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). 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.

Frequently Asked Questions

What is a missing beneficiary?

A missing beneficiary is someone who is known to be entitled to a share of the estate but cannot be located by the personal representative despite reasonable efforts.

What is an unknown beneficiary?

An unknown beneficiary is someone who may have a legal entitlement to the estate but is not currently identified or known to the personal representative.

Why is it important to identify all beneficiaries?

Personal representatives have a legal duty to ensure all entitled beneficiaries receive their share. Failure to do so could result in personal liability and claims against them.

What steps should be taken to locate a missing beneficiary?

Reasonable steps include contacting family and friends, placing advertisements, issuing notices in The Gazette, and instructing genealogists or investigators.

Can an estate be distributed if a beneficiary cannot be found?

Not immediately. Personal representatives should explore options such as applying to the court, obtaining indemnities, or taking out missing beneficiary insurance before proceeding.

Examples

Example A

The missing child

An executor is administering an estate where the Will names two children as beneficiaries. One child has been estranged from the family for years and cannot be located. The executor must pause distribution and take reasonable steps to trace them, such as contacting known associates or hiring a genealogist, before proceeding.

Example B

Estate distributed too early

A personal representative distributes the estate quickly without placing statutory notices. Months later, a previously unknown beneficiary emerges and brings a claim, leaving the personal representative exposed to financial risk.