What happens if a beneficiary cannot be found?

From: Kings Court Trust 

When someone passes away, their loved ones and those dealing with their estate are left with a variety of tasks that must be completed before inheritance can be distributed. If the beneficiaries of the deceased’s estate cannot be found, this can cause additional stress and work at a time that is already difficult.

This blog aims to provide an overview of how and why heirs go missing, how this issue can be avoided, and how best to search for these individuals. We’ll also cover what happens if a beneficiary can’t be found after thorough research; there are a number of precautions that can be taken to avoid future disputes.

Why do beneficiaries go missing? A beneficiary may be missing for several reasons, including:

Family estrangement

Relationships can be complicated. A beneficiary may be named in the Will, but the deceased might not have been in close contact with them. If no one close to the deceased knows of this individual’s location, it could be hard to track them down.

An invalid Will

A Will could be deemed invalid if it’s not properly signed/witnessed, the deceased was pressured into signing, the deceased was not of sound mind upon signing, or the contents of the Will have been amended against the wishes of the person it pertains to. This can lead to concerns about the accuracy of the Will and whether it includes all rightful beneficiaries.

Intestacy

When someone dies without a Will, this is known as intestacy. This can lead to missing beneficiaries as the estate will then be distributed according to the rules of intestacy, which can include next of kin who weren’t necessarily close to the deceased. According to Tower Street Finance’s research, 45% of UK adults do not have a will, leaving an average of £290,000 in inheritance to be distributed according to the rules of intestacy.

How to avoid the problem of missing beneficiaries

The best way to avoid the beneficiaries of your Will becoming missing is to ensure that your Will is written, up-to-date, and clear. Your Will should name and provide details for all those who you wish to benefit from your estate. It’s best practice to give specifics on these individuals rather than leave a class gift, such as “to my children” or “to all grandchildren”. This can help avoid confusion about who is and isn’t entitled, as well as reduce the work for the Executor of the Will.

Another way to avoid missing beneficiaries is to include gift clauses in the Will. For example, “I leave __ to my husband during his lifetime and on his death, my brother”. This helps ensure that portions of the estate don’t pass to the wrong person if the original beneficiary is no longer alive.

Steps that can be taken if a beneficiary is believed to be missing

In the event that a beneficiary is missing, there are several ways through which they can be located. For example:

Initially, asking friends and family if they know where the person is/where they were last based
Electoral roll data
Consumer and credit databases
Birth, marriage, death, and adoption records

You may require assistance from a professional genealogist. There are services that can assist you in tracking down a missing beneficiary. 

Family tree reconstruction

A professional will be able to reconstruct a family tree by using the aforementioned search methods. If the missing beneficiaries are a result of intestacy, this could help locate them. It also ensures that the right people are benefiting from the estate and that unentitled people are not.

Will search

If a Will hasn’t been located, beneficiaries may be missing due to lack of information. You may be able to carry out an initial search for the Will yourself, but a professional will have the resources to fully search the deceased’s property, as well as local Will writing/storage facilities. This ensures that if a Will does exist it will be found; distribution can then proceed according to its contents.

What to do if a beneficiary/beneficiaries cannot be located
If all efforts to locate an heir have been unsuccessful, there are several ways that distribution can proceed.

Inheritance held

The missing beneficiary’s share can be held in case they present themselves further down the line. However, this isn’t a great long-term solution, as the file cannot be closed until the individual has been found or has come forward.

Inheritance distributed

The heir’s funds could be distributed amongst the known beneficiaries; they would need to sign an indemnity policy to say that they agree to return this portion of the estate if the individual is later discovered. This is considered somewhat risky, as it could be years before the missing beneficiary appears; the funds may not be available to re-distribute by this time.

Rules of intestacy and family tree reconstruction/verification
As previously mentioned, the estate must be distributed according to the rules of intestacy if there is no Will. In addition to family tree reconstruction, there are family tree verification services should you have a pre-existing family tree that you would like confirmed. Kings Court Trust works closely with expert genealogists who can help reconstruct and/or verify a family tree so that the estate can be safely distributed upon intestacy.

Missing Beneficiary Indemnity Insurance

Insurance can be obtained to protect both the Personal Representative(s) and the beneficiary/beneficiaries of an estate. There are two types of Missing Beneficiary Indemnity Insurance:

Known risk – this is issued when the Executor/Administrator is aware that a beneficiary is missing. If the individual does appear after distribution, this cover shows that all efforts were made to locate and contact the person. 

Comfort cover – often used in intestacies, this ensures that any unknown beneficiary cannot claim on the estate at a later date
Acquiring insurance mitigates the risk of someone coming forward with a claim against the estate after it has been distributed. If family tree reconstruction or verification reports and Will searches have been completed correctly, these can be used to obtain insurance. If generated incorrectly, insurance may be harder to get; working with a professional like Kings Court Trust can help ensure that the process moves forward smoothly.

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