Missing Beneficiary Insurance
Personal representatives may retain a personal liability after distribution of the residuary estate where it has not been possible to ascertain the whereabouts of, or properly identify, certain beneficiaries if no reserve has been made for them out of the estate and it is no longer possible to obtain reimbursement of monies paid to ascertained beneficiaries.
Missing Beneficiary Insurance may be required where:
- a beneficiary has been identified but, despite searches and enquiries, his/her whereabouts cannot be established
- the personal representatives, the family and other beneficiaries believe they have discovered all those entitled to a share in the residuary estate but, due to lack of knowledge of the full extent of the deceased’s family, there remains a possibility that other currently unknown but legally entitled beneficiaries may exist.
There is the potential for many years to pass before missing beneficiaries become aware of their entitlement to all or part of the deceased’s estate.
The practical solution in either circumstance is for a Missing Beneficiary Policy to be taken out so that the missing beneficiary’s share may be distributed to the ascertained beneficiaries and the estate wound up. If that beneficiary comes forward later and claims entitlement to a share of the distributed estate, the personal representatives are protected from any personal liability.
- Upon payment of a one-off premium cover is provided in perpetuity
- Removes the risk to personal representatives of personal liability for claims arising out of the distribution of the estate without having provided for the missing beneficiary’s share
- Allows the estate to be wound up and for the beneficiaries to receive their share or an enhanced share of the estate without having to leave the missing beneficiary’s entitlement in a bank account for a potentially indefinite period
- It is sometimes possible to extend cover to protect the beneficiaries to whom the estate is being distributed
What The Policy Covers
- Any monies which a previously missing beneficiary is entitled to receive from the estate not recoverable from the net estate or the beneficiaries to whom it has been distributed and for which the personal representative would otherwise become personally liable
- Costs incurred with the consent of the insurer in defending any action brought by the claimant against the personal representative
- Any other costs and expenses incurred with the prior consent of the insurer