Estate trustees have several obligations and duties to the beneficiaries and the deceased including the fiduciary duty to fulfil the intentions and carry out the administration of the estate of the testator, as outlined in their last will and testament.
Estate trustees have several obligations and duties to the beneficiaries and the deceased including the fiduciary duty to fulfil the intentions and carry out the administration of the estate of the testator, as outlined in their last will and testament. But Ontario lawyers have had to confront issues if a beneficiary cannot be found. How can an estate trustee ensure that the deceased’s wishes and intentions are fulfilled if they cannot locate a beneficiary?
The answer for Ontario lawyers is in obtaining a Benjamin order or payment of a beneficiary’s entitlement into court. In my view, Benjamin orders should remain a rare remedy for estate trustees and should be difficult to obtain. However, they are a necessity.
Take the case of Steele v. Smith, 2018 ONSC 401. In this case, the estate trustee was a long-time friend of the deceased and applied to the court for a “Benjamin order” — an order declaring that a beneficiary predeceased the testator.
Here, the estate trustee could not locate the deceased’s brother William, entitled to one third of 60 per cent of the residue of the deceased’s estate, after extensive efforts to locate him. These efforts included online searches, contacting family members and employing a U.K. tracing company.
The estate trustee’s application was opposed by the Office of the Public Guardian and Trustee, which submitted that the share of the unlocatable beneficiary should be paid into court so the executor could take further steps to ascertain this beneficiary’s whereabouts. The Office of the Public Guardian and Trustee submitted that William had other family — including an illegitimate son (John) conceived with a sister-in-law (Maureen) put up for adoption at birth — who could be contacted.
A Benjamin order derives from the 1902 Chancery court decision in Neville v. Benjamin where the testator was survived by 12 children. A 13th child, Philip, disappeared while on vacation after having embezzled funds from his employer. The court reasoned, in part, that, if Philip was alive, there was no reason why, due to the testator’s death, Philip would not come forward. As such, the Benjamin order was granted.
In Steele, Justice H.A. Rady noted that a Benjamin order is used to protect the estate trustee to wind up an estate without having to wait for the “unprovable to be proven.” Once a Benjamin order is obtained and an estate administered, should the lost beneficiary come forward, they will still have the possibility of claiming what is rightfully theirs if any estate property remains undistributed.
Of course, the inquiry made by the estate trustee to locate a beneficiary should be extensive and the court must consider and find that the inquiries by the estate trustee were sufficient given the specific facts of the case.
In making a determination, Rady relied on the Saskatchewan decision of Wieckoski Estate 2013, followed by the 2014 Ontario Superior Court decision in Kapousouzian Estate v. Spink, which sets out a number of questions that would assist the court in determining the adequacy of those inquiries for which questions include:
• How much time has passed since the testator died?
• What steps have been taken to locate the lost beneficiary and over what time period?
• What are the qualifications of the individual(s) making the inquiries? Who are they?
• Do the inquiries consider the possible location of the missing person?
• Are further inquiries likely to produce any additional information?
• What is the amount the lost beneficiary is entitled to pursuant to the will?
In considering whether to grant a Benjamin order, the court weighs protecting the estate trustee with departing from the intentions of the testator. The court should only grant Benjamin orders when it is satisfied that the failure of the lost beneficiary to come forward is not the result of a choice not to be found. The evidence should show that there is nothing else that could be done and that it is highly likely that the lost beneficiary will not come forward and the estate trustee has used up all possible attempts at locating them.
In Steele, in analyzing evidence, the court found that the estate trustee had gone to extensive lengths to determine William’s whereabouts, that there is no reason why William would choose to not come forward, that 18 months have passed since the testator passed away and that the estate trustee had exhausted the available avenues of inquiry. In considering the submissions made by the Office of the Public Guardian and Trustee in opposition to the estate trustee’s application, Rady found that Maureen would not speak about William and that John, being adopted at birth, has no information about William’s whereabouts. As a result, the estate trustee was successful in its application and the Benjamin order was granted.
In the normal course, if it was believed that William was still alive but for whatever reason was unwilling to come forward, the payment of the beneficiary’s entitlement into court would likely be the remedy awarded by the court. However, most importantly, in Steele, the court held that where it is highly unlikely that they would be claimed there would be no useful purpose to paying the funds into court.
The court should rarely depart from the testator’s wishes in their last will and testament. However, contrarily, when a beneficiary is not “officially” deceased, missing or lost for a considerable amount of time, the estate trustees need to have an avenue to pursue to finalize the administration of the estate.
Jonathan M. Friedman is a litigation lawyer primarily practising in estate litigation with Heft Law Professional Corporation.