Leaving beneficiary details helps streamline estate administration
Not everyone lives and works in the community in which they grew up, surrounded by family and friends.
Many leave to pursue opportunities elsewhere, maybe never to return. Family ties may weaken in time, and contact is lost. What if you want to leave them something in your will?
In one case1 an overseas-born deceased had been residing in Australia only a few years. In his will he left half of his estate to a named person, the executor, and the other half to “my remaining relatives”.
This seems straightforward you might think, but it was over five years post death before administration of the estate could be finalised, following the executor’s application to the court for advice and direction on what to do.
The source of several problems said the court were the words “my remaining relatives”. One problem was construction of its meaning in the will; there being a large body of law on such matters. Another was determining who were the “remaining relatives”, and then how should the gift be divided among them – in absolute amounts or as a proportion, per capita (by the head) or per stirpes (by the stocks)?
Finding “remaining relatives”
The executor was a financial adviser to the deceased and unrelated. The deceased had never married, had no children, and both parents had pre-deceased him. To locate any siblings and other living relatives who would fall into the class of “remaining relatives” the executor made searches, inquiries and investigations overseas over a long period.
It was found that the deceased had two sisters, both had predeceased him. Both had married and had children. The offspring of one sister could not be found. Of the other sister’s family, only one son and one grandson were living.
In other words “remaining relatives” amounted to the living nephew and great-nephew and possibly any living offspring or issue (see box above) of the other sister, but none of these could be found.
Distribution per capita (by the head) to those living at the date of death
From the legal authorities, the court said that the half share of the estate given to a class of people identified in the will as “my remaining relatives” would be distributed among them in equal proportions. That is, each relative alive at the deceased’s death would take per capita (see box below). Two living relatives had been identified – the son and grandson of one deceased sister.
But the problem was, as the court said, it was not established for certain, how many were in the class, (the offspring of the other sister having been found). So how to determine what share could the two living identified relatives take?
A special court order to permit distribution and finalisation of the estate
The courts have overcome this problem by making a special type of order for when beneficiaries cannot be located nor identified but come within the class to take. It is called a Benjamin order2, after the decision in an English case in which a similar problem arose. Basically it means that when there is uncertainty about distributing the estate; and extensive but inconclusive inquiries have been made, the court can make an order permitting the executor to go ahead and distribute, and so complete the administration.
The executor is protected from liability to anyone who subsequently appears. If they are eventually located or identified, they can make a claim and be entitled to trace the funds distributed to those already identified. This is because the order does not affect the legal rights of anyone who would be entitled but cannot be found at the time it is made.
The Benjamin order principle is resorted to in difficult situations to overcome practical problems and provide convenience in administration.
The court decided that in the circumstances a Benjamin type order be made where the half share of the estate given to “my remaining relatives” was to be distributed between the son and grandson of the deceased sister in equal proportions. But without prejudice to any offspring of the other sister in case they were ever identified and located, so that they could claim a share of the estate, by tracing the distributed assets.
Some take-away points
- If you wish to make a gift to a particular group in your will, try to identify it in a suitable way, and say how you want the gift to be distributed among them. Consult a solicitor to assist you in expressing your intentions for your situation.
- Keep a record of names and some contact details of your relatives’ and other beneficiaries, as the case may be. A simple form can be downloaded here. Store it with your personal papers and try to keep it updated. This can assist your nominated executors in their administration tasks if they have not known you.
Distributing a gift on a per capita basis
In a per capita distribution the gift is distributed in equal shares among those living in the defined group or class. Only those living at the date of the willmaker’s death can participate. Anyone who died before the willmaker cannot be included. Nor can any of their offspring take instead. This is different to the other sort of distribution known as per stirpes distribution.
The graphic below demonstrates a per capita based distribution. The five living offspring are entitled to take the same proportion being one fifth.
1. Application of Marais  NSWSC 206
2. Re Benjamin  1 Ch 723
20 January 2015
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