Personal Representatives – Tracing Relatives

20 November 2013

Personal Representatives (PRs) have a duty to distribute an Estate to entitled Beneficiaries. They may be personally liable as failure to do so may amount to a breach of Trust (Re: Diplock [1948] Ch 465).

It becomes difficult for PRs when beneficiaries cannot be traced.

The Trustee Act 1925, S27 offers protection to a PR. A claimant retains their rights to claim from Beneficiaries. S27 Advertisement for Creditors only protects against unknown claimants and offers no protection where the existence of claimants is known but their whereabouts are unknown.

PRs can employ professional genealogists to trace missing Beneficiaries and they can also purchase insurance against the likelihood of missing beneficiaries later coming forward however insurers are likely to require evidence from genealogists that tracing has been attempted before offering their insurance.

Where does the cost of tracing fall?

19th century authority states that the Estate should bear expenses “incidental to the proper performance of duties of Personal Representatives as Personal Representatives”  Sharp v Lush (1879) 10 CHD 468 however a modern Court will not necessarily find that Sharp is the correct case to follow. The just result may be that the costs of ascertaining the Beneficiaries entitled to a distinct asset or a share of the Estate should fall on that asset or share. The safest course is, however, to ask the Court for directions.

In cases of uncertainty the best known order is a Re Benjamin (1902) 1 Ch 723, this will allow the Estate to be administered on the basis that a Beneficiary who cannot be traced has died.

The Court may also order that the known Beneficiaries are entitled to their share of the Estate immediately. The practical effect is that the cost of further investigations falls on those who have yet to be traced!

To help prevent/limit the difficulty of tracing Beneficiaries for the PRs appointed in your Will, it is important that you review your Will every 3 to 4 years to check that the Beneficiaries and PRs are still known to you, they are still capable of acting in the case of PRs and you have contact details especially if they have moved abroad. These details should be kept with your signed Will for safe keeping.