Everything is ready: probate is granted, the house is sold and most beneficiaries have been paid. One share remains. That beneficiary lives overseas, has moved, or simply does not answer letters. The executor cannot finish the estate, and remains personally liable if the money goes to the wrong person.
This is common in families spread across Australia and Asia. The good news is that executors have several options.
Step 1: Show that you have looked properly
Every option below depends on the executor having made reasonable enquiries. Keep a written record of each step:
- contacting relatives, friends and former employers;
- checking social media, professional registers and online directories;
- writing to every known address, including by registered post and email;
- placing advertisements, including in the country where the person was last known to live;
- for larger shares, engaging a professional tracing agent.
What is “reasonable” depends on the size of the share. The court does not expect an executor to spend more on searching than the inheritance is worth.
Step 2: Give statutory notice
Under the Trustee Act 1958 (Vic), an executor can publish a notice of intended distribution. Once the period in the notice expires, the executor can distribute having regard only to the claims they know about. This protects against unknown claims. It does not protect an executor who ignores a beneficiary they already know exists.
Step 3: Choose how to deal with the share
- Hold the share. The executor keeps it invested and pays it out if the person appears. Best suited to short delays, or where the person is likely to resurface.
- Missing beneficiary insurance. An insurer covers the executor if the person later claims. Best suited to modest shares, where a court application would cost too much.
- Benjamin order. The Supreme Court permits distribution as if the beneficiary had died, protecting the executor. Best suited to larger shares, or where the person has been missing for years.
- Court directions. The court tells the executor how to deal with the share. Best suited to unusual facts, or where beneficiaries disagree.
A Benjamin order comes from an English case of 1902 and is regularly made by Australian Supreme Courts. It protects the executor personally. A beneficiary who later reappears may still have a claim against the people who received the money.
When the beneficiary is known but silent
A beneficiary who is located but refuses to respond is in a different position. Their silence cannot hold up the estate forever. The executor should write clearly, setting out the entitlement, the steps required (such as identity documents and bank details) and a reasonable deadline. Explain that the executor will otherwise seek court directions to hold or pay the share. Translation into the beneficiary’s language often helps. Cost-effective service overseas, without expensive local process servers, can sometimes be arranged.
Avoiding the problem
Will-makers can help by keeping contact details for overseas beneficiaries with their Will, and by giving executors express powers to deal with untraceable beneficiaries.
Related reading
Chua Tan Associates assists executors with estate administration across Australia and Asia. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice. Victorian law unless stated otherwise.
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