If you are appointed as the Executor of an Estate under a Will, or are the next of kin and appointed as the Administrator of someone who has not left a Will (called Intestacy), you have a duty as the Personal Representative to make sure that all funds are distributed to the correct people.
This can create problems if you do not know of the whereabouts of all the beneficiaries, especially if the family has lost touch and cannot be traced.
It’s important to understand that if a beneficiary due money from an Estate is not paid, as the Personal Representative, you may be liable to repay them from your own funds. To help protect yourself against any possible claims, you need to ensure that you have taken all of the necessary steps before distributing the Estate monies.
What to Do if a Beneficiary is Missing
If a beneficiary cannot be found, the first step is to make enquiries with the deceased’s friends and relatives to try and find out where the beneficiary might be. You should also take out advertisements in a newspaper close to their last known residence (known as S27 notices). S27 Notices give any potential creditor or beneficiary two months in which to make a claim. Whilst not a complete bar to claims, they do afford some protection to the Personal Representatives. It may also be worth instructing a genealogist company to help locate the missing beneficiary on the Estate’s behalf.
If this fails, there are a number of options available:
- Keep a reserve fund equal to the amount the missing beneficiary is due to receive. This is so should the missing beneficiary ever get in contact he/she can be paid their share in the future. This can often be the most practical solution for smaller Estates and will mean the payments to the other beneficiaries are not held up.
- Distribute the funds to the known beneficiaries, and obtain indemnities from each of them confirming that should the missing beneficiary ever come forward you will (in theory) be able to recoup the money from them. You will need to be very careful if you choose to do this – the beneficiaries could have spent all of their inheritance by the time a claim is made, and be unable to pay you back.
- Distribute the Estate and take out an insurance policy, which will pay out if the missing beneficiary is traced. If you instruct Co-op Probate to deal with the administration of the Estate using our Probate Complete Service, we can arrange this through our specialist provider.
- Apply for a Court Order known as a Benjamin Order. A Benjamin Order allows a Personal Representative to distribute the Estate in accordance with the terms of the Order. The Court will make the Order on the presumption that the missing beneficiary has died. If the beneficiary comes forward later on, he/she can still try to claim their share of the Estate from the other beneficiaries, but the Personal Representatives are protected by the Benjamin Order. This is, however, a very expensive and time-consuming process.
Whatever you choose to do, it’s very important to take specialist advice to ensure that you, as Personal Representative, are protected and that you do not become personally liable.
With our Probate Complete Service we take full responsibility for getting the Grant of Probate and dealing with the Legal, Tax (excluding VAT), Property and Estate Administration affairs.