What happens when a beneficiary entitled to funds from an estate cannot be located? Is it ok to distribute funds without them or, does a personal representative (PR) need to keep hold of these funds and if so, for how long?
In the first instance a PR must demonstrate they have made reasonable enquiries in trying to locate the beneficiary. A reasonable enquiry includes: –
- Advertising in a newspaper circulating in the area where the beneficiary was last known and/or advertising in the Law Society Gazette (there is a fee for this service)
- Contacting the General Register Office (GRO) and searching the records of births, marriages and deaths (there is a fee for this service)
- Employing commercial genealogists or title research agents who specialise in tracing missing beneficiaries (there is a fee for this service)
- Employing a private investigator (there is a fee for this service)
Once PRs have made reasonable enquiries and, have failed to establish the location of the known beneficiary, they have 4 options available to them:
Distribute the deceased’s estate to the known beneficiaries and take an indemnity from them whereby they agree to reimburse the PRs if the missing beneficiary is later traced. This is not a good option from the PRs’ perspective as there is no guarantee that the indemnifying beneficiaries will have sufficient funds to meet a future claim.
Apply to court for a Benjamin order approving the distribution of the estate on a particular basis. This protects the PRs (but not those who receive the assets) from personal liability for claims by the missing beneficiary, if they are ever traced.
Before considering option 2, the PRs should consider whether they can protect themselves by taking out an insurance policy. This is likely to be cheaper option than option 2 above. An insurance policy can also protect the overpaid beneficiaries as well as the PRs against future claims.
A PR can pay the missing beneficiary’s entitlement into court. Payment is made to the High Court where the funds are £30,000 or more, and otherwise to the county court.
For more help or information please contact our Wills, Trusts and Probate team on 0161 926 9969 or email firstname.lastname@example.org