What happens if a beneficiary cannot be found?

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 or unclear 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.

The best way to avoid missing beneficiaries is to ensure that your Will is 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 also best practice to name 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.

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 research from Tower Street Finance, 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 trace a missing beneficiary

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, including:

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.

We have dealt with cases where the family has assumed certain people are the only individuals due to inherit, but upon further investigation, there were entitled family members who hadn’t been identified. Watch our short video below to learn how Kings Court Trust helped with a complicated intestacy:

In this case, the seemingly simple estate would only have been split between three children if not for our family tree research. If left unidentified, the four nephews/nieces and two great-nephews/nieces could have come forward as missing beneficiaries to make a claim on the estate post-distribution. Kings Court Trust’s detailed family tree reconstruction helped to distribute the estate correctly and protected the three children from later contentious claims.

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 missing individual’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 after distribution.

Acquiring insurance mitigates the risk of someone coming forward with a claim against the estate after it has been distributed – the Personal Representative (the umbrella term for an Executor or Administrator) is personally liable to claims and misdistribution.

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 and, in many cases, can relieve the Personal Representative of the legal and financial responsibility.

What happens if a beneficiary of an estate is deceased?

In some cases, the beneficiary of a Will may have passed away before the Testator (the person who created the Will) or before they received their inheritance. Gift clauses may be included in the Will. For example, “I leave __ to my husband during his lifetime and on his death, my brother”. This is a good way of structuring a Will, as it helps ensure that portions of the estate don’t pass to the wrong person if the original beneficiary is no longer alive. If there are gift clauses, the portion of the estate that was due to the original beneficiary will go to the next individual named.

If the beneficiary died before the Testator, their gift will generally fail. Therefore, the money will remain in the Testator’s residuary estate and be redistributed. If the beneficiary dies after the Testator and does not receive the inheritance beforehand, the sum will be passed to their estate. This will form part of the final amount to be distributed to their own beneficiaries.

However, some Wills contain a survivorship clause, usually stating that beneficiaries must survive the deceased by 28 days to receive their inheritance. The rules of intestacy include a similar clause that a spouse or civil partner must survive the deceased by 28 days to inherit.

Missing beneficiary case study

Kings Court Trust are experts in probate and estate administration and can help locate missing beneficiaries.

In one case, we needed to locate a beneficiary who had lost contact with our client's family. It was believed that he moved to a village in Spain, but this was the extent of the family’s knowledge. Our local researcher visited the village that he was supposedly living in and after questioning residents and local authorities, came across his surprising home. Watch the video to learn how and where we located this heir:

If you have any questions about probate, estate administration, or locating missing beneficiaries, get free guidance and advice from our friendly Client Services Team by calling 0300 303 900.