How to change a financial manager

3-March-2014 Estates By Mark Streeter

A Guardianship case in the Supreme Court last October found that a financial manager could be replaced for reasons other than incompetence or impropriety if it was in the best interests of the protected person.

In M v M [2013] 1495, the Supreme Court decision saw the NSW Trustee being replaced as financial manager by the sister of the protected person’s family.

Another case in 1993 (Holt v the Protective Commissioner) found that a financial manager can be replaced due to incompetence or impropriety. It also indicated that the financial manager could be replaced if the evidence demonstrated that this would be in the best interests of the protected person and consistent with the principles in Section 4 of the Guardianship Act 1987.

The decision of M v M expands the guidelines, criteria and evidence the Court will look for in determining if a replacement of the financial manager is in the best interests of the protected person.

The facts of the case

The applicant filed a “summons” seeking to replace the NSW Trustee as financial manager.

Importantly and helpfully the NSW Trustee supported the application and did not oppose the orders sought in the application. The total amount of funds under management was $463,326. The proposed financial manager was the sister of the protected person who, at the time of the original order, was only nine years old.

The affidavits in support were filed by the newly proposed financial manager, a relative of the protected person and two unrelated witnesses who gave evidence of the fitness of the sister, who was a 24-year-old school teacher, to act in the protected person’s best interests. There was evidence that the proposed financial manager had taken advice from a local chartered accountant about how to best manage the protected person’s estate should she be appointed the financial manager.

The primary reasons given for seeking to replace the financial manager were:

  • The Defendant expressed frustration in dealing with the institutional management of his affairs and had requested a family member to assume the role.
  • The protected person is very close to his sister, trusts her and regularly discusses his personal affairs with her for the purposes of obtaining the benefit of her guidance.
  • Within the parties’ family and the broader community, the sister (proposed new financial manager) was recognised as having financial management skills.

The 16 guidelines required to replace a financial manager

In the judgement, the Court established 16 guidelines for any applicant seeking to appoint or replace a financial manager, which may be helpful for future reference. These 16 items should form the basis of the compilation of evidence in any application to replace a financial manager. To view these guidelines in detail, please see Paragraph 50 of the Court’s Judgment in M v M .

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Written by Mark Streeter

Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!

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