Robert Lindley and Wesley O’Brien (Conyers): Missing Beneficiaries: The Importance of making well documented inquiries (November 16, 2021)

Robert Lindley and Wesley O’Brien, of Conyers, has made available for download their article, “Missing Beneficiaries: The Importance of making well documented inquiries,” published in JDSUPRA. The abstract is as follows:

Trusts exist for the benefit of their beneficiaries and it is to beneficiaries whom trustees owe their duties. Whether the beneficiaries have a fixed interest or not, trustees owe their duties to the beneficiaries as a whole and trustees are therefore placed in a challenging predicament when beneficiaries cannot be located. While it sounds highly unusual, it is not altogether uncommon for executors of deceased estates and even for professional trustees to find themselves administering a trust or estate, but unable to distribute to one or more of the primary beneficiaries, because such person cannot be located or is unwilling to communicate with the trustee, meaning that the trustee cannot obtain a valid receipt and discharge.

It goes without saying that a trustee is not relieved of its duties simply because of difficulties finding, or communicating with, one or more of the beneficiaries of a trust. However, this means that trustees face complicated questions as to how best to discharge their duties when a trust cannot be administered and distributed in the manner envisioned by its governing documents and/or its settlor. Where a beneficiary subsequently comes out of the woodwork or has a change of heart, the manner in which the trustee has administered the trust in the intervening period could well come under the microscope and the trustee may be vulnerable to a breach of trust claim.

However, as is illustrated in the case law, ‘[trustees] should not be discouraged from seeking practical solutions to difficult administration problems’ (Re Evans; Evans v Westcombe [1999]).

Click here to view Robert Lindley and Wesley O’Brien’s summary of “Missing Beneficiaries: The Importance of making well documented inquiries”

Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal

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