Published on: 14th August 2017

Missing beneficiaries

It is really important to be able to identify the beneficiaries listed in your Will. A gift to a cousin John Smith could cause a nasty problem if you have two cousins called John Smith. A further problem can be caused if John Smith moved away many years ago and his current address is not known.

After you pass, it is the responsibility of your executors to distribute your estate according to your wishes as stated in your Will. This can be difficult in some cases where they may not be able to locate a beneficiary. There are many reasons why a beneficiary may be hard to find: they may have moved since the Will was created and it therefore does not contain their up to date address, or the address may not have not been provided in the Will at all. Initially, the executor(s) could ask your friends and family if they have any up to date contact details for the missing beneficiary. However if that is unsuccessful, then there are a number of things that the executor must consider:

• Setting aside sufficient funds to cover the share of the missing beneficiary. This ensures that the amount is able to be paid should the missing beneficiary come forward within a twelve-year period. This option may be dependent on the amount as it may only be viable for smaller sums and could potentially result in the executor's role lasting for a number of years.
• Obtaining an indemnity from the other beneficiaries. This involves paying the missing beneficiaries sum to the other beneficiaries. The other beneficiaries then sign to say that should the missing beneficiary be located, they will pay back the sum. Executors should note however, that if the other beneficiaries cannot, or will not pay, then they are personally liable to repay the missing beneficiary.
• Alternatively, your executor(s) can take out "indemnity insurance". This ensures that if the missing beneficiary is later located, the insurers will pay out the amount owed to the missing beneficiary.
• The missing beneficiary's share can be paid into the Court under the 1925 Trustee Act where it will be held in trust for the missing beneficiary.
• Executors can also make an application to the Court for a Benjamin Order. This is usually only used when it is a large sum owed to the missing beneficiary as it can be a costly process. If successful, it permits the executor(s) to distribute the estate on the basis of an assumption, for example, the missing beneficiary has passed away. If the missing beneficiary later comes forward, the executor is normally protected from liability although the other beneficiaries may have to repay their additional share to the missing, now found, beneficiary.

Whilst there are numerous ways in which your executors could carry out their legal responsibilities in ensuring they provide for a missing beneficiary, it can be distressing, costly and time consuming. At Casey & Associates, we recommend updating the names and addresses of beneficiaries in your Will as they change. However, we realise that this can be a costly exercise as the years pass by. A good compromise is to create a list containing the date of birth and address for each beneficiary. The list should be stored with but not attached to your Will. The list can be updated as circumstances change. If we are storing the Will we can accept the list and store it with the Will. It might be prudent to then update your Will with a number of changes when you have a three-yearly review meeting. If you believe your Will might need updating, please click here to arrange a visit from one of our Consultants.

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