As an executor or administrator of an estate, your duty extends beyond merely distributing assets; it includes the responsibility to use all reasonable means to locate missing beneficiaries. If the missing beneficiary turned up after you had wrongly distributed their £50,000 inheritance, you could find yourself personally on the hook to the extent of their loss.
‘To fulfil your duties to administer the estate properly, it is imperative to exhaust every possible avenue to find a missing beneficiary,’ says Kathryn Tunbridge, Solicitor. ‘We can guide you through this complex process, ensuring that all reasonable steps are taken and that you are protected from any potential legal repercussions.’
In this article, Kathryn Tunbridge highlights some issues involved in an estate where a beneficiary cannot be located.
While beneficiaries may go missing for a variety of reasons, common scenarios include lack of contact over many years, relocation without providing new contact details, and estrangement from the deceased person.
It is particularly common in cases where there is no will, as the intestacy rules dictate how a deceased person’s estate is distributed. For example, if someone has died without any close family and they did not know their more distant relatives, who would be eligible to receive a share of the estate. These distant relatives may be more difficult to trace, but the duty of the executor or administrator of an estate remains the same.
Legal implications of a missing beneficiary
Executors and administrators have an important duty (sometimes called a fiduciary duty) towards all the beneficiaries of an estate, whether named in a will or entitled under the intestacy rules.
Failing to locate a missing beneficiary can lead to significant legal implications, including personal liability for distributing assets incorrectly. You may be held accountable for any financial loss a missing beneficiary suffers due to an incorrect distribution.
When do you need to locate beneficiaries?
You must make reasonable efforts to locate all beneficiaries as soon as possible. This is so that they can be informed of the terms of the will, what the estate comprises in terms of assets and liabilities and who is dealing with the estate administration. If no attempts to locate beneficiaries are made at the outset, it may leave insufficient time to find them when the estate should ordinarily be finalised.
How can you locate a missing beneficiary?
If no response to any initial communications is received, more thorough attempts to locate the beneficiary need to begin. You have several options, and the choice will depend on the facts of the particular case, the wording of the will (including whether it contains a trust), the circumstances of the other beneficiaries and the likelihood of eventually finding the missing beneficiary.
Some of the options open to you include the following:
- Consulting the will file: if a separate firm prepared the will of the person who died, consider asking for a copy of the will instructions given to the solicitor to see if the person may have left any contact details for the beneficiary. They may also have provided other helpful information, such as how they knew them, where they may have worked or even their social media details.
- Contacting relevant people: if you have established contact with some but not all estate beneficiaries, some of them may be able to help. Alternatively, the deceased person’s friends, family members or former colleagues may have current contact details.
- Social media: it may be appropriate to look for the beneficiary via social media accounts, such as Facebook or LinkedIn, so you can pursue other methods of contact.
- Search public records: electoral registers, birth, marriage, and death records can provide valuable information about what may have happened to the missing beneficiary.
- Using professional tracing services: these services specialise in locating missing people and can be highly effective. This is particularly useful in intestacies, and genealogy companies have many resources at their disposal to find beneficiaries. Some have a worldwide network, which allows the company to establish if, for example, the beneficiary may have emigrated to a different country.
Finalising an estate when a beneficiary is unable to be located
If a beneficiary still cannot be found despite all exhaustive attempts to find them, this may be due to various reasons, such as immigration or a name change. Sound legal advice will ensure that you take all reasonable steps to find a missing beneficiary and can safeguard your personal liability for any financial loss caused by an inaccurate distribution.
Some of the options open to you at this stage include the following:
- Holding funds: you can set aside the entitlement for the missing beneficiary in an executor’s account. If the beneficiary is located in the future, they can claim their inheritance. This can be unsatisfactory because it does not allow the estate to be finalised promptly and can impose long-term obligations on you as an executor or administrator.
- Paying other beneficiaries: alternatively, you can distribute the amount due to the missing beneficiary to the other beneficiaries, subject to a legally binding commitment that if the missing beneficiary emerges later, the other beneficiaries will repay the amount. All beneficiaries (except the missing one) must approve this approach. This can be a risky approach, especially if you have little knowledge as to the financial position of each beneficiary.
- Missing beneficiary insurance: this type of insurance provides coverage for you if a missing beneficiary comes forward after the estate has been distributed. It can cover the financial loss of paying the beneficiary’s share and any legal costs incurred. This can offer peace of mind and financial protection after you have made exhaustive efforts to locate a beneficiary without success.
- The court: for maximum protection, you can seek court intervention. The court may issue a ‘Benjamin Order’, which allows you to distribute the estate assuming the missing beneficiary has died. This court order protects the executor from liability if the beneficiary comes forward later. The downside to this approach is that it can be an expensive exercise.
How we can help
It is important to remember that each case is unique, and legal advice should be sought to determine the best course of action.
Our private client solicitors offer comprehensive support, including sound legal advice, to ensure you fulfil your fiduciary duties and avoid personal liability. We collaborate with expert tracing agents to locate missing beneficiaries efficiently. We can facilitate introductions to those who can advise on missing beneficiary insurance to protect you against potential future claims. We could also apply for a Benjamin Order (or another court order) where appropriate.
By engaging our services, you can confidently fulfil your role as an executor, knowing you have taken all reasonable steps to locate and provide for all estate beneficiaries.
For further information, please contact Solicitor, Kathryn Tunbridge on 01227 274241.
Please note: This article is for general information only and does not constitute legal or professional advice.
