What to Do When a Beneficiary Disappears – The Case of the Elusive Mr. Gordon
In 1954, a Mr Frederick Cutts passed away and left part of his estate to a Mr David Gordon. The problem? Mr Gordon could not be found.
Fast forward to 1997, the grandchildren of Mr Cutts were appointed executors of this final unresolved part of their grandfather’s estate. In addition to the attempts of prior executors, Mr Cutts’ grandchildren spent eighteen years searching for the elusive Mr Gordon – including applications to the Salvation Army Family Tracing Services, the New South Wales Registry of Births Deaths & Marriages and the Australian Government Department of Immigration and Border Protection (as well as a dozen other registries, businesses and government departments). The unprecedented diligence of the executors even managed to uncover an Incoming Passenger Information Card completed by David Gordon upon his arrival to Perth in October 2013.
Refer to this article to help prove the death of a missing person.
Cutts’ Grandchildren Admit Defeat
Despite this mammoth undertaking, all attempts to track down Mr Gordon were unsuccessful. In 2016, fearing that their task was all but unachievable, the executors threw in the proverbial towel and applied to the New South Wales Supreme Court to cease the search and distribute Mr Gordon’s share of the estate to all surviving beneficiaries of the estate.
Pembroke J (who presided over this application) held that the executors had more than discharged their duty to seek out Mr Gordon, and that any further searches would be unnecessarily expensive and time consuming. The remaining portion of Mr. Cutts estate had, over the years, dwindled as a result of the expense of these searches, and for fear of further reducing the estate, Pembroke J called off the search.
While it is clear that the executors in this case went above and beyond the call of duty, the question remains – what do you do when a beneficiary cannot be found?
The most commonly used solution to the problem of a missing or untraceable beneficiary is to seek what is called a ‘Benjamin Order’ from the Court.
A Benjamin Order (named after the famous English 1902 case of In re Benjamin) will permit the executor of a deceased’s estate to distribute any part of an estate held on trust for a particular beneficiary, if it can be reasonably presumed that the beneficiary has died and has in turn left no descendants who may still be alive.
As demonstrated in the case of Mr Gordon, proving that a beneficiary has both died and has had no children can be an extremely drawn out and difficult task. In order to sidestep the remote possibility that the beneficiary (or any of his/her children) may resurface, Courts have begun adding provisos to Benjamin Orders.
One such example appears in the New South Wales Supreme Court in 2013 in which the question of whether or not one of the intended beneficiaries had children could not be reasonably ascertained. The Court allowed a Benjamin Order, but in its orders made the condition that if a child of the now presumed-dead beneficiary ever appeared and made a claim against the estate, he or she would be able to trace their part of the estate from anyone who had received it. In other words, they would be able to ‘reclaim’ their part of the estate from the beneficiaries who had taken it under the Benjamin Order.
In light of the above, if you think that you may find yourself in a position to challenge a Will or Dispute an Estate or needing to speak to an Estate lawyer, please do not hesitate to contact the team at Hentys Lawyers today.