As defined under section 25(a) of the Administration of Estates Act 1925, Personal Representatives (PR) are ‘under a duty to collect and get in the real and personal estate of the deceased and administer it according to law’.

A PR is required to locate the beneficiaries of the deceased’s estate and distribute accordingly. Therefore, if a beneficiary cannot be located, it is the PR’s responsibility to take reasonable steps to search for them. If a PR fails to take reasonable steps in searching for a missing beneficiary, it can result in the PR becoming personally liable to a claim.

If a beneficiary cannot be located, there are several steps that a PR can take to assist: –

  • Placing Notices in the local newspaper – This can be a simple and cost-effective way to assist in locating a beneficiary.
  • Instructing a Genealogy Firm – A Genealogy Firm can be instructed to locate missing beneficiaries. This is particularly useful where the Deceased has died without a Will and the relatives need to be located.
  • Tracing agents – Tracing agents can assist in locating a beneficiary.

Although the above steps can be taken to assist in locating a missing beneficiary, they will not relieve the PR of personal liability. To mitigate and potentially avoid personal liability, the following options are available: –

  • Obtain missing beneficiary insurance– This can be obtained from a specialist insurer. The estate can then be distributed accordingly between the known beneficiaries. If the missing beneficiary subsequently appears, the insurance will cover their entitlement.
  • Obtain an Indemnity from the beneficiaries– In this scenario, the estate can be distributed to the beneficiaries. If the missing beneficiary subsequently emerged, the other beneficiaries would pay the missing beneficiary. However, if the other beneficiaries are unable or unwilling to pay, the liability is ultimately still on the PR.
  • Apply to the Court for a Benjamin Order– This is an order that the PR’s may distribute the estate on the footing that certain events have or have not happened. A Benjamin Order is generally used when it is believed that the missing beneficiary is no longer alive.
  • A reserve fund can be kept to pay the missing beneficiaries’ share if they emerge within the 12-year limitation period. This option is likely to be used only for smaller estates and results in the PR’s duties continuing for several years whilst the funds are held.

The above options should be considered by the PR’s and legal advice should be taken to assist in selecting the right option.  It is essential that the facts of the estate are considered, including the value and risk of a potential claim.

Legal advice can help provide sufficient protection against what could be an extremely costly claim if the estate was distributed without consideration. Contact a member of our Wills, Trusts & Probate Team today.