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When someone dies leaving a will, the deceased’s executors can follow a simple set of procedures in order to fulfil their legal obligations and ensure that all the named beneficiaries have received their inheritance. With an intestacy, however, things are often much more uncertain. In this article Philip Turvey provides an overview of the various ways in which personal representatives can guard against risk.


Philip TurveyWhen someone dies without leaving a will, their estate cannot be distributed unless one of their relatives takes the role of personal representative or PR.

The PR is responsible for dealing with the administration of the estate of the person who has died, making sure that:

  • all the assets (such as a house, money or shares) are collected in,
  • the estate pays all debts, taxes and estate administration expenses,
  • what is left is distributed to all those who are entitled to a share of the estate.

Often a PR will appoint a solicitor to administer the estate on their behalf. Nevertheless, they remain personally responsible.

In cases of intestacy, the PR’s most problematic legal obligation is the need to ensure that all the entitled beneficiaries are located.

The case managers at Anglia Research are experts in their field, and they take all realistic steps to identify and find every entitled beneficiary. However, sometimes a relative cannot be found, or there may be illegitimate children that the family are not aware of, or debts may come to light after the estate is distributed.

Situations such as these sometimes arise and they may lead to claims being made on the estate long after it has been distributed.

However, there are various steps that PRs can take to protect themselves, and other beneficiaries, against future claims. This article provides a general outline of the options available. Remember that we will always give our clients specific advice tailored to their family’s circumstances, so that they can assess the particular risks involved and compare the costs of all the appropriate options.

Advertising in line with Section 27 of the Trustee Act 1925

A bundle of newspapersA PR can gain protection from claims from possible creditors and missing beneficiaries by placing a Section 27 notice in the London Gazette and in appropriate local newspapers. If no replies are received, after two months the PR may distribute the estate.

Advertising in line with Section 27 provides PRs with a defence against any claim that they did not know about at the time of distributing the estate. However, it is important to remember the following points.

  • While a Section 27 notice will usually protect the PR from liability in their role as personal representative, it does not prevent beneficiaries or creditors who have been overlooked from later claiming a refund of their share of the estate from the other beneficiaries, including the PR as a beneficiary of the estate.
  • In cases where a beneficiary is known to exist, but cannot be traced, a Section 27 notice provides no protection at all.

Applying to the court for a directions order

The Royal Courts of JusticeThe PR can make a formal application to the court, showing the steps that have been taken to identify and find entitled beneficiaries. If the court agrees that all reasonable steps have been taken, it can make an order allowing the estate to be distributed.

However, it is important to remember the following points.

  • Getting a directions order is normally a costly exercise and, in most cases, it is not the most practical solution.
  • While a directions order protects the PR from liability in their role as personal representative, it does not prevent beneficiaries who have been overlooked from later claiming their share of the estate from all the other beneficiaries, including the PR as a beneficiary of the estate.

Both of the options described above have their drawbacks. As a result, we often advise PRs to take out specialist indemnity insurance. There are a number of very different insurance policies available. Let’s look at the protection that they offer.

Unknown creditor indemnity insurance

Unknown creditor indemnity insurance replaces and extends the protection against creditors provided by a Section 27 notice.

  • This type of insurance is properly known as “No Section 27 Trustee Act (unknown creditor) indemnity insurance”.
  • Like a Section 27 notice, it protects the PR against claims made by creditors who may later come forward.
  • The advantage of unknown creditor indemnity insurance is that any claims from creditors who have been overlooked will be met by the insurance cover.

Missing beneficiary indemnity insurance

Missing beneficiary indemnity insurance replaces and extends the protection against missing beneficiaries provided by a Section 27 notice. It is also usually cheaper and faster to take out this type of insurance than it is to apply to the court for a directions order. The estate pays a one-off premium and both PR and beneficiaries are protected, allowing the estate to be distributed with confidence and without delay.

  • Specific risk cover is suited to cases where, despite thorough research, some uncertainty remains about the existence of surviving heirs. For example, the person who died may have had an uncle who went abroad and neither he, nor any of his possible offspring, can be found.
  • General risk cover, or ‘comfort cover’, is suited to cases where all the entitled beneficiaries appear to have been found, but there is still a small risk of untraced illegitimate children or mistakes in the historical record leading to a future claim against the estate.

Missing will insurance

Last will and testamentWhenever someone seems to have died without leaving a will, there is always a small risk that, despite appearances to the contrary, a valid will does exist.

If a will does turn up after an estate has been distributed, beneficiaries may have to return their inheritance. To guard against the upset and disruption this would cause, we usually recommend that a specialist search is carried out to find a lost will.

However, it is important to remember that in the UK wills do not have to be registered. This means that when a search reveals nothing, it is generally still a good idea to take out missing will indemnity insurance. The estate pays a one-off premium and beneficiaries can rest assured that, if a valid will is found after the estate has been distributed, they will not have to repay any of the money they have received.

  • We can carry out insurer-approved will searches and enquiries, and then follow through to arrange an appropriate insurance policy.

For more specific advice, tailored to your individual circumstance, please contact us.


Useful reading: Insurance.


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