Missing And Unknown Beneficiaries
When administering an estate, personal representatives are under a duty to administer the deceased’s estate and implement the provisions of either the deceased’s will or the Rules of Intestacy (i.e. the statutory rules which detail who is entitled to inherit an estate if there is no valid will).
When administering an estate, personal representatives are under a duty to administer the deceased’s estate and implement the provisions of either the deceased’s will or the Rules of Intestacy (i.e. the statutory rules which detail who is entitled to inherit an estate if there is no valid will). Under the will and/or rules of intestacy, the personal representatives are responsible for identifying all beneficiaries within the class entitled to inherit.
If a personal representative fails in their duty, they may become personally liable to either the beneficiaries and/or the estate.
Duty of a personal representative
A failure in a personal representative’s duty to administer the estate may arise in relation to either missing or unknown beneficiaries. This is problematic for personal representatives because a missing or unknown beneficiary may claim against the personal representative for distributing (i.e. finalising) the estate without including them in the distribution.
Examples of how this can arise include unknown children of a deceased or, with regard to an estate passing under the rules of intestacy with little close family, where wide family classes are to be considered and located.
There are measures that personal representatives can take to provide themselves with protection against claims from either missing or unknown beneficiaries.
Locating a missing beneficiary
If a personal representative is aware of a beneficiary but cannot locate them, the personal representative should initially refrain from distributing the estate. To distribute without including the missing beneficiary would be a breach of the personal representative’s duty to the estate. If there is, therefore, a known but missing beneficiary of an estate, the personal representatives should make all reasonable enquiries to ascertain the location of the beneficiary. This includes submitting newspaper advertisements, placing notices in The Gazette, searching with family members and friends, instructing a genealogist to trace the missing beneficiary, or instructing a private investigator. The enquiries made must be reasonable in respect of cost to the estate.
If reasonable enquiries have been made and the missing beneficiary still cannot be located, to avoid further delay in distributing the balance of the estate, the personal representative can make an application to the court for either directions and/or leave to distribute the estate or to pay the money into court. When considering court intervention, the costs and timeframe of doing so must be justified in terms of the estate.
Alternatively, the personal representatives can proceed to distribute after obtaining personal indemnities from the other beneficiaries. Whilst this allows the estate to proceed to distribution, there is a risk that, should the personal indemnity need to be called upon, the beneficiary(s) who gave it are now either insolvent, untraceable, or are simply unwilling to meet the costs.
The personal representative may also be able obtain missing beneficiary insurance. Should a claim arise, the insurance would provide the funds to settle the same. This may be difficult to obtain in respect of larger estates.
Identifying unknown beneficiaries
In respect of unknown beneficiaries, the personal representatives must make full enquiries as to any additional beneficiaries of an estate. This can be achieved by the submission of statutory notices, which provide public notice of the intention to distribute the estate after the required time period has passed (two months) and requests that anyone who may have an interest in the estate make their claim. If an unknown beneficiary does not come forward and the two-month time period has elapsed, the personal representative is protected from any claim from the unknown beneficiary. If the personal representative was aware of a potential claim – the above does not provide protection. There are also additional searches that can be submitted, for example Land Registry registered and unregistered searches.
It is important that written records are kept of all enquiries made and/or steps taken to either locate or identify any missing or unknown beneficiaries.
Here to assist you
If you’ve been tasked with tracking down missing or unknown beneficiaries of a will in your position as personal representative, Kew can help you.
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