Learning Outcomes
After studying this article, you will be able to explain the duties and powers of executors and administrators in relation to identifying and dealing with both known and unknown beneficiaries. You will understand the legal procedures for tracing beneficiaries, the use of statutory advertisements and Benjamin orders, and the protections available to personal representatives under English law. You will also be able to apply these principles to SQE1-style problem questions.
SQE1 Syllabus
For SQE1, you are required to understand the practical and legal steps executors and administrators must take when dealing with beneficiaries in estate administration. In your revision, focus on:
- the statutory duties and powers of executors and administrators in identifying and locating beneficiaries
- the procedures for dealing with missing or unknown beneficiaries, including genealogical research and public notices
- the use and effect of statutory advertisements under the Trustee Act 1925
- the application and consequences of a Benjamin order
- the legal protections available to personal representatives who have made reasonable efforts to identify all beneficiaries.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What is a Benjamin order, and when might an executor seek one?
- What is the effect of placing statutory advertisements under section 27 of the Trustee Act 1925?
- What steps should an executor take if a beneficiary cannot be found?
- What legal protection does an executor have if a missing beneficiary appears after the estate has been distributed?
Introduction
When administering an estate, personal representatives (executors or administrators) must identify and pay all beneficiaries entitled under the will or intestacy rules. This process is usually straightforward when beneficiaries are known and easily located. However, complications arise when beneficiaries are unknown, missing, or cannot be traced. Executors must take reasonable steps to identify and locate all beneficiaries, as failure to do so may result in personal liability if assets are distributed incorrectly.
Duties of Personal Representatives
Personal representatives have a duty to collect in the assets of the estate, pay debts and liabilities, and distribute the balance to the correct beneficiaries. This duty includes identifying all persons entitled under the will or, if there is no will, under the intestacy rules.
Key Term: personal representative A person (executor or administrator) responsible for administering a deceased person's estate.
If a beneficiary is known but cannot be located, or if it is unclear who is entitled, the personal representative must take active steps to resolve the issue before distributing the estate.
Identifying Known Beneficiaries
Where beneficiaries are named in the will or are easily identified under the intestacy rules, the executor must verify their identity and entitlement. This usually involves obtaining proof of identity and, where necessary, evidence of relationship to the deceased (such as birth or marriage certificates).
If a beneficiary is a minor or lacks capacity, the executor must ensure that payment is made to a suitable trustee or guardian.
Key Term: beneficiary A person entitled to receive a share of the estate under a will or the intestacy rules.
Dealing with Unknown or Missing Beneficiaries
When a beneficiary is unknown, missing, or cannot be found after reasonable enquiry, the executor must take further steps to avoid personal liability.
Reasonable Enquiries
Reasonable steps to identify and locate beneficiaries may include:
- examining the deceased's personal papers and correspondence
- contacting known relatives and friends
- searching public records (birth, marriage, death, and adoption registers)
- instructing genealogists or tracing agents
- using online searches and social media
If these steps fail, further legal procedures are available.
Statutory Advertisements
Personal representatives are advised to place statutory advertisements under section 27 of the Trustee Act 1925. These notices are typically published in the London Gazette and a local newspaper where the deceased lived or owned property.
Key Term: statutory advertisement A public notice placed by personal representatives inviting claims against the estate, providing legal protection from unknown creditors and beneficiaries.
The notice invites anyone with a claim against the estate to come forward within a specified period (usually two months). If the executor distributes the estate after this period and a claim later arises, they are protected from personal liability, provided they acted in good faith and without knowledge of the claim.
Benjamin Orders
If, after exhaustive enquiries, a beneficiary cannot be found, the executor may apply to the court for a Benjamin order (from Re Benjamin [1902] 1 Ch 723).
Key Term: Benjamin order A court order allowing personal representatives to distribute an estate on the assumption that a missing beneficiary has died, protecting them from liability if the beneficiary later appears.
A Benjamin order authorises the executor to distribute the estate as if the missing beneficiary had predeceased the deceased. If the missing beneficiary is later found, they may claim their share from the other recipients, but not from the executor.
Worked Example 1.1
An executor cannot trace one of three residuary beneficiaries despite extensive searches and placing statutory advertisements. What should the executor do before distributing the estate?
Answer: The executor should apply for a Benjamin order, allowing the estate to be distributed as if the missing beneficiary had died. This protects the executor from personal liability if the beneficiary later appears.
Legal Protections for Executors
Personal representatives who have made reasonable efforts to identify and locate all beneficiaries are protected from personal liability in several ways:
- If statutory advertisements have been placed and the executor distributes after the notice period, they are not personally liable for claims from unknown creditors or beneficiaries.
- If a Benjamin order is obtained, the executor is protected from liability to the missing beneficiary.
- If the executor has acted honestly and reasonably, the court has discretion to excuse them from liability for breach of duty under section 61 of the Trustee Act 1925.
Key Term: section 27 protection Legal protection for personal representatives who have placed statutory advertisements and distributed the estate after the notice period.
Practical Steps When Beneficiaries Cannot Be Found
If a beneficiary cannot be found after reasonable enquiry:
- Document all steps taken to locate the beneficiary.
- Place statutory advertisements.
- Consider instructing a professional genealogist or tracing agent.
- If still unsuccessful, apply for a Benjamin order.
- Retain a reserve from the estate or obtain indemnities from the other beneficiaries if appropriate.
- Distribute the estate only after the above steps, to minimise risk.
Worked Example 1.2
An executor distributes the estate after placing statutory advertisements and making all reasonable enquiries. Six months later, a previously unknown beneficiary appears and claims a share. Is the executor personally liable?
Answer: No, provided the executor acted in good faith, made reasonable enquiries, and placed statutory advertisements, they are protected from personal liability. The new beneficiary may claim from the other recipients, not the executor.
Exam Warning
Executors must not distribute the estate without making reasonable efforts to identify and locate all beneficiaries. Failure to do so may result in personal liability for any loss suffered by a beneficiary who was overlooked.
Revision Tip
Always keep detailed records of all steps taken to trace missing beneficiaries. This documentation is essential if you need to demonstrate reasonable enquiry or defend against a claim.
Key Point Checklist
This article has covered the following key knowledge points:
- The duty of personal representatives to identify and locate all beneficiaries before distributing the estate.
- The steps required to trace missing or unknown beneficiaries, including genealogical research and statutory advertisements.
- The use and effect of statutory advertisements under the Trustee Act 1925.
- The procedure and effect of a Benjamin order.
- The legal protections available to executors who have made reasonable enquiries and followed proper procedures.
- The importance of documenting all efforts to locate beneficiaries.
Key Terms and Concepts
- personal representative
- beneficiary
- statutory advertisement
- Benjamin order
- section 27 protection
