Safety net

STEP’s briefing note ‘Personal Representatives (PRs) and Trustees: Genealogists Fees’ that was issued in July brought home once again the risks to PRs and trustees associated with distributing an estate, which ultimately may mean personal liability to the true beneficiaries should the estate be distributed incorrectly.

Benjamin orders have long been used as a way for PRs to protect themselves from such claims. These are named after Re Benjamin, in which the court ordered the PRs to distribute the deceased’s property on the basis that one of the beneficiaries had died. The result of the order was that, had the beneficiary been found alive, the PRs would have been protected from being sued.

Remote control

In Re Green’s Will Trust, the court emphasised that the Re Benjamin order does not “vary or destroy a beneficial interest. It merely enables trust property to be distributed in accordance with the practical probabilities.” The value of the order is therefore two-fold: on one hand, to protect trustees; on the other, to preserve the right to follow the property, should the beneficiary reappear at some later stage.

All this for a way to distribute an estate to current beneficiaries, based on the remote possibility of another person either becoming entitled on a trust, or of a lost heir coming forward. However, the time and cost necessary to put together such an application sometimes seems prohibitive and may often outweigh the share the errant beneficiary is ultimately meant to inherit.

The Scottish Law Commission’s discussion paper on trustees and trust administration suggests that: “In many cases, especially where the sums were relatively modest, insurance… or undertakings from the recipients to repay would be sufficient.”

Missing beneficiary indemnity insurance should only really be considered following extensive research (and not only to cover the situation when research is no longer economically viable) and reputable insurance companies will require an in-depth report detailing which avenues have been investigated. Realistically, this will involve some indication that a professional has looked into the matter. Even at an hourly rate, solicitors’ fees far outweigh a professional genealogist’s. Genealogists also have years of knowledge and experience in finding unknown or missing beneficiaries, which means that ?it is not in the interests of the estate for the solicitor to be attempting research. ?A quick search for the obvious birth ?or death certificates should of course ?be undertaken; however, any more ?than that and the solicitor ought to consider seriously appointing a professional opinion.

Professional opinion

As every solicitor will recognise in ?the lead up to the introduction of ?ABS, there is no substitute for the ?service of a professional. What may ?be a simple search to a genealogist ?might take hours for someone else; likewise, probate researchers are contacted on a daily basis by requests for help with private enquiries which have hit a wall. Similarly, a relatively straightforward search might completely remove the need for missing beneficiary insurance if you know what you are looking for, and this is the whole point of appointing a knowledgeable professional.

Why incur the added expense of missing beneficiary insurance or even a Re Benjamin order before asking the professional opinion of a genealogist, whose report will ultimately most probably be required anyway? Save the estate money and yourself time (allowing you to spend it on other work), but most importantly have the peace of mind that you have made your best endeavours to find who you’re looking for.

Should you suspect that there may be missing heirs or stems on a family tree given to you by the deceased’s family or friends, any reputable probate researcher ought to review it for free as part of their initial assessment; rumours of some firms charging an inexcusable £150 have certainly taken the industry by surprise… n

 

Kasia Oberc is a relationship manager at Fraser & Fraser. Find who you’re looking for; email legal@lostkin.co.uk or call 020 7832 1430