Benjamin Order and Other Matters
1. Introduction
An executor or administrator can apply for a Benjamin Order that will permit him to distribute the estate as if a named beneficiary or intestate heir has predeceased the testator or intestate. The name derives from an older English case, Re Benjamin,[1] in which the court made such an order. It is a very convenient and useful device to complete the administration of an estate when it is more likely than not that the beneficiary or intestate heir died before the testator or intestate. However, the court will require the applicant to make a thorough search for the missing beneficiary. The issue is discussed in Durand v Hamilton.[2] The case also discusses issues of capacity and undue influence.
2. Facts
Zsolt and Helen Molnar were married to each other. Each made a will. Zsolt died first and left all his estate to Helen. Although the reasons do not make it clear initially, it would seem that both appointed the Applicant, Alan Durand, their executor. Alan was their son-in-law, who married their only child, Jean. She predeceased both of her parents. Helen’s will left her estate as to 75% to her two grandchildren, the children of Alan and Jean, and as to 25% to Kata Kovacs (‘Kata’),[3] Zsolt’s older sister who, if still alive, would be in her mid 90s. In fact the reasons are unclear at the outset in that later it appears that Helen left the 25% to Kata, or to her children, or both.
Zsolt owned two TFSAs when he died. In 2019 he had obtained a line of credit secured on the matrimonial home that he and Helen owned jointly, without informing Helen. He used funds from the LoC to purchase the TFSAs from CIBC and signed beneficiary designation forms leaving the proceeds to various charities with which he had little or no connection.
In 2021 Alan brought a motion before Justice Cameron, who made an order declaring that Zsolt’s and Helen’s 2013 wills were valid, and that any subsequent wills purportedly made by them were invalid because both parties then lacked capacity, or in in Zsolt’s case because he lacked capacity or was subject to undue influence. She made the order after hearing evidence from a former housecleaner for the two deceased, whom her Honour found to have unduly influenced the parties into signing wills and the designation of the TFSA beneficiaries, and to having tried to purchase Zsolt and Helen’s house below market value. The matrimonial home was sold after Zsolt’s death, and the LoC was paid off using the proceeds from the sale. The balance is being held in trust for Helen’s Estate.
Alan then brought a motion for: (1) a Benjamin Order permitting him to distribute Helen’s estate as if Kata (and/or her issue?) had predeceased Helen; and (2) a declaration that the TFSA’s and the beneficiary designations are invalid. None of the beneficiaries named in the designations appeared on the hearing.
It appears that Kata lives in Hungary if still alive.
3. Analysis and Judgment
Justice Antoniani reviewed Alan’s evidence to the effect that the TFSA’s were out of character for Zsolt because he spoke little English, was unfamiliar with banking and technology, and needed help from Jean and Alan for his affairs. She concluded that Zsolt was in breach of the Family Law Act[4] by encumbering the matrimonial home without Helen’s consent. And she found that, on a balance of probabilities Zsolt lacked capacity or was under the housekeeper’s undue influence when he obtained the LoC and used the proceeds to purchase the TFSAs. Accordingly, she declared that the TSFAs and the beneficiary designations were invalid and that the accounts formed part of Zsolt’s estate.
However, her Honour adjourned the application for a Benjamin Order sine die. She considered, rightly, that
. . . the court is to consider all the circumstances, including what steps have been taken to find the beneficiary (ies), who conducted the inquiries, whether the inquiries have considered possible location of the beneficiary and whether further avenues of search are available. All of this is to be considered against the cost of making continued inquiries and the likelihood that they will succeed.
She found that Alan had little knowledge of Kata. Zsolt had become estranged from his sister when some of his letters to her were returned. At the request of Zsolt, Alan had then made some efforts to locate Kata and her issue, online and through social media, but without success. Her Honour noted that the amount of money held for Kata was substantial and held that in the circumstances the efforts to locate Kata were inadequate and that Alan needed to make greater efforts. Those included making inquiries of any living relatives of Zsolt, and of the solicitor who prepared Zsolt’s and Helen’s wills, and providing information of what newspapers or other media in Hungary will publish notices to unknown beneficiaries, and evidence that he has caused such notices to be published.[5]
Her Honour also appointed Alan executor of Helen’s Estate and directed that Alan’s costs of this Application be paid out of the Estates of Zsolt and Helen, and that the funds held for Kata or her issue be held pending the return of the motion and further direction of the court regarding the distribution of those funds.
—
[1] [1902] 1 Ch 723.
[2] 2024 ONSC 2914.
[3] The spelling of the sister’s name is unclear. The reasons name her ‘Kata’ initially, but ‘Kava’ later on.
[4] RSO 1990, c F.3.
[5] For other Benjamin Order cases, see, e.g., Kapousouzian Estate v Spiak, 2014 ONSC 2355, “Untraceable Beneficiaries in Estate Administration.” http://welpartners.com/blog/2016/12/untraceable-beneficiaries-in-estate-administration/; and Steele v Smith, 2018 ONSC 4601, “Benjamin Orders Redux”. http://welpartners.com/blog/2018/08/benjamin-orders-redux/. See also Oosterhoff on Wills. 9th ed by Albert H Oosterhoff, C David Freedman, Mitchell McInnes, and Adam Parachin (Toronto: Thomson Reuters, 2021) §§3.3.1 and 13.3.2(m), in which we discuss Benjamin Orders. For a sample Benjamin Order see Edgar A. Frechette and Allan P. Seckel, British Columbia – Estate Administration, BC-EAdmin Prec 179, Form 43. (See B.C. Reg. 221/90, App. A, Form 43.)
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Written by: Albert Oosterhoff
Posted on: December 13, 2024
Categories: Commentary, Estate Litigation, Estate Trustees
1. Introduction
An executor or administrator can apply for a Benjamin Order that will permit him to distribute the estate as if a named beneficiary or intestate heir has predeceased the testator or intestate. The name derives from an older English case, Re Benjamin,[1] in which the court made such an order. It is a very convenient and useful device to complete the administration of an estate when it is more likely than not that the beneficiary or intestate heir died before the testator or intestate. However, the court will require the applicant to make a thorough search for the missing beneficiary. The issue is discussed in Durand v Hamilton.[2] The case also discusses issues of capacity and undue influence.
2. Facts
Zsolt and Helen Molnar were married to each other. Each made a will. Zsolt died first and left all his estate to Helen. Although the reasons do not make it clear initially, it would seem that both appointed the Applicant, Alan Durand, their executor. Alan was their son-in-law, who married their only child, Jean. She predeceased both of her parents. Helen’s will left her estate as to 75% to her two grandchildren, the children of Alan and Jean, and as to 25% to Kata Kovacs (‘Kata’),[3] Zsolt’s older sister who, if still alive, would be in her mid 90s. In fact the reasons are unclear at the outset in that later it appears that Helen left the 25% to Kata, or to her children, or both.
Zsolt owned two TFSAs when he died. In 2019 he had obtained a line of credit secured on the matrimonial home that he and Helen owned jointly, without informing Helen. He used funds from the LoC to purchase the TFSAs from CIBC and signed beneficiary designation forms leaving the proceeds to various charities with which he had little or no connection.
In 2021 Alan brought a motion before Justice Cameron, who made an order declaring that Zsolt’s and Helen’s 2013 wills were valid, and that any subsequent wills purportedly made by them were invalid because both parties then lacked capacity, or in in Zsolt’s case because he lacked capacity or was subject to undue influence. She made the order after hearing evidence from a former housecleaner for the two deceased, whom her Honour found to have unduly influenced the parties into signing wills and the designation of the TFSA beneficiaries, and to having tried to purchase Zsolt and Helen’s house below market value. The matrimonial home was sold after Zsolt’s death, and the LoC was paid off using the proceeds from the sale. The balance is being held in trust for Helen’s Estate.
Alan then brought a motion for: (1) a Benjamin Order permitting him to distribute Helen’s estate as if Kata (and/or her issue?) had predeceased Helen; and (2) a declaration that the TFSA’s and the beneficiary designations are invalid. None of the beneficiaries named in the designations appeared on the hearing.
It appears that Kata lives in Hungary if still alive.
3. Analysis and Judgment
Justice Antoniani reviewed Alan’s evidence to the effect that the TFSA’s were out of character for Zsolt because he spoke little English, was unfamiliar with banking and technology, and needed help from Jean and Alan for his affairs. She concluded that Zsolt was in breach of the Family Law Act[4] by encumbering the matrimonial home without Helen’s consent. And she found that, on a balance of probabilities Zsolt lacked capacity or was under the housekeeper’s undue influence when he obtained the LoC and used the proceeds to purchase the TFSAs. Accordingly, she declared that the TSFAs and the beneficiary designations were invalid and that the accounts formed part of Zsolt’s estate.
However, her Honour adjourned the application for a Benjamin Order sine die. She considered, rightly, that
. . . the court is to consider all the circumstances, including what steps have been taken to find the beneficiary (ies), who conducted the inquiries, whether the inquiries have considered possible location of the beneficiary and whether further avenues of search are available. All of this is to be considered against the cost of making continued inquiries and the likelihood that they will succeed.
She found that Alan had little knowledge of Kata. Zsolt had become estranged from his sister when some of his letters to her were returned. At the request of Zsolt, Alan had then made some efforts to locate Kata and her issue, online and through social media, but without success. Her Honour noted that the amount of money held for Kata was substantial and held that in the circumstances the efforts to locate Kata were inadequate and that Alan needed to make greater efforts. Those included making inquiries of any living relatives of Zsolt, and of the solicitor who prepared Zsolt’s and Helen’s wills, and providing information of what newspapers or other media in Hungary will publish notices to unknown beneficiaries, and evidence that he has caused such notices to be published.[5]
Her Honour also appointed Alan executor of Helen’s Estate and directed that Alan’s costs of this Application be paid out of the Estates of Zsolt and Helen, and that the funds held for Kata or her issue be held pending the return of the motion and further direction of the court regarding the distribution of those funds.
—
[1] [1902] 1 Ch 723.
[2] 2024 ONSC 2914.
[3] The spelling of the sister’s name is unclear. The reasons name her ‘Kata’ initially, but ‘Kava’ later on.
[4] RSO 1990, c F.3.
[5] For other Benjamin Order cases, see, e.g., Kapousouzian Estate v Spiak, 2014 ONSC 2355, “Untraceable Beneficiaries in Estate Administration.” http://welpartners.com/blog/2016/12/untraceable-beneficiaries-in-estate-administration/; and Steele v Smith, 2018 ONSC 4601, “Benjamin Orders Redux”. http://welpartners.com/blog/2018/08/benjamin-orders-redux/. See also Oosterhoff on Wills. 9th ed by Albert H Oosterhoff, C David Freedman, Mitchell McInnes, and Adam Parachin (Toronto: Thomson Reuters, 2021) §§3.3.1 and 13.3.2(m), in which we discuss Benjamin Orders. For a sample Benjamin Order see Edgar A. Frechette and Allan P. Seckel, British Columbia – Estate Administration, BC-EAdmin Prec 179, Form 43. (See B.C. Reg. 221/90, App. A, Form 43.)
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