It is not uncommon for legal representatives to face some difficulty tracking down the beneficiaries of an estate, especially if the Will was written many years ago. Contact details can be out of date or there are beneficiaries whom you have never met.
If there was no Will or an invalid Will, then the Intestacy Rules apply and there could be distant family members you did not previously know about who are beneficiaries.
While many estates are administered without any obstacles, if beneficiaries cannot be found or someone unexpected comes forward, an executor could find themselves running into difficulties.
‘As the legal representative of someone who has died, you are responsible for ensuring all rightful beneficiaries receive their share’, says Wendy Mustard, Solicitor in the Wills and Probate team with Richard Reed. ‘This can be especially difficult if the beneficiaries are unknown to you, or if there was no will, and yet the same duties still apply.’
A beneficiary can be considered lost or unexpected for a variety of reasons, but it is important that as a personal representative of the deceased you understand your legal duties and responsibilities to those beneficiaries.
A lost beneficiary simply means a beneficiary who cannot be traced. This is more common where there is a Will as the person who died (called the testator) may leave money to a beneficiary who is not known to the personal representative. Alternatively, a beneficiary could have moved away or even changed their name.
It falls to the personal representative to ensure that all beneficiaries receive the shares to which they are entitled, and this means having to take all reasonable steps to trace those beneficiaries who have moved. This could include:
- making your own enquiries with other beneficiaries and family members;
- conducting your own research using social media;
- placing adverts calling for the lost beneficiary to come forward; or
- instructing a tracing agent.
If reasonable steps have not been taken, you could find yourself personally liable to a claim against the estate by a lost beneficiary who later comes forward.
Protecting yourself against lost beneficiaries
If you do find yourself unable to locate a beneficiary, there are steps you can take to protect yourself.
For example, it might be appropriate to simply retain that beneficiary’s share in a designated separate account.
If this is impractical, it may be better to distribute all the estate assets and to obtain insurance which will pay out if the missing beneficiary turns up. Or you could seek indemnities from the remaining beneficiaries, whereby they agree by way of a legally binding document to pay a share of the lost beneficiary’s inheritance if they later turn up. Each beneficiary’s share would be apportioned from the inheritance received by them. However, indemnities can be difficult to enforce depending on the circumstances at the time. For example, a beneficiary may no longer have any funds with which to make payment under the indemnity, which is a risk.
Alternatively, you can apply to the court for authority to distribute the estate as though the lost beneficiary is deceased.
The most suitable option will depend on several factors including your circumstances, as well as those of the lost beneficiary and the estate itself.
You should seek advice on the different types of protection to find out which are available in your case and to make sure the steps you have taken are sufficient.
An unexpected beneficiary is one who turns up when the legal representative was not previously aware of their existence. This is most likely to happen under intestacy or if there is a gift in a Will to a class of people, such as a gift to ‘my children’. In this instance, someone could come forward claiming to be a child of the deceased. Any such claim would have to be properly verified by a genealogist’s report or a DNA test.
In the case of a child, this would most likely happen where there is an illegitimate child of the deceased. Illegitimate children are legally considered children for the purposes of inheritance unless a Will specifically states otherwise. In Brussels, it was recently ruled that Delphine Boël, the illegitimate daughter of former Belgian King Albert II, be granted the title of Princess.
If an unexpected beneficiary turns up who belongs to the class, or who is a rightful heir under intestacy, and you have already distributed the estate you might find yourself personally liable to pay their share.
Protecting yourself against unexpected beneficiaries
A personal representative’s duties and responsibilities are the same to all beneficiaries, even those unknown to them.
If, as a personal representative, you have commissioned a genealogist’s report and made enquiries with the deceased’s family, you would expect to be able to rely on the results of these investigations being accurate.
However, to avoid becoming personally liable to beneficiaries of whom you are unaware, you should publish official notices calling for them to come forward.
The notices should be placed in the London Gazette, as well as a newspaper local to the deceased. There are important rules to adhere to when placing notices, including specific wording, and allowing sufficient time for potential beneficiaries to respond.
You should seek advice to ensure that any notices you place will have the legal effect you desire. Otherwise, you could remain personally liable to any unexpected beneficiaries who come forward after the estate has been distributed.
While not within the category of a lost or an unexpected beneficiary, you might find yourself faced with a disgruntled dependant or family member who has been excluded from the Will. Some such family members and dependants may be entitled to claim for a share of the estate. If a successful claim were made, you could find yourself becoming personally liable if the estate has already been distributed.
Consider appointing an expert solicitor
Acting as a personal representative is a significant responsibility. Obtaining legal advice to properly understand your duties and responsibilities means that you can be confident you have acted appropriately and, if protective measures are necessary, a solicitor can help you ensure that these are effective.
Alternatively, you may wish to instruct a solicitor to handle the administration of the estate. Our Wills and Probate lawyers are familiar with the rules and can ensure they are correctly adhered to on your behalf.