What is a Missing Beneficiary

When an individual passes away, their estate must be distributed according to the terms of their will or, if no will exists, in accordance with the rules of intestacy.

While this process is usually straightforward, complications arise when one or more beneficiaries are missing or unknown. The absence of a beneficiary can create legal and financial challenges for executors and administrators, who have a duty to ensure that all rightful heirs receive their share of the estate.

In this blog, we explore what constitutes a missing beneficiary, why they can go missing, and the options available when a beneficiary cannot be found.

Understanding Missing Beneficiaries

A missing beneficiary refers to an individual who has been identified as entitled to receive an inheritance but cannot be located. This issue can arise in both testate (where there is a will) and intestate (where there is no will) situations.

Missing beneficiaries are a significant concern because distributing an estate without ensuring all beneficiaries have been accounted for can result in legal consequences and financial liabilities for the executor.

Executors / administrators have a legal responsibility to take reasonable steps to locate missing beneficiaries before distributing an estate.

If a beneficiary is omitted due to negligence or a failure to take adequate precautions, the executor may be held personally liable for their entitlement, even years after the estate has been distributed.

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Why do beneficiaries go missing?

1. Family Estrangement

Family disputes, separations, and breakdowns in relationships often lead to long periods of lost contact. Some beneficiaries may have intentionally distanced themselves from their family, making them difficult to trace. Executors often face difficulty locating estranged family members who may not be aware of their entitlement to an inheritance, or even want to accept this.

1. Invalid or Unclear Will

A Will can be deemed invalid if:

✔ It was not signed or witnessed correctly.

✔ The deceased was coerced into signing it.

✔ The testator (the individual making the will) was not of sound mind at the time.

✔ The will has been altered or contested.

Ambiguous language in a will, such as vague references to beneficiaries (e.g. “to all my grandchildren” instead of listing their names), can make it unclear who the intended recipients are. This can create disputes and delays while attempting to identify and locate the rightful heirs.

1. Instestacy Complications

If an individual dies without a Will, their estate is distributed according to the rules of intestacy. This can result in distant or previously unknown relatives being entitled to inherit. Research by Money & Pensions Service suggests that 56% of UK adults do not have a Will, meaning a significant number of estates must be handled through intestacy laws. Determining the correct beneficiaries under intestacy often requires detailed family tree reconstruction.

1. Outdated Beneficiary Information

A named beneficiary may have been moved to another location, changed their name (e.g., through marriage), or emigrated without leaving updated contact details. Executors / administrators frequently struggle to find heirs due to outdated addresses or lost communication over time.

1. Adoption and Name Changes

Adoptions, name changes, and informed identity changes can complicate efforts to locate a missing beneficiary. Without clear legal records linking an individual’s previous identity to their current name, searches may be unsuccessful.

What happens if a beneficiary cannot be found?

If an executor / administrator has exhausted all reasonable efforts to locate a missing beneficiary, they must take additional measures to protect themselves from future claims. Here are the available options:

1. Taking out Missing Beneficiary Insurance

Specialist Missing Beneficiary Indemnity Insurance provides protection for executors / administrators and beneficiaries. This helps to cover all eventualities, such as unknown or untraced heirs coming forward, including illegitimate descendants or family members who have immigrated to countries with limited records. There are two types of policies:

✔ Known Risk Policy – used when a specific beneficiary is missing but reasonable efforts to locate them have been made.

✔ Comfort Cover Policy – used in intestate cases to protect against unknown heirs making future claims.

1. Holding the Beneficiary’s Share in Reserve Fund

Executors / administrators may hold the missing beneficiary’s inheritance in a reserve fund. If the beneficiary comes forward, their share can be distributed accordingly. However, this approach can prolong estate adminsitration and leave the executor with ongoing responsibilities along with frustrated beneficiaries that have already been identified.

1. Obtaining an Indemnity from the Other Beneficiaries

The remaining beneficiaries can sign an indemnity agreement, agreeing to return the missing beneficiary’s share if they are later located. However, this carries risks, as the executor / administrator remains personally liable if the funds are not recoverable.

1. Applying for a Benjamin Order

A Benjamin Order is a High Court rulin that allows an executor / administrator to distribute an estate based on the assumption that the missing beneficiary is deceased and does not exist. This offers legal protection but can be expensive and time-consuming.

What if a Beneficiary has Died?

If a beneficiary passes away before receiving their inheritance, the outcome depends on the wording of the Will:

✔ If the will contains a gift clause, the inheritance passes to an alternative names individual.

✔ If no such clause exists, the inheritance revers to the residuary estate and is redistributed.

✔ If the deceased beneficiary dies after the testator,their share is passed to their estate.

✔ Intestacy rules apply if no will exists.

Some wills include survivorship clauses, requiring a beneficiary to survive the testator by 28 days to inherit. Intestacy laws also require spouses or civil partners to survive the deceased by 28 days to inherit their share.

Conclusion

Handling missing beneficiaries is one of the most challenging aspects of estate adminsitration. Executors / administrators must take reasonable and documented steps to locate heirs, seek professional assistance when necessary, and ensure they are legally protected before distributing an estate. Missing Beneficiary Insurance, reserve funds, and court applications are all viable options when a beneficiary cannot be found.

For those handling an estate, seeking legal and genealogical advice is crucial to avoiding potential liability and ensuring a smooth navigation of the probate prcoess.

Fraser and Fraser can help

At Fraser and Fraser, we specialise in tracing missing beneficiaries and providing expert probate research services. Whether you’re an executor, administrator, solicitor, or personal representative, our experienced team can help locate beneficiaries efficiently and professionally.

Get in touch today – Call us on 020 7832 1400 or enquire below.

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