wrong tangent, please stop me. I’m a lawyer. To be a Public Trustee you have to be 10 years a lawyer; I have 38 years and counting, and I have three other lawyers, and I have five trust officers. When a file comes in, depending on what type of file it is, the living files, management of a living file, usually incompetent people, they are assigned to trust officers.
We have set protocols and procedures. What we immediately do when we have a file, we have performance standards now established. Normally within 24 hours of our getting a file, we are sending letters to every pension authority, redirection of mail, freezing bank accounts, writing CRA to get copies of past tax returns and try to ascertain their last year’s income. We have a questionnaire we send out to people and we ask them to fill out as much as possible about the assets they know that party has because it’s very difficult for us, as we don’t know these people.
You may have a client now in a hospital, they are hoping to place them in a nursing home, and the social worker will say she has no attorney on her joint power of attorney. She has no guardian. She has always been secretive with her money. The children have always said, mum has told us nothing. So we try to get as much information as quickly as possible because we try to - I often call it cast our net and see what fish we bring in. We immediately do all of these things. If we know there’s a bank, we have protocol set up with the financial institutions and with CRA that we even fax the letters to them and then hardcopy the letter, to try to immediately source where the income is so we can protect that income. When that file has been assigned to the trust officer, they basically step into the shoes of that party. As far as placing insurance, we’ll place our emergency insurance immediately on assets.
MR. PORTER: Can I stop you there?
MS. ESTELLE THERIAULT: Certainly.
MR. PORTER: I want to just back up a couple of seconds. You mentioned the example of the lady who kept everything from her children. Are you saying in this case that the children are still available but have nothing to do with the file and if that’s the case how do you get it?
MS. ESTELLE THERIAULT: There may be children, there may not be, that doesn’t . . .
MR. PORTER: Okay I can understand the “not” piece and there is no one left, there is nobody there, that’s why I just wanted to make sure I was clear on something there.
MS. ESTELLE THERIAULT: I can understand that. I know this so well that it’s difficult. If there are children there but the senior, or the individual, has not taken the advance planning tool steps of having a joint power of attorney, or the family have not made an application to the Supreme Court to be appointed guardian of the finances of their mother, though the children may be very well meaning and they say that they would like to help our mother, they have no legal authority to go to the bank to say tell me what my mother has, put it in my name.
There are three pieces of legislation that empower the Public Trustee’s Office to become the immediate trustee of the financial affairs of an incompetent person: one is the Hospitals Act, the other is the Adult Protection Act, and now consequential amendments that came out of the Personal Directives Act, which changed provisions and added provisions in the Public Trustee Act. We have, through legislation, the power to become immediate statutory trustee or guardian of those individuals.
MR. PORTER: As long as someone - sorry, I don’t mean to interrupt you but just for clarity - as long as another family member hasn’t done that through the enduring power of attorney.
MS. ESTELLE THERIAULT: Correct.
MR. PORTER: I just wanted to be clear on that, the simplicity of it. When you were talking about it I was thinking well what if someone else - but you answered that. Thank you I don’t want to cut you off, time flies by so quickly when we’re back and forth.
MS. ESTELLE THERIAULT: Oh, sorry.
MR. PORTER: Don’t apologize; I also appreciate your passion on it. The physical piece I was talking about, if we can just move to that a little bit more, I understand the outlay of your office now, what is assigned, do the files come in appropriately, and so on. I was thinking about the files and the accounting and when the Auditor General did his report there seemed to be - if I understood it correctly and maybe I was wrong - but there seemed to be some issue with how that was being done and tracked and accounted for. I’m just curious; maybe we can talk about the recommendations, briefly. You said you have 81 per cent completed.
MS. ESTELLE THERIAULT: Yes sir.
MR. PORTER: And of that 16 there are three left then, roughly, Can you speak to the three that aren’t done and maybe why. If you buzzed through so many of them, you’ve done 13 of 16, which seems to be relatively quickly, if you will, what’s the holdup on the other three, if it went that well, and what are those three?
MS. ESTELLE THERIAULT: One of them we’ve already talked about entering the properties, and so forth, that sheer element. We are now working on trying to find the best business plan, cost solution, number one. But even in number one, we have achieved and strengthened some of our policies already. I’m saying it’s not done because the final solution is not there yet. Some of the things to even strengthen what we’re doing now: we have changed our caretaker agreements. We have the caretaker agreements being acknowledged upon the terms that they’re being hired. We have changed our inspector agreements and we have a detailed listing of obligations, duties and functions that we want them - and we’re having them signed - that they’re accepting these obligations.
We have put in a new procedure. There are occasions where the client is no longer returning home; there is an asset, let’s say, a baby grand piano or a cuckoo clock that is left, in the will of this individual, to a daughter. The lady will never need the clock again. The beneficiary named in the will wishes to receive the clock when her mother dies. At the current time, the estate doesn’t need the value of the cuckoo clock to help pay for her ongoing needs. So we will enter into a trust agreement with the beneficiary. She will say I really want that. We enter into a trust agreement so we’ve strengthened the trust agreements. Now they acknowledge they are holding it for the estate and they’re maintaining insurance. We have that all in protocol. In fact, though we haven’t completely achieved completely number one - that was 6.1 - we have done a lot of the framework behind it to strengthen it, based on many of the suggestions that we received from the Auditor General, which we appreciated.
MR. PORTER: Wouldn’t it be easier - and I’m not a lawyer and I know you’ve been at this a long time and the department has been there since, what - the 1950s?
MS. ESTELLE THERIAULT: 1973.
MR. PORTER: So it has been there a long time.
MS. ESTELLE THERIAULT: Forty years this year.
MR. PORTER: Forty years and you’ve been there, by the sound of it, maybe quite a while.
MS. ESTELLE THERIAULT: I look that old too.
MR. PORTER: No, not at all. That’s not what I was suggesting at all, dear. I will use the cuckoo clock or the piano as two very good examples. They are a beneficiary and I guess that does mean at death. That’s creating a bit of a problem though, isn’t it, for the Public Trustee to some degree? If the person is no longer using that - and I’ll just say if it were for me and I was leaving that item to my family member - is there no way to make that go to the family member sooner? Or is that not a recommended change?
MS. ESTELLE THERIAULT: Oh no.
MR. PORTER: I only say that because it is costing you money, time and effort and so on, plus you have all the accounting procedures that go along with that. I’m just curious if that is something that has ever been tackled by way of - we were talking about changes or strengthening things and I’m wondering about that.
MS. ESTELLE THERIAULT: We’re going back into historic equity and trust law.
MR. PORTER: Things I know nothing about - that’s why I’m asking you. I apologize.
MS. ESTELLE THERIAULT: Not at all. It’s a question that is often asked. A guardian or a trustee - we are not authorized to give away the assets of an incompetent person. Now if someone had done an enduring power of attorney document and they specifically addressed that issue and authorized the attorney to give away assets, they could. That’s not just the Public Trustee - we’re talking about any trustee, any attorney, any guardian even appointed under the Incompetent Persons Act - you have no right to give away the assets of that incompetent person.
MR. PORTER: Until they’re deceased.
MS. ESTELLE THERIAULT: Until they’re deceased. A will speaks from death. What it also does is if there was a change in circumstances that that client, that person - you have to manage the estate for the benefit of that person - so at some point in time, if I needed the proceeds from the sale of that clock to benefit that incompetent person, it is there. We try to render respect, always, to the wishes of our clients, having been expressed in their will. What we also do - because it could be an asset that was of great emotional value to that family member - if our client needed the money from the cuckoo clock, we would get it appraised and make the first offer to the person named in the will saying, your mum wanted you to have this; we need the money to maintain your mother or to pay her accumulated debts because, of course, they don’t go away. Of course appraised value is auction value, which is not the cost of the cuckoo clock at the local furniture store, it’s always one-quarter to one-third of the value. That’s the way we try to honour that bequest.
MR. PORTER: I’ve got only a couple of minutes left, that’s fine. It’s not as simple as money in and money out, and when you think about something like that - having been there and having been the power of attorney for my mother and looked after a similar - she didn’t have a whole lot, not to the detail that some would have, so maybe she would be an average one. I don’t know. I’m just thinking back to how complicated that was.
I think it’s probably fair to say it’s confusing for people. They don’t know that’s there, and sometimes maybe they don’t know where to go, and I don’t know if they know what the opportunities are to - I don’t want to say pass it over to the Public Trustee, but to maybe contact the Public Trustee to see if that’s the right place to go or not, and maybe in some cases it is.
I want to - again, with just a minute left, I’ll ask this question to finish it off. When you compare what we do in Nova Scotia to other jurisdictions in the country, where are we by way of - and I’ll speak with regard to the Auditor General’s Report. It was about the accounting procedures and the risk assessments and so on. If you can, where do we fit prior to and now? You may not have enough time to answer all that.
MS. ESTELLE THERIAULT: I think we are doing a very good job. In all the years I have been at the Public Trustee’s Office, how we have managed our files - we have never been sued, and there’s no judgment ever filed against the Office of the Public Trustee for mismanagement. I would think that if we were doing a poor job and not tracking and not accounting, that surely, in our litigious society, we would have been sued by now.
MR. CHAIRMAN: Order, please. Unfortunately, Mr. Porter’s time has expired. Mr. Epstein.
MR. HOWARD EPSTEIN: Mr. Chairman, thank you, and Ms. Theriault, welcome and thank you for the presentation. This has been very interesting.
As you know, I’m also a lawyer, and in the past, though it has been a long time, I was in general practice and did have occasion from time to time to have contact with the Public Trustee’s Office. I think what you just observed a moment ago was a very telling point - that is, the fact that the office has never been sued.
I think I recall - was Martin Bushell your predecessor?
MS. ESTELLE THERIAULT: Yes.
MR. EPSTEIN: Am I right in thinking that there have just been the two Public Trustees?
MS. ESTELLE THERIAULT: There were three, Mr. Epstein. Oh, I’m having a brain freeze - Clint Havey. Mr. Havey was the first Public Trustee. He started off the ground, and then Mr. Bushell was appointed in 1979 and he retired in June 1991. I had been Acting Public Trustee at that point for probably about seven or eight years, and any time in Mr. Bushell’s absence.
We started with seven staff. Then I was appointed in January 1992 to be permanent Public Trustee, and I’m actually the longest-serving Public Trustee in Canada.
MR. EPSTEIN: I had forgotten Mr. Havey, and I apologize for that. The record is a distinguished one, and you are right to point to it. I have to say that I’m not aware of any complaints out there amongst the practicing bar about the Public Trustee. As you pointed out in your notes, the audit here was a performance audit, not the annual financial audit that takes place in any event. The special look this time by the Auditor General had to do with systems as much as anything else. In terms of the money accounting, am I correct that this has always been passed by the Auditor General every year?
MS. ESTELLE THERIAULT: Yes, we have been audited every year by the Auditor General. We have found their input over the many years to be of great help to us. They’ve always helped identify areas which could be stronger. Before the change of approach with the Auditor General - and all auditors across the country after Enron - it was our practice before we did any moves, especially when computerization came in in 1994 for us, every step that we took I would always say to the accountants, please pass it by the auditors. I want them to be comfortable saying, yes you’re going to have protections.
Now, they’re no longer authorized to help us in that way, but we’ve always used the Auditor General in the past and our accounts, our numbers are always there. There has never been a finding that the numbers we’re managing for our clients have not been there, there have been no defalcations and at no time - and I still manage a part caseload in trying to cut back as the work - but I’ve always had my hand on file management. At no time in any of the thousands of files that we’ve presented to Probate Court, to children when they’re 19, or to executors when our living clients die, there has never been anything wrong with our accounting.
We have a system that balances well, that we present account statements that are adequate, that show every cent coming in and every cent being spent on behalf of our clients. It’s all there.
MR. EPSTEIN: Just as a precautionary matter, should it ever come to a lawsuit at some point - one hopes not - does the Public Trustee maintain insurance or are you self-insured?
MS. ESTELLE THERIAULT: The Province of Nova Scotia is my insurance. It’s in the legislation that if there’s a judgment against the Public Trustee, it is a judgment against Her Majesty.
MR. EPSTEIN: So when you described the office originally as independent of government, I think that would have to be modified in some ways, because as I understand it . . .
MS. ESTELLE THERIAULT: I’ve never thought of that.
MR. EPSTEIN: . . . the Department of Justice actually is the source of funding for the office in terms of your office space, and so on, if that’s not adequately generated by your own fees. Is that right?
MS. ESTELLE THERIAULT: Yes, it is. The legislation states that I report to the Attorney General, the Minister of Justice I guess, for administrative purposes. I can and I have taken positions against government.
MR. EPSTEIN: I think we understood the independence in a different way. There are two aspects to it: one would be the financial interaction which is there, and the other being the fact that it’s an arm’s-length entity that has its own mandate by Statute.
MS. ESTELLE THERIAULT: Exactly.
MR. EPSTEIN: Fine. Could I ask about the Auditor General’s recommendations? I think my colleague, Mr. Porter, was asking about these as well. By my count, actually, I think there might actually be four that are still outstanding. I have Recommendations 6.2, 6.3, 6.7 and 6.16, so maybe we can go through them.
In the document you seem to have given us about the current status of the different items, the four - well, first let me say that as I read your comments, you accept every one of the Auditor General’s recommendations so all we’re looking at is really the extent to which they’ve been implemented. Is that right?
MS. ESTELLE THERIAULT: Yes, do you have a report dated April 16th?
MR. EPSTEIN: I do, yes.
MS. ESTELLE THERIAULT: What was the number again, please?
MR. EPSTEIN: Recommendations 6.1, 6.3 . . .
MS. ESTELLE THERIAULT: Recommendations 6.1, 6.3 and 6.16, in my mind.
MR. EPSTEIN: And Recommendation 6.7.
MS. ESTELLE THERIAULT: Oh, that’s performance standards?
MR. EPSTEIN: Yes, it is.
MS. ESTELLE THERIAULT: That has been completed.
MR. EPSTEIN: That’s now completed?
MS. ESTELLE THERIAULT: I’m sorry, that was missed; that is completed. That has to be changed.
MR. EPSTEIN: So this document has to be updated slightly - Recommendation 6.7 is now completed. Is that right?
MS. ESTELLE THERIAULT: Yes. I’m sorry, we had put that in - we put the document in and I missed when we were going to that point to say the word “completed” should have been there. I thank you for raising that.
MR. EPSTEIN: Thank you, because this seems to be an important one, which is that the office “. . . should establish and monitor performance standards to ensure staff are meeting performance expectations.” You’re telling us this is now done.
MS. ESTELLE THERIAULT: Yes. Re the actions taken, it did say it was adopted and came into force on December 11th. It was just my error in not putting in the word “completed.”
MR. EPSTEIN: That’s okay. Let’s go back and look at the three you originally told us still needed a little bit of work. The first one, Recommendation 6.1 is the one that has to do with the process of moving, I think, with some speed to make sure that the “. . . assets are properly accounted for and collected.” and that there shouldn’t be any unsupervised persons having access to the personal property of any client of the Public Trustee. Was this where you were talking about the possibility of enlisting the commissionaires?
MS. ESTELLE THERIAULT: That is the issue I was discussing.
MR. EPSTEIN: Can you just tell me how exactly an altered system might work here?
MS. ESTELLE THERIAULT: The only province I found this in was in New Brunswick and they have money in their budget to cover the cost of hiring this independent party to go to investigate with another party in attendance, usually an auctioneer. So there would be two of them.
MR. EPSTEIN: So the idea about the commissionaires, if one assumes that maybe at some point . . .
MS. ESTELLE THERIAULT: If it goes that way.
MR. EPSTEIN: If you did that - they would be the agents of the Public Trustee who would be there to accompany the auctioneer, for example, who goes in to assess the value.
MS. ESTELLE THERIAULT: Yes, and they’d be together at all times and enter the property together. But that is just one way of trying to achieve the solution; I have not found the exact solution yet. I’m still studying the numbers trying to cost it out to make my business case to present to government to ensure that I get the right solution for number one.
MR. EPSTEIN: Maybe I’m just going to jump ahead here because one of the reasons that I was asking about this is it made me wonder about the extent to which there are national standards for Offices of a Public Trustee. I was struck by your comment earlier when you said that when you were grappling with this Recommendation 6.1, you sent out messages to your colleagues across the country asking them to let you know what they do and putting this whole issue in front of them. Are there national meetings of Public Trustees - do you get together on a regular basis?
MS. ESTELLE THERIAULT: We do.
MR. EPSTEIN: How often, what happens, can you tell me?
MS. ESTELLE THERIAULT: Once a year we exchange information about computers, about - just so many topics. Right now we have a national committee on banks and the difficulties we’ve all experienced about the promptness in response to get back to us. We were lobbying with the Canadian Bankers Association. We exchange information about investments - not investments by Bank of Nova Scotia, but just about investment protocols. We exchange information about when we were instituting the new health division. So we use it as an exchange of information, trends, we’ll even talk about if other provinces are having performance audits, what are they finding in their performance.
MR. EPSTEIN: Yes, I actually wondered about that. Have you shared the Auditor General’s Report on your office with your colleagues?
MS. ESTELLE THERIAULT: Oh we certainly have; it’s a public document, of course as you’d know. We work on seeing what they are finding. It’s always an exchange of wealth of experience and as we often say it’s not so much what is at the table. We used to meet every two years and now we meet - we used to meet 18 months, now were down to, as of two years ago, we meet every year and each province takes a chance hosting it. But it’s the little things exchanged over coffee - I have a problem in this, have you had a certain - it’s that type we’re exchanging our experiences of trying to find solutions.
MR. EPSTEIN: A very valuable thing, I agree. Can I just ask, do you happen to know if any of the public trustees have been audited by their Auditors General in their provinces? I mean a performance audit.
MS. ESTELLE THERIAULT: Alberta just went through one; I think Saskatchewan has gone through one. I can’t tell you, Mr. Epstein, I’m sorry.
MR. EPSTEIN: So at least two other provinces have had a performance audit . . .
MS. ESTELLE THERIAULT: I’m sure others, unfortunately I . . .
MR. EPSTEIN: It’s okay. Do they also share these or has your attention perhaps has been drawn to the existence of these other audits?
MS. ESTELLE THERIAULT: When you’ve had experiences before, as you can see in our performance audit there are some quick fixes and of course as much as I get done as quickly as I could, I did. The report came out in May and here we are in 11 months we already have 81 per cent of them done and working on the other three, showing the significance we put on this. It’s the big issues and so if somebody says something about, our auditor says this, I’ll come back to my office and say, look, how are we doing this? Can we strengthen this? So we draw upon the experiences in the other provinces.
MR. EPSTEIN: In your annual meetings with the other Public Trustees, has there been a time or will there be a time to formally consider, as an agenda item, the performance audit reports that came in from Auditors General?
MS. ESTELLE THERIAULT: We have never put that on the agenda as such, but whoever has had it - last year, after the report, I went to the meeting in June and I stressed or highlighted some of the recommendations. I shared it with them, told them some of the areas where I would really be drawing upon their help to help me find solutions, this general experience, shared the experience of how you got ready or prepared for a performance audit, the experience of how you prepare and get ready to give your responses.
We try to use these meetings as an opportunity to learn because we do unique work, and so the other jurisdictions, the other provinces and territories, that are doing the same type of function or trying to - all of our duties may vary. Our core duties are largely the same, so we use these meetings as an opportunity to train. Our association also has working committees throughout the year to study different subjects, to bring back reports, to help us do our job better.
MR. EPSTEIN: It’s unique and also valuable work. One of the reasons that I asked about the annual meetings was I wondered if there were either national or international standards for Public Trustees. For example, I think about a profession like accountants. There are national and international accounting standards that prevail within the profession and often books that embody procedures and so on. Does such a thing happen to exist for Public Trustees or not?
MS. ESTELLE THERIAULT: No, I have never seen them in all my years of experience, but the books that are in existence and that we do draw upon regularly, are legal texts, court decisions, because as you make decisions about the management of a client’s account - how you deal with their joint bank accounts if there is a husband and wife, we’re guided and we’ve developed policies in relation - and we have a draft policy right now on joint bank accounts. It’s not signed off yet, but we’re working and have been working almost a year on this policy. We’re taking experience and knowledge from court decisions and how the courts are guiding, so that when we deal with these assets that we’re doing so according to law. I have often called my office, basically, a trust company in the government sector. We have the same responsibilities, legal responsibilities, trust responsibilities, accounting responsibilities, as any guardian, any trustee, any trust company, so although there may not be text books about how you run a Public Trustee Office, there are dozens of text books on trusts, equity and all of that.
MR. EPSTEIN: I agree completely and the parallel is a very good parallel. Could we continue through the outstanding recommendations, the other two from the Auditor General’s Report? We had looked at 6.1. What about 6.3? This is the one where the office, according to the Auditor General, should review its policies on real and personal property to include a general direction to staff to consider and address risks to all property. I’m not sure I understood exactly what that meant. Could you explain that and tell us what’s going on with that?
MS. ESTELLE THERIAULT: We have started work in that regard. I have developed a tool that is to be put in every client’s file. As we select a caretaker, let’s say, the elements we have to decide what kind of risk - is there a conflict of interest? How can we alleviate that conflict of interest?
We were doing so many of these things already in our work, and when we were going through the performance audit we explained to the auditors who met with all the staff and myself, this is what we’re doing. But they’re saying, but you don’t have a paper trail. So now I’ve developed policies, so the trust officer, the case manager, when they’re selecting a caretaker to be installed, the things they should consider, the factors they should consider and direct their mind specifically - it’s there in writing, so that party can look and say, okay, this is an issue, or how do I deal with that? Every client’s file is now going to have that. We have commenced identifying potential risks, and how do we ameliorate that risk or eliminate that risk?
We have changed our letter with the auctioneering services. We are now seeking confirmation that they have sufficient liability insurance to cover the value of the assets under their care. I believe 6.3 is - we’ll be fully completed when we have 6.1 completed, because when we finally find our answer to how we address 6.1 . . .
MR. CHAIRMAN: Order, please. Unfortunately, Mr. Epstein’s time has expired.
Mr. Younger, you have 16 minutes.
MR. ANDREW YOUNGER: Thank you very much, Mr. Chairman. I wanted to first follow up on something we were discussing before. I’ll try to leave enough time to answer the question about the missing point in the legislation, so you have lots of time to think about that.
We were talking about the potential of a gap. I’ll table this in a second, but Section 18(1) of the Public Trustee Act says - and you probably know this far better than I do - but where it is brought to the attention of the Public Trustee that a person has died and the person’s personal representative or persons entitled to share in the distribution of the estate have not taken possession of the property of the deceased person, the Public Trustee may take possession of the property for the purpose of protecting and preserving it, and pending a grant the Public Trustee has all the powers of a personal representative with respect to the property.
I can table that if the chairman wants, but that’s basically the Act. When I first read that before, of course, being a layperson I didn’t read that “personal representative” as “executor,” so based on your first discussion, I think we now all understand that that’s the executor.
Getting back to that issue of if there is an estate where the executor is not doing their job, my read of that is that your office can then take control and become the - I’ll use the word “executor,” because I think that’s the word that most people . . .
MS. ESTELLE THERIAULT: I like it better.
MR YOUNGER: There you go.
MS. ESTELLE THERIAULT: Actually, I raised that as an example, that we have exercised that. That’s before the grant, though.
MR. YOUNGER: Okay, so that would be if the executor hadn’t even - so once the executor is approved by the court, that section does not apply?
MS. ESTELLE THERIAULT: Yes, that does not apply, and then we are legally obligated - and are pleased to do so, of course - we account to the executor after they have their grant. We’ve only used that section a few times. Actually, I’ve used that section a few times to help families in very desperate need.
We are contacted often by a family or friends - use the example of friends - who know an individual has a bank account. The party has died, and they’re trying to find money to bury the person. They don’t know if the person has enough money to even bury the individual, or should they be contacting Community Services? So we are sometimes contacted by families, they say, we know he has the bank account, I’ve gone down to the bank, and they won’t tell me what is there. So I said, I’ll use my powers, and I’ve actually written to the financial institution. It’s sometimes difficult, because you don’t have the funeral director’s statement of death yet, because they haven’t signed the funeral contract yet, but we say, he is dead and we’re exercising his power to take control. I have all powers, as long as the letter is signed and sealed by me, and I get them to tell me, is there enough money to pay the funeral bill? Because the last thing you want is a good, willing neighbour, friend, or even a son who doesn’t have the money to pay for this father’s funeral himself getting stuck with the bill. Because I tell them, don’t sign the bill. If you can’t afford the bill, don’t sign it. That’s the type of advice we give them. So I’ve utilized that power to find out if there’s money, and if there’s not, I advise them to contact Community Services, or I’ll say, there is $3,200, he worked full time, he’s going to get $2,500 CPP death benefit, and I’ve used my powers to pull in that bank account for them.
We know the funeral is one of the first charges against any estate - actually, the Canada Revenue Agency is, but due to public policy, the body must be buried with dignity and all of that; they don’t kill you if you don’t pay an outstanding income tax bill, even though they have priority. I’ve gotten money out of the banks and paid it right to the funeral company, because I know we can get a lawful receipt and protect my office, protect the government. So I’ve used it for that, and I’ve used it for circumstances in which there might be difficulty obtaining - getting the executor in province to swear their documents. There are things that have to be decided very quickly and acted on very quickly. We’re approached, and I’ve used that power for that. I use it in a limited fashion, because it would be a huge draw on resources if we used it all the time.
MR. YOUNGER: Well, I agree. I think, though, that is probably somewhere where there is a - and whether it should be by your office is another debate, I guess, but there is a limitation there. Obviously once the executor is appointed in a particular estate, if they then don’t do anything, if that section doesn’t apply, there’s this sort of black hole of, well, there’s an - and I’m not suggesting that’s your fault, because obviously the legislation doesn’t provide for that. But I appreciate the clarity on that section. I think that that points to a gap at least, maybe not in your office, but in the probate system overall.
MS. ESTELLE THERIAULT: I don’t believe that that is something that any Public Trustee is doing in any province.
MR. YOUNGER: And that might very well be the case, but I think that, whether it’s the Public Trustee or maybe it’s an additional authority on the Probate Court, it’s a gap. Even if that gap exists in other provinces, it’s probably a gap that should be solved. There probably aren’t that many cases in the run of a year, so I’m not suggesting it’s a rampant problem - I really have no idea - but for the few cases that there are, I think that’s important.
I wanted to also ask about - one of the things that was talked about in the Auditor General’s Report is the securing of assets. Now, I want to understand. If somebody dies, and it is a case that you’re going to take over as the Public Trustee, there is a gap between you being assigned or taking over the case and things beginning in terms of whether there’s an auction or an evaluation or somebody going in. I suppose there’d be - I mean, it could be a gap of a few hours, or it could be a gap of a few days or a few weeks before somebody could - and it probably also depends on where the person’s estate is in the province. In your responses to the Auditor General, you noted that it’s sometimes more difficult if they’re further away. As soon as you become in control of the estate, how do you go about securing the property?
MS. ESTELLE THERIAULT: After we are in control . . .
MR. YOUNGER: Because I understand you can’t secure it before you’re in control.
MS. ESTELLE THERIAULT: We are sometimes contacted about files, because a family has been fighting for a year and a half and a property has been vacant for a year and a half, because no one in the family can decide who wants to take on the file. So there is a huge period of time that we would have no control over, that people are coming and going inside those properties. But after we take over a file, we immediately try to secure keys, try to determine who has keys. If we have the idea that there could be many keys, we will change locks. We immediately check into if there is insurance on the property, and if we cannot obtain the answer pretty darn quickly, we immediately put it on the Public Trustee’s master policy. That’s one of the benefits we have gotten through our association with volume buying: we can get vacancy insurance while many people can’t get insurance - let alone the high cost of the premium - because they won’t even insure it. So we will insure it, and if we find out later there is a policy, we can cancel, but we will insure immediately.
We try to determine who has been caretaking the property, if anyone. We query the background of that party - is it someone who the deceased trusted? We speak to the family members - are they comfortable with having this person continue to act as caretaker? We make a decision on whether we’ll allow that person to continue to act as our caretaker.
There are instances that there are no family members, there are none living nearby or willing and able to do it, at which time - we have sourced individuals who can act as caretakers, through checking references and so forth. We have an established policy, which is even tighter than is required by our insurance, requiring people to enter the properties on a regular basis, to keep a record of when they’re entering the properties and the condition of the properties, and report back to us.
We pay a very nominal fee for the caretaking services. The estate pays, of course. All the activities that we do for any of our clients, it’s the client’s assets that are paying for the services, it’s not the government. We do get those kinds of questions - people ask. They just assume that if we take it over we’re going to foot the whole bill.
MR. YOUNGER: That would be the same with a private executor as well.
MS. ESTELLE THERIAULT: Exactly. We’re acting as a private executor would.
MR. YOUNGER: On average, how long does it usually take to secure a property between the time - I do understand there can be a long time before you get it, so you can’t realistically . . .
MS. ESTELLE THERIAULT: I’d say a couple of weeks, at the max. We try to as soon as we can, but initially, we have to ascertain how to get into the property. After that, we very quickly try to get someone in there.
MR. YOUNGER: Have you looked at whether there are opportunities to - whether there’s a lag in the process that could be addressed in some way?
MS. ESTELLE THERIAULT: I’ve obtained standards from the other Public Trustee Offices, and I’m finding some of them even have much longer periods of time.
MR. YOUNGER: I ran out of time last round, and I now have a few minutes, so I can go back and ask the question. In light of reviewing the Auditor General’s recommendations - I respect the fact that most, if not all, are either underway or completed, and I think that’s very good - are there areas in the legislation that govern your office or that you use that could use clarification or changes or strengthening that would assist you in better serving the purpose of being the Public Trustee?
MS. ESTELLE THERIAULT: Not really. We have strength in our legislation. If I sign and seal a letter and tell someone to do something, the legislation says that as long as the letter is signed and sealed, and I quote a certain section of the Act, I have the authority to do it.
I think the legislation that we have is quite strong. I was really impressed with the new Personal Directives Act, which was passed in 2008, I believe. It gave even more powers and protection to people and gave the Public Trustee more authority.
I was always concerned about health care. My office was being asked to give health care consent for surgeries, largely, because a person is incompetent. Now the government is taking the very big, positive step that the Public Trustee is the substitute decision-maker of last resort for every mentally-incapable person, so I am now empowered. That was a big step. I am now empowered that our unit, and Ms. Erly, who’s with me, can speak and review requests for health care and placement decisions for people who are mentally incapable.
It also protected the family members who are making that decision, but didn’t really have the legal authority. That legislation also gave us the authority to step in and become the financial trustee of individuals, largely, who are being placed - whether with our consent or with the consent of the decision-maker - and then they needed a guardian or a trustee to manage money. It has given us even more power to step in and take over the finances of that person, secure their money, secure their assets. That has been a great benefit, because in many instances we’re helping the backlog at hospitals when nursing homes didn’t want to accept someone unless there was a guardian appointed, because they wanted to make sure the income was secure to pay toward their cost of care.
There’s a lot of good legislation that we’re working with, and very positive steps have been taken. The biggest recent one was the Personal Directives Act. Often I would say to a hospital when they were seeking health care consent for a surgery, how long has the client been with you? I’m sure you’ve not given them an aspirin in the last six months that they’re waiting to be stabilized. There would be a dead silence.
Now, through this legislation, through the financing of that division in my office, we are reaching out to group homes and hospitals and nursing homes - we’re making informed decisions for and protecting the clients who have no one.
MR. YOUNGER: Mr. Chairman, I have four seconds, so I will turn it over to my colleague.
MR. CHAIRMAN: Thank you, Mr. Younger. Mr. Porter.
MR. CHUCK PORTER: Thank you, Mr. Chairman. I guess I want to get back to a bit of the accounting side. You spoke about all the years that this has been in operation, never being sued, and that’s all a wonderful thing. That’s great. That does speak volumes to how things are getting done and the people who work there and all of those things.
When the Auditor General did his report, however, there were some things - and obviously you agreed with a lot of it, because you’ve already begun and made multiple changes. Can you tell me a bit about how you account for everything? Is it just a general spreadsheet? How does this work? Is it that easy?
MS. ESTELLE THERIAULT: I’m a fairly experienced lawyer, but I think I’d better direct that question to someone who knows much more than I do in accounting, and it’s Ms. Beverly Whittaker, who is Director of Finance, Administration and Systems in my office.
MS. BEVERLY WHITTAKER: Good morning. Currently we run a system which is called a public trustee account management system. We affectionately call it PAM, so at times I might refer to it as PAM. This system, besides accounting for, say, the client information, accounts for the financial items of our clients. For example, when funds do come in through the front desk, receipts are created and the money which is coming in is reviewed by two people and signed off to ensure that we have good, secure processes in place.
As well, when it comes back to accounting, the funds get deposited into the client’s account. We have different segregation of duties there, with signatures, and at any point, for example, for client XYZ, we could pull up and actually see what has been going on in their account.
The one great function of the PAM system is that we can run what’s called a client statement, which basically details all activity which has occurred into a client’s account, so all the funds coming in, all the funds going out, any payments, for example. If we have a client who may have a house with a power bill, it will show the payment of the power bill, also any purchase of investments that we do on their behalf to ensure that any funds that we have are being maintained and being kept. From there we do produce financial statements for once a year and those are the items that are given to the Auditor General to review during their financial audit.
For the actual information in the PAM system, it is all detailed there. It’s a regular money going in, money going out. Just to refer back to 6.16, which is an item about the need for a comprehensive accounting system, really what it is is the extrapolation of the information from the Public Trustee accounting system into the presentation on the financial statements. It is a process which is a little bit timely. We actually may have to sum items up on Excel sheets and then those items are put directly on to the financial statements. To help with this process, a mapping has already been completed which shows where a number, that shows up on the financial statements, originated from on the Public Trustee accounting system.
MR. PORTER: How long has the PAM system been in place?
MS. WHITTAKER: If I can give you a little bit of history here, when I started with the Public Trustee Office in 2003 there were two systems, one being a DOS-based system and one being an Oracle-based system. The two didn’t talk very well to each other so in 2005 we started the procedure of looking for a new program which would give us more flexibility, provide some of the items that the Auditor General had been asking for at the time such as accrued interest, being able to pull that information. At that time in 2005 we went to the different Public Trustee Offices. We also checked to see what other products were out there and available that would take care of trust accounting. We had discussions with IT and basically we did an analysis at that time and the decision was to go with the Public Trustee accounting system. It is an Oracle-based system which is supported by our IT department. Throughout the years as new information has been required - for example can you run a report on this or we’d like to be able to see these details - the flexibility with this program has been that we can go to our wonderful IT people and say can you possibly give us this information on a report, or can you modify this? Can I have this field added? And they have been wonderful and they’ve been able to make those changes.
MR. PORTER: You spoke a minute or two ago about filing your year end and all of that, what’s the process? I think, I’m not sure - I don’t want to put words in your mouth - you said it was a bit time consuming. What is the actual process now you have got to get into this GAAP standard I assume, the Generally Accepted Accounting Principles that are required or being recommended at least.
MS. WHITTAKER: The process is that - actually just to take it back a couple of steps . . .
MR. PORTER: Yes and maybe just on that, while you are going through it, the next piece of that was risk for error. I was curious about the risk of error in all of this.
MS. WHITTAKER: We balance our accounting work on a daily basis. From there we also, at the end of the month, pull different reports from the system. These reports are then used towards the preparation of the financial statements at the end of the year. On the actual March 31st date we have to run certain reports such as what is the accrued interest on all of our investments for our clients? We include the number on our financial statements. There is some analysis that is done on particular items such as duplicate transactions, which is where you have an item that has to be referenced on - for example, if you have two estates, they have to be referenced on two estates for court purposes. But for financial purposes, you only want one of them showing, so we go through and we remove those types of items.
The auditors usually come in around April, and they do a count of all of our investments to ensure that they are correct, that the numbers that are on our financial statements are accurate. Then they would come in and start testing some of the reports that I provide them, such as, what are the revenues of the client? This is the information that is coming from the PAM system: basically, the funds that are coming in for our clients - their pensions and annuity payments, as well as their expenses - in that case, the payments for Nova Scotia Power, for their cost of care, for distributions of the estates. We do provide a report of where that falls on our income statement, and that is tested by the Auditor General when they come in to do their financial audit.
The risk of error: the reports that come from the PAM system are put on to Excel sheets. It’s basically a copying and pasting process which they then total up, and then these numbers go on our financial statements. I’m trying to think what the risk would be there - possibly data entry, but any of our numbers that are run through there are verified.
MR. PORTER: The Oracle system is planned to stay in place, then, with the continual moving over, or are you actually eliminating that now?
MS. WHITTAKER: What we have done so far with regard to that particular recommendation is we have gone through and identified all the elements that have come out of the recommendation from the Auditor General to ensure that they’re going to be included in any program we’re looking at.
At this point, we are looking at having a business case completed. We’re actually meeting with him this afternoon. A consultant has been hired, and we expect to have the results of the recommendation by June 30th. What we expect from them is all the recommendations that came from the report to ensure they would be implemented, as well as providing a cost-benefit analysis of each option that they do come out with and having a recommendation for the best program. The programs we assume they will look at are the Public Trustee accounting system. Other programs are out there, such as ACCPAC or Simply Accounting or even the government SAP program - that’s out there.
When this recommendation comes out, we have to ensure it will be a program that is supported by IT. It has to be expanded. Between 2006 and now there have been so many changes with accounting standards, as well as how we present our financial statements. We need a program that’s going to have the ability to be changed to include more information, to give additional reports as they’re requested.
Also, it’s very important that the program we end up with will work operationally with our current accounting processes, while not adding any additional accounting staff. We don’t want a double entry, for example.
MR. PORTER: I would see that as one of the risks. You talked about the copy and paste, and I guess there’s always a risk when you’re moving anything, but certainly that, and the ease of use too. I’m not technical in any way, shape, or form - I know a little something about basic things but I think about access, you can enter tons and tons and write all the programs you want and create all the reports you want but I’m not sure that that works. It seems rather a simple thing to do and it shouldn’t be that complicated.
One quick question I would ask is, and again I asked it toward the end of my last set, was compared to other jurisdictions everybody is obviously in the same circumstance, they are all trying to account money in and money out, and again it sounds rather simple. Is part of this - you know you say you are meeting this afternoon and you’re trying to put together the thing, are you looking at those jurisdictions and saying hey, this works great in said province and it has been audited - and we know that nothing is ever risk-free, so I don’t want to use that term, but the risks are minimized - is this the process we’re looking at here?
MS. WHITTAKER: The other Public Trustee Office, I would assume would be included there, but just to let you know when we’ve already done our analysis, we completed it back for the Public Trustee accounting system, as well as we’ve had discussions with the other offices when different changes standards were coming out and we started talking about how things are accounted for on their systems, we did talk to them about what programs they were using. A couple of names came up, of which I think some of them we had already checked when we looked into the original Public Trustee accounting system. Some of the issues there were the sheer volume for example that may go through for transactions in, let’s say, Ontario. Therefore, their program, if I remember correctly, you’re looking at a multi-million dollar program which we don’t have that right and it’s not really needed for the numbers that are going through our system.
From talking to the other offices, what was interesting was some of the items that we’ve kind of addressed that may come up when looking at a new accounting system such as, let’s say, gains and losses, trying to think about how they will be accounted for properly because there is some analysis that is required.
What was interesting when I talked to them, they actually said the same thing, like their program might be able to pull this information, but what’s interesting is that a lot of the times they have to go through it and analyze and kind of adjust it all the way through.
MR. PORTER: Thank you. Just quickly - and I know I’m running out of time, I’ve got about a minute and a half - the total transactions through your office last year were $47 million, $43 million? I know you quoted it, I’m sorry.
MS. ESTELLE THERIAULT: The total value of our assets under our care is $47 million, but I believe - and Ms. Whittaker could best tell us - we received income in of pension cheques, interest cheques, et cetera, about $7 million . . .
MR. PORTER: Okay, and I don’t want to cut you off, but I’m down to one minute . . .
MS. ESTELLE THERIAULT: . . . $9 million out, $7 million of income in. These are transactions.
MR. PORTER: Okay, so to me that’s a lot of money and I would think to most anybody that’s a lot of money, and of course the accounting of the assets is a great deal of money. It’s interesting when you talk about a multi-million dollar system, and again maybe I’m a little too simple on some of this stuff, I couldn’t imagine we’d be looking at that kind of figure but maybe we are. I would see $9 million even at that being significant and that we would want a system, and it would cost us. I’m sure there has got to be a cut-off that’s reasonable and a program that works.
I guess I just want to, in closing, say that I think we’re dealing with a significant amount of money and trust in this, so I would hope that in part of the recommendations being completed and accounted for that we are going to spend what is necessary to make sure that we’re looking after the people in the public trust.
I know my time is up, Mr. Chairman, thank you.
MR. CHAIRMAN: Thank you, Mr. Porter.
MR. GARY RAMEY: Thank you very much, Mr. Chairman. You’ve already answered a good number of my questions and I think Mr. Epstein, my colleague, still has a few, but I just have two really quick ones. One is just to get clarification on something that Mr. Younger actually asked earlier on - this term came up which I was not even familiar with and I guess that’s why I’m asking the question again about this register where people’s names go if they pass on.
MS. ESTELLE THERIAULT: Oh, the Royal Gazette.
MR. RAMEY: Yes, and I think Mr. Younger asked the question kind of like, who knew? I mean I’ve never really heard much about that. How does one find out about this, other than googling it or something like that? I mean, how would the ordinary citizen know this, since none of us seem to know very much about it?
MS. ESTELLE THERIAULT: The Royal Gazette has been - how do you find out about it? On-line, I would think, but it was and still is a paper addition. I would think they are available in public libraries, I can’t confirm that. They are definitely available at the public Legislative Library, I am sure. Any lawyer who is involved in assisting families about estates would know of The Royal Gazette. Credit companies, debt collectors actually follow The Royal Gazette; trust companies do, I know some of the charities do because I’ve been told that by some of the charities that say we knew that this lady had named us.
There is a lot of information in The Royal Gazette and I know I will fail in telling you everything that’s there: everything from when someone’s appointed a commissioner, things dealing with motor vehicle matters, corporations - I’m looking at Mr. Epstein for help - every deceased file when it’s first started, the notice for a deceased file appeared for six months in The Royal Gazette, and it’s a weekly publication, motor carrier things. This publication has been in existence forever.
MR. RAMEY: I’ve heard of The Royal Gazette I just didn’t know that it did the death thing there. I guess my point would be that for many of my constituents, for instance, they don’t have a computer, never had a computer, never plan to get one, because they are seniors - and that doesn’t mean seniors don’t use computers, lots of them do - but many of my seniors don’t, don’t care to have and may not have a lawyer, may not have a will, may not have any of that. They wouldn’t really know what the dickens The Royal Gazette was so I guess that was my point there. My second question, and then I’ll turn it over to Mr. Epstein, is the Auditor General had a number of recommendations around employee access and inventory procedures in the storage volt. Can you just tell me what has been done about that at this point?
MS. ESTELLE THERIAULT: That can be best answered by Ms. Whittaker.
MS. WHITTAKER: We had already been completing, on an annual basis, an audit of all the items in our vault. Our vault is basically when an item comes in, it gets inventoried, and is kept in this secure alarmed area on-site that is only accessible by accounting. The problem that came about during the performance audit was when asked well can you confirm and tell me when it was done and who completed it, well no we didn’t keep the documentation. Right away we created a policy that states, once a year, two people, one who will be an accounting person, the other preferably a non-accounting person, will go through. We actually run these particular reports from the Public Trustee accounting system, which references every item that should be in that vault and we do a cross-reference and it’s signed off on by both parties and each year it is kept in a particular file so that if we ever have to refer back to it, we can confirm exactly what was there and who reviewed it.
MR. RAMEY: Thank you very much. I’ll turn it over to Mr. Epstein again.
MR. EPSTEIN: As you recall, I was just running through the Auditor General recommendations and next one would have been 6.16 but I gather from your exchange with Mr. Porter earlier that the state of play on that is that you are very close to choosing a financial accounting and reporting system. Did I understand that correctly?
MS. WHITTAKER: We will hope to have a recommendation on June 30th after our consultant reviews all the different programs that are out there and gives us the best options, again, on cost, what will be best supported as well as for what will meet all the recommendations that came from the report.
MR. EPSTEIN: And when you have chosen a system how quickly after that, Ms. Whittaker, do you think you will be up and running with it?
MS. WHITTAKER: I think it’s really going to depend on what program is recommended, how quickly, with the help of IT, that the program can be - either if it’s a new program totally or an addition to our current system - how quickly it can be put on as well as tested to make sure that the information that is coming out of it is correct and accurate.
MR. EPSTEIN: It is a question of weeks, a couple of months, six months after that? What do you know?
MS. WHITTAKER: It’s really hard to say at this point because we don’t really know what the product is, what the recommendation is going to be. Let’s say it is a modification to the Public Trustee accounting system, we would then go to our IT people, because they also are aware that this is a very pressing and serious recommendation, and ask how long would it take for such a modification, what is the best way to go about this?
So our plan is, as soon as we get the recommendation, to keep moving on this very quickly.
MR. EPSTEIN: Okay, thank you. I have another question about how the money assets that are in the hands of the Public Trustee are accounted for. I see that you have something called a Common Fund and there’s also a Special Reserve Fund. I’m wondering if you could explain exactly how this works.
My impression, reading the books, is that the Common Fund is where the assets are pooled, that is the assets of the clients or the beneficiaries you are dealing with. Is that correct?
MS. WHITTAKER: That’s correct.
MR. EPSTEIN: Okay, so that would be the basic, most important fund that you operate, is that right?
MS. WHITTAKER: Correct.
MR. EPSTEIN: So just what exactly is the Special Reserve Fund? It wasn’t 100 per cent clear to me just how money actually got generated for that and what it was used for.
MS. WHITTAKER: I’m going to start off on this and I may defer to Estelle if it comes up with something a little bit to the legislation.
The Special Reserve Fund is a fund which is maintained between the Public Trustee Office and the Deputy Minister of Finance. What are basically held in there are longer-term investments. The money - if I can kind of walk us through it there - any excess funds from our clients are invested in what is called Common Fund Investments. These investments, on an annual basis, usually, will create income and then that income, at the end of each fiscal year, after the audit is complete, will then be transferred over to the Special Reserve Fund.
The Special Reserve Fund is comprised of generally longer-term, very secure investments, which earn interest.
MR. EPSTEIN: I guess what seems to appear, as I read the financial report, is that some of the interest generated by investments would be allocated to the clients themselves but some of it seems to flow to the Office of the Public Trustee - am I reading that correctly?
MS. ESTELLE THERIAULT: I think I wish to go back three steps to explain a bit more about the Common Fund. The Common Fund is where the initial cheques are deposited - someone’s bank account, $1,500 or $2,000 and their pension cheques. It has been our practice to buy individual investments for our clients’ funds, in the client’s name, Public Trustee in trust for Mary, Public Trustee in trust for whomever.
What we tend to keep in the Common Fund is just the monthly or two-month need of that client. We have a policy and procedure established that excess funds in that account are not left there. We buy individual certificates, or shares, whatever, depending on the amount of money the party has, their age, et cetera, in the individual’s name. So our common fund is largely like the client’s bank account. It’s not all the, say, $35 million cash; we have individual certificates in another reporting schedule.
What we have in the Common Fund is basically the client’s bank account, the small amount of money that we need to keep for the client.
MR. EPSTEIN: I think I understand that. The point of my question really was what determines what portion of interest return is allocated to the individual and what portion is allocated to the Public Trustee Office for its general purposes?
MS. ESTELLE THERIAULT: The amount of interest that a client can earn in the Common Fund is set by regulation and it is - I don’t have the regulation off the top of my head, I apologize - but it’s a very low amount, almost like a savings account, as you would not be expecting to earn large money on your chequing account. Any interest that can be credited to the client is done so pursuant to the regulation. Any excess interest over and above that that does not have to be paid by the regulation is the amount that is transferred to the Special Reserve Fund.
The Special Reserve Fund was established to meet, if the Public Trustee Office was ever dissolved, if there were ever a shortage, say, in what we had to pay - I don’t know how the shortage would occur - but that would be our stop-gap.
MR. EPSTEIN: Okay, so the amount is set by regulation, it’s only about $2.5 million in the special reserve fund as I read it, is that right? I’m looking at Page 13 of your last annual report, it seems to be about $2.4 or $2.5 million - $2.6 million, I guess, as of March 31, 2012.
MS. ESTELLE THERIAULT: I’m sure you’re right; without looking at it, that sounds very familiar, yes.
MR. EPSTEIN: Okay, thank you. I’d like to move on to something else if I could. I’m curious about the position of infants that might be amongst your clients. Again, I’m looking at your annual report from last year. I see that you have listed amongst your almost 1,300 clients, 192 infants with estates - these are infants who are living. Would some of these be, for example, minors who are orphaned but have no relatives that would step in?
MS. ESTELLE THERIAULT: The children we have under our care may be orphans and they have both their parents alive and well. A parent is guardian of a child’s person by law. You may decide where your child goes to school, have surgery or sign a consent to go to camp. In no jurisdiction, in Canada or in England, is a parent automatically guardian of the finances of their child.
There is a piece of legislation called the Guardianship Act which actually I drafted a number of years ago, which establishes a procedure that a parent may go to the court and be appointed guardian of the finances of their child. Our legislation, a bonding may be required, it may be waived by the judge. So if there are funds payable to a child and there’s no trustee named on the beneficiary card or they’re receiving funds through intestacy, if there’s no court-appointed guardian of the finances of that child, the Public Trustee of Nova Scotia is, without court order, guardian of the finances of every child in this province.
Therefore, the funds we have in trust for those children come to us in various ways: a father may have died, they were divorced, the child is the only heir, and the mother does not apply for guardianship under the Guardianship Act. The funds are paid to my office, I hold and invest the funds for those children, and the funds are used for the maintenance, education and support of the child. We hand it over when they’re 19.
It could be in a life insurance policy, a person at work leaves their child without trustee, that’s how I get the funds. If I get the funds through insurance or intestacy or beneficiary of an RRSP and the parent then decides I’d rather manage it, not the Public Trustee, we always encourage them to do so. If they get appointed guardian of the finances of the child under the Guardianship Act, the Public Trustee immediately will account to the parent or whoever has been appointed guardian of the finances.
The children that we do have, they come in an assortment of ways and it could also be, as well, that we are asked by the courts often to be a trustee for children, for court-awarded settlements, because the courts want a bond. Our courts are very protective as far as wanting to protect those who can’t protect themselves, so we’re in great favour of bonding in this jurisdiction and I support it. I have some funds, as well, that I receive by court order.
MR. EPSTEIN: This is a very interesting point, thank you. Do I have any more minutes?
MR. CHAIRMAN: You have about eight seconds.
MR. CHAIRMAN: I would ask Ms. Theriault if she has any wrap-up comments.
MS. ESTELLE THERIAULT: I know I only have two minutes, and you know I can go on at length. I do want to thank the committee for inviting us. I regard this as an opportunity to allow the MLAs that are passing laws or dealing with their constituents to know what we do. We do excellent work. I’m very proud of what we do, and I thank you for taking the time to listen to us today, and I apologize if I went on at length and you may not have gotten all your answers to all your questions. Thank you.
MR. CHAIRMAN: Thank you very much, it was very informative today, and indeed thank you for coming. We appreciate your appearance here.
Just some committee business now - the request for information at the meeting on March 27th was received from the Department of Finance, and that has been distributed to all members.
There will be a subcommittee meeting immediately following this meeting today - in camera - to set the agenda. There will be no in camera meeting on May 1st due to rescheduling of the witnesses. And the meeting of May 1st has been cancelled because of some difficulties getting witnesses here.
Our next meeting will be May 8th, and it will be the Department of Community Services re the Housing Development Corporation. There will be no in camera briefing at that meeting.
The Trade Centre has been rescheduled to June 12, 2013, and there will be an in camera session on June 5th regarding that.
Unless there is any other business, an order to adjourn?
MR. CLARRIE MACKINNON: I so move.
MR. CHAIRMAN: Thank you, Mr. MacKinnon, we stand adjourned.
[The committee adjourned at 10:57 a.m.]