Missing Beneficiaries (WA)
A testator leaves bequests to beneficiaries in their will, assuming that there will be no difficulty locating these heirs. The executor in charge of the estate is responsible for tracking down these individuals, but it is not always easy to locate the beneficiaries named in a will. In the period between when a testator executes a will and passes away, the beneficiary might move, change their name, or die themselves. This article explains what an executor should do to locate beneficiaries and the executor’s options if they cannot locate these missing beneficiaries.
Locating Beneficiaries Of A Will
One of the executor’s first tasks is to locate all the beneficiaries of the deceased estate. Ideally, a testator should provide enough information in the will and accompanying documents to help the executor easily find these beneficiaries. It is best practice for the testator to check the contact details of the beneficiaries when they review and update their will. Some testators go the extra mile by leaving a Letter of Wishes that includes each beneficiary’s current address, email, phone number, next of kin and even employment contact details.
The executor should start searching for a missing beneficiary by contacting the deceased’s family and friends. These people are most likely to have insight into the beneficiary’s location or where the executor can begin searching. The next step is for the executor to advertise in a local newspaper in the area where the beneficiary previously resided. Even if the beneficiary does not see the advertisement, another reader may provide a clue about the beneficiary’s whereabouts. An executor struggling to find a missing beneficiary should also check whether the individual has a social media account, such as Facebook or LinkedIn. Depending on the size of the estate, the executor may consider hiring an investigator to track down the missing beneficiary.
What if there are still Missing Beneficiaries?
Sometimes an executor exhausts every avenue and is still unable to locate a beneficiary. In that event, how the executor should proceed depends on the specific wording of the will, the other beneficiaries’ wishes and the overall likelihood of eventually finding the missing beneficiary.
The executor has the following options when they cannot locate a missing beneficiary:
- Missing beneficiary indemnity insurance. Taking out insurance allows the executor to finalise the estate without risk as the insurance company will pay out if the missing beneficiary comes forward in the future. This is a good option if the estate has sufficient funds to purchase the insurance policy.
- Alternatively, the executor can hold the gift in a reserve fund in case the beneficiary is located within the limitation period. This is a less attractive option as the executor’s obligations to the estate will continue for years.
- The executor can choose instead to seek indemnity from the other estate beneficiaries. If the executor passes the remaining share to the other beneficiaries, they would have to reimburse the missing beneficiary if necessary. This is a risky option as the beneficiaries may not be in a position to repay the funds later.
- The executor can pass the bequest over to the Supreme Court of Western Australia. This takes the problem out of the executor’s hands, but it does mean that the funds remain unavailable to the other beneficiaries.
- A solicitor may recommend that the best option is for the executor to obtain a Benjamin Order from the Supreme Court. This common law principle derives from a Chancery Court decision, In re Benjamin; Neville v Benjamin . In this case, the estate administrator could not find a missing beneficiary despite extensive searches. Upon hearing the facts of the case, the judge decided that it was fair for the administrator to distribute the estate on the assumption that the missing beneficiary was deceased. The Supreme Court of WA has jurisdiction to make a Benjamin Order based on the known facts, regardless of whether there is proof of the beneficiary’s death.
If the Supreme Court grants a Benjamin Order, the executor is protected from liability even if the missing beneficiary subsequently emerges. Still, there are drawbacks to this option. If the missing beneficiary is eventually located, the other beneficiaries may still have to repay the bequest. Also, the legal costs of obtaining this order are considerable as the executor must prove that they have pursued all reasonable lines of enquiry to locate the missing beneficiary. Under the Trustees Act 1962, the executor must publish appropriate advertisements asking the beneficiary to make contact within two months.
In Bickford v Benson , an executor applied for permission to distribute an estate in a way that differed from the will. In this case, the deceased left an estate worth nearly five million dollars, with multiple bequests, including $5,000 to an individual who was unknown to the testator’s family.
The executor made extensive enquiries to find this beneficiary. The executor made enquiries of the solicitor who drafted the will, each beneficiary, the deceased’s former employer, and placed advertisements in newspapers and the Western Australia Government Gazette. The executor searched electoral rolls and death notices and contacted everyone with the beneficiary’s name. Despite these efforts, the executor was ultimately unable to locate the missing beneficiary.
The court concluded that the executor had no choice other than to seek a Benjamin order, as there had been appropriate and extensive enquiries and the rights of the remaining beneficiaries were paramount. The court ordered that the missing beneficiary’s share of the estate form part of the residue and be distributed to the residual beneficiaries. The court did note that the other beneficiaries may be subject to a claim “for tracing” if Ms Jones comes forward after the final distribution of the estate.
Call 1300 038 223 if you have questions about how to proceed when a beneficiary is missing. Contact the contested wills team at Armstrong Legal for advice on your options, including help to apply for a Benjamin Order.