Sometimes a beneficiary of an estate cannot be located even after the personal representatives have made reasonable enquiries to trace them such as advertising in the local paper or instructing an enquiry agent.
In these circumstances, the personal representatives have three options:
1. Distributing to the known beneficiaries in return for an indemnity from them to reimburse the personal representatives should the missing beneficiary come forward. In practise, this may be worthless unless the beneficiaries provide the personal representatives with tangible security;
2. The personal representatives can purchase an insurance policy to insure against the missing beneficiary being traced. The insurance premium will be payable by the estate. This is the most practical option for smaller estates.
3. The personal representatives can apply for what is known as a Benjamin Order.
This enables the personal representatives to distribute the estate in accordance with the terms of the order made by the Court. The Court will make the order on the presumption that the beneficiary died before the deceased.
Should it be the case that the missing beneficiary has not died, then he or she will later have the option to pursue the other beneficiaries for their share of the estate.
In this scenario, the deceased’s personal representatives will not be personally liable under the Benjamin Order.
In some instances, a beneficiary may refuse to accept their share of the estate. In these circumstances, the personal representatives have two options they can pursue:
1. Apply to the court for direction
Personal representatives must be careful - where it is obvious that the court is likely to issue directions, the other beneficiaries may have a legitimate complaint that the personal representatives acted unreasonably by incurring the unnecessary and costly expense of applying for directions in the first place.
2. Payment into Court
A personal representative can pay the beneficiary’s share into court. This has the same effect as obtaining a valid receipt from a beneficiary. This is not the usual choice however.
The main concern for any personal representative is that the uncooperative beneficiary will seek reimbursement of the costs incurred as a result of their share being paid into court. Still, the personal representative will only be liable if the decision to pay the share into court was ‘unreasonable’.