Unascertained Beneficiaries & Benjamin Orders: Guidance from Stoyan v. Johnson
Stoyan v. Johnson, 2021 ONSC 7483
Unascertained beneficiaries are a challenging hurdle for an estate trustee to overcome when it comes to administering an estate. It is well established at law that an estate trustee is duty bound to ascertain all heirs who may have an interest in an estate,[1] and where a beneficiary cannot be found, or even ascertained, the estate trustee must go to great lengths to try and find them. Only once all avenues of search are exhausted will an estate trustee be discharged of their duty in this regard. Of course, this is easier said than done.
Pursuant to section 53(3) of the Trustee Act, an estate trustee cannot escape liability from heirs after expiry of a notice period. Put another way, the estate trustee cannot advertise casually for beneficiaries and then “run the clock” to see who comes forward—the estate trustee must actually search in order to discharge their duty, and protect themselves from future claims.
If an estate trustee believes they have exhausted their search, and discovered any and all beneficiaries to be ascertained, they may apply to the Court for a Benjamin Order. A Benjamin Order, if issued, will allow the estate trustee to treat unascertained beneficiaries as if they had predeceased the testator, thereby rendering any claims stemming from those kinships inoperative. When applying for a Benjamin Order, the estate trustee faces a high threshold to pass to show they discharged their duty and reap the benefits and protections a Benjamin Order offers them.
This is highlighted in the recently decided case Stoyan v. Johnson, 2021 ONSC 7483 (“Stoyan”). In Stoyan, the Applicant Estate Trustee sought, among other relief, a Benjamin Order. As we will see, ultimately, this relief was not granted.
The facts in Stoyan, are unfortunate. Thiodore Moiseas (the “Deceased”) died testate, with the only beneficiaries named in his Will being his spouse and son. Sadly, both his spouse and son predeceased the Deceased, and so the Deceased effectively died intestate, despite having made a Will.
In the absence of named heirs, brother and sister, Anthony Stoyan (“Anthony”) and Doris Johnson (“Doris”), came forward claiming to be the Deceased’s first cousins and only surviving next of kin. When it appeared as though the Deceased’s residence would sell under a power of sale, Anthony sought, and was granted on an urgent basis, a Certificate of Appointment of Estate Trustee Without A Will. Upon Anthony’s death, his daughter, the Applicant, sought appointment as succeeding Estate Trustee Without A Will, a Benjamin Order declaring, inter alia, that the only beneficiaries of the Deceased’s Estate are the late Anthony (through his estate) and Doris, and an order that the Estate Trustee may distribute the Deceased’s Estate to Anthony’s Estate and Doris in equal shares. Ultimately, the Court declined to grant the Applicant her requested relief.
Primary consideration in this case was that, at the time of the Deceased’s death, it was not known for certain whether he was survived by any next of kin for the purposes of distributing his Estate. As the Deceased had emigrated from Europe, and was thought to have remaining family in Greece and/or Macedonia, the Estate Trustee ought to have searched abroad to ascertain if any of the Deceased’s family remained.
The Estate Trustee was hesitant to advertise abroad for potential beneficiaries because, the Estate Trustee claimed, they would have no way to verify any responses received. The Court rejected this reasoning, and found that the Estate Trustee failed to adequately advertise for potential beneficiaries abroad.
The Court found that the Estate Trustee did not do enough to ascertain all potential beneficiaries—it was not that the Estate Trustee took no action, it was that they did not take enough action. The Estate Trustee took only the following steps to ascertain beneficiaries of the Deceased’s Estate:
- the Estate Trustee placed multiple ads in various local newspapers in Macedonia for “information about the family of [the Deceased] … from Toronto, Canada, who was born in the village of Antarctica, Florina”;
- the Estate Trustee attempted to retain a genealogy agency to research the Deceased’s family tree, however this agency was in the United Kingdom and could not work around the European Union’s privacy laws; and,
- the Estate Trustee “researched family records, and consulted with extended family and relatives” in order to conclude who she felt were the only beneficiaries (note that family records include published obituaries and marriage records).
The searches the Estate Trustee did undertake did not result in any found or ascertained beneficiaries.
When assessing the above, the Court concluded that these steps were insufficient to support the issuance of a Benjamin Order:
“It would be premature at this point in the proceeding for the court to declare, by way of a Benjamin Order, that any potential heir of the Estate, who would take on an intestacy, has predeceased the Deceased. In my view, there remain many unanswered questions respecting the Deceased’s next of kin and rightful heirs to the Estate. This is not surprising given that there has been no proper tracing of the Deceased’s genealogy. For example, reasonable efforts will need to be made to ascertain whether the Deceased’s son William died leaving issue who survived him; whether the Deceased’s father survived the Deceased; who the Deceased’s aunts and uncles are and whether any of them survived the Deceased; and who the children of the Deceased’s aunts and uncles are and whether any of them survived the Deceased. This information, to the extent it can be found, will be of great assistance in determining the rightful heirs of the Estate.” (at para 74, emphasis added)
In summary, the Estate Trustee did not discharge her duty to ascertain the heirs. While Stoyan may not rock-the-boat as far as the law on unascertained beneficiaries goes, it certainly reiterates the importance of exhaustive searches for unascertained beneficiaries and the obligations on estate trustees to pursue to them.
—
[1] Re Short Estate, (1941) 1 W.W.R. 593 (B.C.S.C.).
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Written by: WEL Partners
Posted on: February 4, 2022
Categories: Commentary
Stoyan v. Johnson, 2021 ONSC 7483
Unascertained beneficiaries are a challenging hurdle for an estate trustee to overcome when it comes to administering an estate. It is well established at law that an estate trustee is duty bound to ascertain all heirs who may have an interest in an estate,[1] and where a beneficiary cannot be found, or even ascertained, the estate trustee must go to great lengths to try and find them. Only once all avenues of search are exhausted will an estate trustee be discharged of their duty in this regard. Of course, this is easier said than done.
Pursuant to section 53(3) of the Trustee Act, an estate trustee cannot escape liability from heirs after expiry of a notice period. Put another way, the estate trustee cannot advertise casually for beneficiaries and then “run the clock” to see who comes forward—the estate trustee must actually search in order to discharge their duty, and protect themselves from future claims.
If an estate trustee believes they have exhausted their search, and discovered any and all beneficiaries to be ascertained, they may apply to the Court for a Benjamin Order. A Benjamin Order, if issued, will allow the estate trustee to treat unascertained beneficiaries as if they had predeceased the testator, thereby rendering any claims stemming from those kinships inoperative. When applying for a Benjamin Order, the estate trustee faces a high threshold to pass to show they discharged their duty and reap the benefits and protections a Benjamin Order offers them.
This is highlighted in the recently decided case Stoyan v. Johnson, 2021 ONSC 7483 (“Stoyan”). In Stoyan, the Applicant Estate Trustee sought, among other relief, a Benjamin Order. As we will see, ultimately, this relief was not granted.
The facts in Stoyan, are unfortunate. Thiodore Moiseas (the “Deceased”) died testate, with the only beneficiaries named in his Will being his spouse and son. Sadly, both his spouse and son predeceased the Deceased, and so the Deceased effectively died intestate, despite having made a Will.
In the absence of named heirs, brother and sister, Anthony Stoyan (“Anthony”) and Doris Johnson (“Doris”), came forward claiming to be the Deceased’s first cousins and only surviving next of kin. When it appeared as though the Deceased’s residence would sell under a power of sale, Anthony sought, and was granted on an urgent basis, a Certificate of Appointment of Estate Trustee Without A Will. Upon Anthony’s death, his daughter, the Applicant, sought appointment as succeeding Estate Trustee Without A Will, a Benjamin Order declaring, inter alia, that the only beneficiaries of the Deceased’s Estate are the late Anthony (through his estate) and Doris, and an order that the Estate Trustee may distribute the Deceased’s Estate to Anthony’s Estate and Doris in equal shares. Ultimately, the Court declined to grant the Applicant her requested relief.
Primary consideration in this case was that, at the time of the Deceased’s death, it was not known for certain whether he was survived by any next of kin for the purposes of distributing his Estate. As the Deceased had emigrated from Europe, and was thought to have remaining family in Greece and/or Macedonia, the Estate Trustee ought to have searched abroad to ascertain if any of the Deceased’s family remained.
The Estate Trustee was hesitant to advertise abroad for potential beneficiaries because, the Estate Trustee claimed, they would have no way to verify any responses received. The Court rejected this reasoning, and found that the Estate Trustee failed to adequately advertise for potential beneficiaries abroad.
The Court found that the Estate Trustee did not do enough to ascertain all potential beneficiaries—it was not that the Estate Trustee took no action, it was that they did not take enough action. The Estate Trustee took only the following steps to ascertain beneficiaries of the Deceased’s Estate:
The searches the Estate Trustee did undertake did not result in any found or ascertained beneficiaries.
When assessing the above, the Court concluded that these steps were insufficient to support the issuance of a Benjamin Order:
“It would be premature at this point in the proceeding for the court to declare, by way of a Benjamin Order, that any potential heir of the Estate, who would take on an intestacy, has predeceased the Deceased. In my view, there remain many unanswered questions respecting the Deceased’s next of kin and rightful heirs to the Estate. This is not surprising given that there has been no proper tracing of the Deceased’s genealogy. For example, reasonable efforts will need to be made to ascertain whether the Deceased’s son William died leaving issue who survived him; whether the Deceased’s father survived the Deceased; who the Deceased’s aunts and uncles are and whether any of them survived the Deceased; and who the children of the Deceased’s aunts and uncles are and whether any of them survived the Deceased. This information, to the extent it can be found, will be of great assistance in determining the rightful heirs of the Estate.” (at para 74, emphasis added)
In summary, the Estate Trustee did not discharge her duty to ascertain the heirs. While Stoyan may not rock-the-boat as far as the law on unascertained beneficiaries goes, it certainly reiterates the importance of exhaustive searches for unascertained beneficiaries and the obligations on estate trustees to pursue to them.
—
[1] Re Short Estate, (1941) 1 W.W.R. 593 (B.C.S.C.).
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