When administering an estate, the presence of a missing beneficiary can pose significant challenges. Executors must navigate complex legal and practical issues to ensure the estate is distributed appropriately while fulfilling their fiduciary duties.  This article explores the steps required when dealing with missing beneficiaries, the Court’s expectations, and the importance of seeking legal advice to protect yourself from personal liability.

What must be done when there is a missing beneficiary?

The first step in addressing a missing beneficiary is conducting thorough searches to locate them.  Courts require evidence that all reasonable enquiries have been undertaken before granting relief.  These searches may include:

1. examining records from births, deaths, and marriages registries, electoral rolls, and property ownership databases;
2. searching social media platforms;
3. making enquiries with family members, former associates, and institutions connected to the missing person; and
4. in some cases, engaging a professional genealogist or investigator.

If the beneficiary cannot be located despite exhaustive efforts, a prudent executor may apply to the Court for judicial advice and directions.

This application often seeks a “Benjamin Order” which, if made, allows the executor to distribute the estate based on practical probabilities while protecting them from personal liability if the missing beneficiary or their descendants later emerge.

The Court’s expectations in terms of searches

Courts in South Australia, as in other jurisdictions, expect executors to demonstrate that all reasonable searches have been conducted.  Factors considered include:

1. the length of time since the beneficiary was last seen;
2. the quality of the searches undertaken; and
3. whether further enquiries are likely to yield useful information.

The Court also considers the size of the estate and whether additional investigations would impose unreasonable costs.

The decisions in Application by Walsh & Anor (Estate of Robert Charles Walsh) and Application by NSW Trustee & Guardian (Estate of Edward Charles Turner), provide useful guidance on the types of searches expected and emphasise the importance of balancing the interests of the missing beneficiary against practical probabilities and the need to avoid unnecessary costs in small estates.

Applications for judicial advice and directions

Applying for judicial advice and directions is a critical step in cases involving missing beneficiaries.  Under section 95 of the Succession Act 2023 (SA), the Supreme Court of South Australia has jurisdiction to supervise estate administration and provide guidance to executors.

A Benjamin Order is often the preferred mechanism, as it does not extinguish the rights of the missing beneficiary but provides the executor with protection against liability.

The application process involves preparing affidavit evidence detailing the searches conducted, the circumstances of the missing beneficiary, and the proposed distribution of the estate.  The Court will generally order that the costs of such applications be paid from the estate as a whole, rather than the missing beneficiary’s individual share.

The duty on the executor

Executors have a fiduciary duty to administer the estate in accordance with the terms of the will and applicable laws.  They must act diligently and prudently, ensuring that all beneficiaries are accounted for before distributing the estate.  Failure to address the issue of a missing beneficiary adequately can result in personal liability for the executor.

In cases where a missing beneficiary has not been heard from for over seven years, the presumption of death may apply.  However, this presumption does not alleviate the executor from their responsibilities and does not resolve questions about gift-over provisions and whether the beneficiary left descendants who are entitled to their parent’s share of the estate.  Therefore, in these circumstances, it is strongly advised that executors seek judicial advice to ensure compliance with their duties.

 Missing beneficiary insurance

Missing Beneficiary Insurance provides an additional layer of protection for executors and the beneficiaires who receive the missing beneficiary’s share of the inheritance.  This insurance covers claims made by a missing beneficiary or their descendants after the estate has been distributed. While it is not a substitute for judicial advice, it can complement a Benjamin Order by mitigating financial risks.  Premiums are assessed based on the value of the estate, the searches conducted, and the level of risk.

What next?

Dealing with missing beneficiaries requires careful attention to legal and procedural requirements.  At PGC Legal, our estates team specialise in estate administration and can assist executors in navigating these complex issues.  If you are facing challenges with a missing beneficiary, contact us today for expert advice and support.

If you’re an executor or involved in administering an estate, let us help you ensure the proper administration of the estate while protecting your interests.

For assistance, call PGC Legal on (08) 8221 6162 or email Peter Charatsis, Partner or Charlie Bruce, Associate.

The above is general in nature and is not intended to, and does not, constitute professional advice.