Lost trust deed? There is still a solution…

The High Court has issued a judgement on a case concerning a lost trust deed, confirming that a special type of order, known as a "Benjamin order," can be used to authorise executors to distribute funds while protecting them from future liability.

Facts:

This case involves a claim brought by the executors of a deceased woman, Patricia Fassam. They are seeking directions from the High Court on how to distribute a £168,000 trust fund from a life insurance policy. The problem is that the original trust deed, created in 1987, is lost.

The deceased had two sons, Mark and Jason. Mark predeceased her, leaving no children. Jason, now 55, is the sole surviving family member. The executors have located two later trusts, both of which provided for the two sons. Based on this, the executors believe the lost trust was also intended for the children, and they wish to pay the entire fund to Jason.

However, without the original trust deed, they are concerned about the risk of a potential, unknown beneficiary (such as a charity or a distant relative) emerging in the future to claim a share of the funds. They asked the Court to give them permission to distribute the money to Jason, which would also protect them from personal liability.

Decision: 

The Court granted such a Benjamin order, which allows the executors to distribute the £168,000 trust fund to Jason, the sole surviving beneficiary. This order protects the executors from personal liability if any other beneficiary with a legitimate claim were to emerge in the future. The order effectively shifts the risk of a potential claim from the executors to Jason, the recipient of the funds.

The Judge's primary concern was to provide a legal basis for the executors to act without fear of future litigation. By issuing a Benjamin order, the Court gave its approval for the executors to distribute the money to Jason based on a reasonable assumption. This protects them from being sued for misapplying the funds if another beneficiary were to emerge at a later date. The Court concluded that, while it could not be certain of the lost deed's terms, a reasonable inference could be made from the other two trust deeds that the deceased intended to benefit her children.

The Court made it clear that a Benjamin order is not a positive declaration that Jason is the sole beneficiary. The Judge did not want to make a ruling that would legally "shut out" a potential third-party claim. Instead, the order simply permits the executors to distribute the funds on a specific footing.

The Court's decision was also based on practical considerations. The Judge noted that the executors, with their professional resources, had already made extensive efforts to find the lost deed and any other beneficiaries. The Court deemed it unlikely that anyone else would be able to locate new evidence and make a valid claim. The Benjamin order provided a pragmatic solution to a problem with no perfect legal answer, allowing the funds to be distributed rather than remain in legal limbo indefinitely.

Implications:

The main implication of this case is that a Benjamin order provides a practical and protective solution for executors or trustees facing uncertainty over a trust's beneficiaries when the relevant documents are missing. The judgement clarifies the Court's willingness to help fiduciaries fulfil their duties, even in the absence of definitive proof of a trust's terms.

A Benjamin order does not extinguish the rights of any unknown beneficiaries. Instead, it transfers the risk from the fiduciary to the recipient of the funds. The Court emphasised that, if a valid claim were to emerge in the future, the claimant would have to sue the beneficiary (Jason in this instance) to recover the money, and not the executors.