A Benjamin order is an order made by the court for the distribution of assets on death when it is uncertain whether or not a beneficiary is alive. The order authorises the personal representatives of the deceased to distribute the property on the basis that the beneficiary is dead (or on some other basis). The purpose of the order is so that the personal representatives are protected from being sued if the beneficiary is in fact alive and entitled. Where this is the case the beneficiary can still trace the trust property . The name derives from the 1902 Chancery case Re Benjamin.
A more recent consideration arose in an application in respect of two settlements known respectively as the A Trust and the B Trust (the Trusts).
The Trusts were established by Mr and Mrs H as settlors when they were living in Guernsey. The settlors have four children (the siblings).
The B Trust, which is a discretionary trust, was established on 11th December, 1996, and is governed by the law of Guernsey. The beneficiaries are settlors’ children and remoter issue o together with their spouses.
The A Trust was established on 12th December, 1996, and is governed by Jersey law. The settlors were the life tenants. Following the death of the survivor, there are discretionary trusts. These were initially in favour of charities generally but following the death of the last surviving settlor , the siblings were added as beneficiaries.
In 2012 the Royal Court of Jersdey approved the trustee’s decision to add the settlors’ remoter issue as beneficiaries of A Trust (In the matter of A Trust). Accordingly, the beneficiaries of the Trusts are now the same except that that the spouses of the siblings and remoter issue of the settlors are not beneficiaries of the A Trust.
During the course of the application to widen the class of beneficiaries of the A Trust referred to above, the siblings raised the possibility that some of the assets of the A Trust were not validly settled due to Mr H’s lack of mental capacity. Penelope Reed QC provided an opinion that concluded that, on balance, a court would be inclined to find that Mr H did have the necessary capacity to settle the assets into the Trusts.
As the siblings did not waive their claims, the trustee sought a declaration that all of the assets in the Trusts had been properly settled.
Counsel was appointed for the minor and unborn beneficiaries.
The proceedings have not been heard due to repeated stays of the proceedings in the hope that the matter could be settled by mediation or otherwise.
A proposed settlement provides that the sum of £7.5m inclusive of costs would be paid by the Trusts to the estates of the settlors. However, there was no agreement as to how the figure would be divided as between the Trusts or how much would go to each estate.
It has since been agreed in a draft settlement agreement that the sum of £7.5m will be paid as to £5m from the A Trust and £2.5m from the B Trust. The assets of the A Trust comfortably exceed £5m, and those of the B Trust comfortably exceed £2.5m.
This is the background to an application seeking an order that the main proceedings be adjourned sine die and that until further order:-
(i) save that the trustee of the A Trust will at all times retain within the trust fund a minimum of £5 million in cash or investments that in normal market conditions can be sold within a month, the trustee of the A Trust shall be entitled to administer the assets of the A Trust as if free of claims; and
(ii) save that until further order the trustees of the B Trust will at all times retain within the trust fund a minimum of £2.5 million in cash or investments that in normal market conditions can be sold within a month, the trustees of the B Trust shall be entitled to administer the assets of the B Trust as if free of claims.
These two orders have been referred to as Benjamin orders. The effect of the orders is to ring fence the sums of £5m and £2.5m, which are expected to be payable pursuant to the settlement agreement, but leaves the trustees otherwise to be free to deal with and administer the assets of both Trusts in the ordinary way without regard to the existence of the claims brought pursuant to the Particulars of Claim.
The background to Benjamin orders is set out at  and  as follows:
16. A Benjamin order enables trustees to administer a trust on a particular assumed factual basis in circumstances where there is a possibility that the true factual basis is different. The relevant jurisprudence is conveniently summarised in the judgment of David Richards J in Re M F Global UK Limited (in special administration)  EWHC 1655 (Ch) at paras 26 – 30 as follows:-
17. David Richards J then went on to cite from the 18th edition of Lewin on Trusts at para 27.34. The equivalent passage is now to be found in the 19th edition in the following terms:-
Benjamin orders originally provided a jurisdiction to enable a trustee to proceed on the basis of a specific factual assumption in connection with the existence (or otherwise) of a beneficiary (a Benjamin order) but has been expanded to permit trustees to make distributions even when there is a claim against the trust assets. As David Richards J said at  in M F Global “the purpose of the court’s inherent jurisdiction is to enable practical effect to be given to a trust”. The making of such an order does not however destroy any claim. It merely means that, if successful, the claimant will have no personal remedy against the trustees and will have to recover from any beneficiary to whom the trust property has been distributed.
The orders were made with the respect to the Trusts, notwithstanding the departure from the premise of a Benjamin order being made in circumstances where it is impossible or impracticable to ascertain a fact (e.g. whether a beneficiary is alive or dead) or where a claim to the trust assets has been threatened but not proceeded with.
The orders were granted to allow the continued operation of the Trusts without having to await the outcome of the proceedings so that it can be ascertained which assets belong to the Trusts and which assets belong to the estates.
It was noted that had the application been contested, it would not likely have been made.
- In the matter of the A and B Trusts 13-Nov-2019
- Re Benjamin  1 Ch 723
- In the matter of A Trust  JRC 066