Applicable Legislative Provisions
Estate Administration Act, R.S.B.C. 1996, c. 22
67.1 (1) This section applies only if
(a) the deceased died testate leaving a specific bequest of real or personal property to a beneficiary, and
(b) the will does not expressly exclude the operation of this section.
(2) If the personal representative, after making all reasonable efforts, is unable to locate the beneficiary within one year of the date of the grant of letters probate or administration with will annexed, the personal representative may sell the real or personal property, deduct any costs related to the storage, transportation and sale of the property and hold the net proceeds in trust.
(3) Section 27.1 of the Public Guardian and Trustee Act applies to net proceeds under subsection (2) that are held in trust by the Public Guardian and Trustee and are not claimed by a beneficiary within the applicable period prescribed under that Act.
(4) If net proceeds under subsection (2) are held in trust by a personal representative other than the Public Guardian and Trustee, the personal representative must promptly pay the proceeds into court after deducting the costs of doing so.
(5) If a beneficiary under an estate described in subsection (1) has been located and notified of a specific bequest but neglects or refuses to make arrangements to take delivery of the property within 6 months of the notification, the personal representative may sell the real or personal property, deduct any costs related to the storage, transportation and sale of the property and send the net proceeds to the beneficiary.
(6) If a beneficiary described in subsection (5) does not accept the net proceeds, the personal representative must hold the net proceeds in trust and subsection (3) or (4) applies.
(7) This section does not prevent an application by a personal representative to the court under section 39 of the Trustee Act or under section 3 of the Survivorship and Presumption of Death Act.
The provision seems to require that the monies be paid into Court, rather than allowing them to be distributed to other beneficiaries. However, this section does not appear to apply if the gift of a share of the residue of an estate is not a specific bequest.
Wills Act, R.S.B.C. 1996, c. 489
21. Unless a contrary intention appears by the will, property or an interest in it that is comprised or intended to be comprised in a devise or bequest that fails or becomes void because of the death of the devisee or donee in the lifetime of the testator, or because the devise or bequest is contrary to law or otherwise incapable of taking effect, is included in the residuary devise or bequest, if any, contained in the will.
This section does not apply if the gift vested at the time of the Testator’s death. In that case, the gift is not incapable of “taking effect”, but is simply incapable of being distributed. There is also case law which states that this provision does not apply to residuary gifts, only specific bequests.
Section 39 of the Trustee Act stipulates as follows:
39 (1) A trustee, executor or administrator may, without commencing any other proceeding, apply by petition to the court for an order that
(a) the trustee, executor or administrator be at liberty to distribute the proceeds of the estate he or she is administering among the parties entitled to them, having regard only to the claims of the persons the trustee, executor or administrator has been able to ascertain to be entitled and whose residence or address he or she has been able to find out, and
(b) the trustee, executor or administrator is not be liable for the proceeds of the estate or assets, or any part of them, so distributed to persons of whose claim and residence or address the trustee did not have notice at the time of the distribution.
(2) On an application made under subsection (1), the court may give directions with regard to the time for distribution and the notice that must be given to bring the fact of distribution to the notice of persons who may possibly be interested in the distribution.
(3) This section does not prejudice the right of any creditor or claimant to follow the proceeds of the trust estate or assets, as the case may be, or any part of them, into the hands of the person or persons who may have received them.
There are no cases regarding missing beneficiaries which consider the above provision. Therefore, it is unknown whether this section could be relied upon in support of an application to distribute a missing beneficiary’s share of residue to the remaining residuary beneficiaries (as opposed to paying the share into Court).
The Case Law
The cases all seems to suggest that the appropriate manner in which to deal with the share of missing beneficiary is to pay it into Court, whether the gift is a specific bequest or share of the residue of the estate. In Re Bennett, 2002 SKQB 162, the Court ordered that the residuary shares of two beneficiaries who could not be located were to be paid into Court, because: a) it would not be cost efficient to continue searching for them and b) there was no evidence to support a presumption of death of either of them. However, the Court did not state what was to happen to the money once it was paid into Court.
In Re Rendall Estate 2003 BCCA 225, the testatrix left one third of her property to Bernice Marjorie Simpson’s children who survived her. However, the whereabouts of the children could not be ascertained. The lower court ruled that the administrator be at liberty to apply for an order that the share of the estate which would have been payable to the children of Bernice Marjorie Simpson be divided into two equal shares and distributed among the other beneficiaries. In overruling the lower court’s judgment , the Court of Appeal made the following comments:
Being unable to locate does not entitle the beneficiaries, the next of kin of equal rank, to just scoop the lot. Any suggestion of that kind is quite outrageous. It would have been necessary to show that they were dead, these other children. If it could neither be shown whether they were dead or alive the money would have had to be held and, if they were not proven to have predeceased the testatrix, the money would have to go to the Crown…
I do not want it to be thought that I think that the next of kin, who were known at the time, were up to no good. But I would not wish in any other estate those who are charged with administering an estate to think that if you do not find somebody with equal right it follows that you can have the lot. It does not follow.
Southin J.A. did not explain why the money would have to go to the Crown and there appear to be no decisions that have either affirmed or overruled the above BC Court of Appeal judgment. However, Southin J.A.’s conclusion is consistent with the manner in which specific bequests are dealt with under s. 67 of the Estate Administration Act (which clearly requires an Executor to pay a specific bequest to a missing beneficiary into Court, although it does also contemplate an application being made under s. 39).
Another option would be to apply to the Court for an Order that the missing beneficiary be presumed dead. This would allow the executor to distribute the missing beneficiary’s share to his/her personal representative. Section 3 of the Survivorship and Presumption of Death Act, R.S.B.C.1996, c.444 (“SPDA”) provides that:
3 (1) If, on the application of an interested person under the Rules of Court, the court is satisfied that
(a) a person has been absent and not heard of or from by the applicant, or to the knowledge of the applicant by any other person, since a day named,
(b) the applicant has no reason to believe that the person is living, and
(c) reasonable grounds exist for supposing that the person is dead,
the court may make an order declaring that the person is presumed to be dead for all purposes, or for those purposes only as are specified in the order.
(2) An order made under subsection (1) must state the date on which the person is presumed to have died.
(3) Any interested person may, with leave of the court, apply to the court for an order to vary, amend, confirm or revoke an order made under subsection (1).
(4) An order, or a certified copy of an order, declaring that a person is presumed to be dead for all purposes or for the purposes specified in the order, is proof of death in all matters requiring proof of death for those purposes.
(5) The registrar of the court must forward to the chief executive officer under the Vital Statistics Act an order made under subsection (1) or (3) within 30 days of the entry of the order.
The common law presumes death if a person is not heard of or from for seven years. Otherwise, a person applying for a declaration under the SPDA must meet a fairly onerous burden of showing on a balance of probabilities that in fact the person is dead (and may even need to prove on a balance of probabilities how death took place). In Re Burgess, 2004 BCSC 62, the missing person had not been seen in the 22 months preceding the hearing. He was a family man who was greatly missed by his two children. The missing person had a historical association with the Hells Angels Motorcycle Club. Based on confidential information received, the police informed the wife of the missing person that the Hells Angels had killed her husband. The court accepted that evidence and concluded that the “dark side” of the missing person’s life had “caught up with him and the only reasonable inference is that his life has been ended by ‘person unknown'”. The court concluded on a balance of probabilities that the missing person died by misadventure.
In Re Cyr, 2006 BCSC 1523, the Court confirmed that under the SPDA, the applicant was required “to show on the balance of probabilities that the death took place as she alleges” (at 189). The Court ultimately found that while there was a reasonable basis for believing that the person was dead, there was also some basis for concluding that he had chosen to disappear. Therefore, the Court was unable to find on a balance of probabilities that the person was dead.