After someone’s death, their personal representatives are responsible for winding up their estate and distributing the estate’s assets to the beneficiaries. These are the individuals named in the deceased’s Will or, if the deceased did not leave a valid Will, those entitled to inherit under the Rules of Intestacy.
The personal representatives will be either the executors named in the Will, or, if there is no Will, administrators. Administrators are usually one or more of those entitled to inherit under the Rules of Intestacy.
If executors or administrators fail to find all the beneficiaries who are entitled to inherit, they can be held personally liable for any loss. This means that if you distribute all of the estate to other beneficiaries, you might have to pay a missing beneficiary yourself, if the beneficiary subsequently comes forward to claim their inheritance.
It is therefore essential that all beneficiaries are located or, where this is not possible, steps are taken to protect the estate’s executors or administrators.
Summary
This article includes:
- What Is a Missing Beneficiary?
- Executor Duties When a Beneficiary Is Missing
- How to Find Missing Beneficiaries
- How Long Should Executors Search for a Missing Beneficiary?
- Statutory Time Limits Executors Should Be Aware Of
- What If a Missing Beneficiary Cannot Be Found?
- Missing Beneficiary Insurance and Executor Protection
- What Happens If a Beneficiary Appears Later?
- Common Mistakes Executors Make
What Is a Missing Beneficiary?
A missing beneficiary may be someone who is named in a Will, or someone who is known to exist and is entitled to inherit under the Rules of Intestacy, but who cannot be located. Alternatively, it may be the case that no-one knows how many beneficiaries exist. For example, if a Will leaves money ‘to my grandchildren’, it might not be possible to find out how many grandchildren there are.
Similarly, with the Rules of Intestacy, an estate passes to relatives in a strict order of priority. Where there is no spouse, child, or closer relative, cousins or more distant relatives might be entitled to inherit, and the estate’s administrators will need to try to identify and locate them all.
Executor Duties When a Beneficiary Is Missing
Executors or administrators must make ‘reasonable efforts’ to identify and locate all beneficiaries.
Other duties include acting in the best interests of the estate at all times, avoiding unnecessary delays, and keeping accurate records. This means that personal representatives should be proactive in their search for beneficiaries to ensure that the estate administration is not unduly held up, and the beneficiaries who are known are able to receive their legacies.
How to Find Missing Beneficiaries
Making ‘reasonable efforts’ to identify and locate beneficiaries means that you must make a range of investigations. What is reasonable will depend partly on the size of the legacy, and executors are not required to search indefinitely.
Actions required of the executors or administrators are:
- Initial searches
- Public and online searches
- Using professional search services
Initial Searches
The first step is to look through the deceased’s papers and to speak to their family members and friends. Those who were closest to the deceased can often provide the most useful information and leads.
Public and Online Searches
Social media and online accounts should be checked, as well as looking for beneficiaries who have been identified but not located on the electoral roll and other online records.
Executors or administrators may place public advertisements in the press to help protect their position. These should go in the Gazette, which is an official journal of record for the UK, and in local newspapers where the deceased lived, formerly lived, or where missing beneficiaries may be based.
By placing an advertisement that meets the requirements of Section 27 of the Trustee Act 1925, a personal representative is likely to have some protection against a future claim from an unknown beneficiary.
Using Professional Search Services
Professional search services exist for tracing missing beneficiaries who are unknown or who cannot be located. It is essential to use a reputable service, as many disreputable firms exist. A probate solicitor will be able to suggest an acceptable option.
By engaging a professional search firm, you will be able to demonstrate that you have taken the reasonable steps required to locate beneficiaries.
How Long Should Executors Search for a Missing Beneficiary?
There is no statutory time limit for searching for a missing beneficiary. Again, the personal representatives’ actions must be reasonable, which will be looked at in light of issues such as the value of the legacy, the likelihood that a search will be successful, the number of beneficiaries, and the leads or information available.
If you are an executor or administrator, you will have to balance the search with the need to wind up the deceased’s affairs and distribute the estate. To avoid future difficulties, we strongly advise you to speak to an experienced probate solicitor, who will be able to advise on whether sufficient steps have been taken to reduce liability.
Statutory Time Limits Executors Should Be Aware Of
Under Section 22 of the Limitation Act 1980, beneficiaries have twelve years from the date on which their right to the legacy arose in which to claim an inheritance owed to them. They can claim interest on the money for up to six years.
Where no other beneficiaries have been identified, and the estate becomes bona vacantia, or without an heir, and is transferred to the Bona Vacantia Division of the government’s legal department, it may be possible for beneficiaries to claim for up to thirty years after the death.
For the first six months after the Grant of Probate or Grant of Letters of Administration is issued, a claim can be made against the estate by someone who was not named in the Will or who did not inherit anything under the Rules of Intestacy, or those who feel they did not inherit enough.
This type of claim, made under the Inheritance (Provision for Family and Dependants) Act 1975, allows the following individuals to make a claim:
- The deceased’s spouse or civil partner
- A former spouse or civil partner
- A cohabiting partner who lived with the deceased for at least two years immediately prior to their death
- A child of the deceased
- Someone the deceased treated as a child of the family
- Someone the deceased was supporting financially at the time of their death
If a spouse or civil partner makes a successful claim, they will be entitled to a sum similar to that which they would have received on divorce. Other individuals would be entitled to ‘reasonable financial provision.’
Generally, executors and administrators should aim to finalise the winding-up of an estate within one year; however, there is scope to take longer when complications arise, and there is no set deadline for carrying out or ending searches and investigations.
What If a Missing Beneficiary Cannot Be Found?
Searches for missing beneficiaries will generally take place at the same time as the executors or administrators are dealing with the estate administration.
Once the personal representatives are ready to distribute the estate, they need to take action to protect their position if the beneficiaries have still not been identified or located.
A probate solicitor will be able to advise on the best option, and it is strongly recommended that funds are not distributed until professional advice has been taken.
Missing Beneficiary Indemnity Insurance
This provides insurance cover that will pay out in the event that a beneficiary makes themselves known in the future. It is not always possible to find an insurer prepared to offer a policy, and it will depend on the circumstances of the case.
A Benjamin Order
This is a court order that states that it is assumed the beneficiary is dead or that they have disclaimed their interest in the estate, and it allows the personal representatives to distribute the estate to the other beneficiaries. This option is generally used if indemnity insurance cannot be obtained.
Asking the Beneficiaries to Sign an Indemnity
The beneficiaries can agree to return funds should a beneficiary come forward, however this is not generally recommended. If they do not have the funds available when the time comes, the personal representative will remain liable.
Putting Money into a Reserve Account
Money can be held in an account for the twelve-year period. This can be an option if a specified sum is left to a beneficiary. However, it is harder if the Will leaves a share of the residual estate to ‘grandchildren’, and no-one knows how many missing beneficiaries there may be. In this case, beneficiaries who are identified are unlikely to be prepared to wait.
Payment into Court
Paying money to the Court Funds Office can be an option of last resort. The personal representatives will need to provide a witness statement setting out the work they have carried out to try to identify the beneficiary.
Missing Beneficiary Insurance and Executor Protection
Some insurance companies offer missing beneficiary insurance that aims to protect executors and administrators from personal liability should a beneficiary come forward in the future. It allows an estate to be wound up and funds distributed to the known beneficiaries.
It is not always available, as insurers will not offer cover when they feel the case is high risk, for example, where a beneficiary is known to exist, and there is recent evidence that they are alive. They will need evidence of the attempts made to trace the beneficiary before assessing whether cover will be offered.
What Happens If a Beneficiary Appears Later?
A beneficiary is entitled to their share of the estate and can claim for up to twelve years after their right arose.
The claim could be paid from funds put aside in a reserve account, from a claim on an insurance policy, from money returned by other beneficiaries, or by making a claim against the executors or administrators.
Common Mistakes Executors Make
When there is a risk that a beneficiary is unknown or missing, executors or administrators are strongly advised to speak to a solicitor to ensure that their position is protected as far as possible.
Errors can result in personal liability, and the situation is likely to be both expensive and stressful.
Common mistakes made by executors or administrators include:
- Distributing the estate too early and without considering the risk of a beneficiary coming forward in the future
- Not making all reasonable attempts to identify and locate beneficiaries
- Not keeping comprehensive records showing what efforts have been made to identify and locate beneficiaries
- Assuming that a beneficiary who has not come forward is waiving their claim to their inheritance
- Not taking professional advice before finalising the estate administration
- Not protecting their position before distributing the estate funds
Contact Our Probate Solicitors
If you are dealing with an estate administration, and you are unsure of whether all beneficiaries have been identified, or you cannot locate a missing beneficiary, we will be happy to advise you.
For more information on dealing with Wills and inheritance, see our wills, trusts and probate page.
To speak to one of our probate solicitors, ring us on 0300 303 2071, email us at info@witansolicitors.co.uk or fill in our contact form, and we will talk through your situation with you and discuss how we can assist. We have offices in Birmingham, Northampton, London and Wellingborough.
FAQs
Can Executors Distribute the Estate If a Beneficiary Is Missing?
While executors can distribute an estate if a beneficiary is missing, they should not do so without protecting their position. This includes making all reasonable attempts to find the beneficiary and putting safeguards such as insurance or a court order in place before distributing the estate.
How Long Should Executors Wait Before Distributing an Estate If a Beneficiary Is Missing?
The estate should not be distributed until comprehensive enquiries have been made, press advertisements run, with a notice period of at least two months and one day, and adequate protection put in place.
Do Beneficiaries Lose Their Inheritance If They Do Not Come Forward?
Beneficiaries do not automatically lose their inheritance if they do not come forward promptly. While they have up to twelve years to claim, it may be harder to obtain the money if they do not come forward early on, as they may have to make a personal claim against the estate’s executors or administrators, which, in the worst-case scenario, could involve a court case.
What Happens If a Beneficiary Is Overseas?
If a beneficiary is overseas, the same attempts to contact them need to be made. The executors or administrators should take professional advice in respect of legal and tax laws, to ensure their actions are compliant. It will also be essential to ensure that funds are transferred safely to the beneficiary and that a receipt is obtained.
