Do 40%* of family trees miss out entitled beneficiaries?

Updated on 21 July 2011

Jonathan Verrill, Case Manager, Title Research

In the 2011 edition of the Law Society Probate Practitioners Handbook, Professor Lesley King writes: 'PRs have an obligation to distribute to those entitled and will incur personal liability if they omit someone.' She states that '...PRs should be very cautious about accepting an assurance from one part of a family that 'X died without children'. It is necessary to check or risk distributing assets wrongly.'

Professor King's assertion is borne out by our own recent experience at Title Research where we were asked by a legal firm client to check the accuracy of information supplied by family members about the extent of their family when unknown beneficiaries came to light after partial distribution of the estate. The discovery of these new beneficiaries prompted a wider audit of the client’s case load. Alarmingly, for 40%* of the cases we were asked to check, we found omissions or mistakes in the family tree information provided. Perhaps of greater concern for our client, the firm had been appointed as Personal Representative for these cases and furthermore statutory declarations had been signed by family members confirming the information supplied about their family tree was correct.

Whilst at first sight this statistic may seem surprising, the complexity of family relationships can often mean family members simply do not know of each others existence, either because they have become estranged or the extent of their family tree has become lost or unknown in the mists of time.

Case study*

One of our clients was administering an intestate estate on behalf of the Deceased’s brother, Mr Smith.

Mr Smith had supplied our client with a family tree, signing a statutory declaration to confirm that the information he supplied was correct. In Mr Smith’s family tree, the Deceased was shown to have had six siblings with one of the siblings, Maria*, having predeceased without issue.

Since our client had extracted a Power of Attorney Grant under their name, they would be liable for future claims that could emerge at a later date.

Our further research identified that the Deceased in fact had eight siblings with the additional two still alive. We also found that the Deceased’s sister, Maria, who Mr Smith had identified as being deceased without issue, actually had two children both of whom were still alive and therefore entitled to her share of the estate.

*names have been changed

Benign or malicious?

Clearly, there can be various factors that influence the accuracy of information supplied about the extent of family members. In some cases this might be down to innocent mistakes, but unfortunately, in other cases financial gain may be the motive.

I suspect that many of us whose parents came from large families or those who have a large number of siblings, potentially spread across the country or around the world, would struggle to name all of their 1st cousins once removed. Could we name the first wife of an uncle and their children and grandchildren? In many cases probably not, yet these relatives could be entitled to a share of an estate under the rules of intestacy.

The other scenario we often encounter is printed family trees provided by a relative with a keen interest in amateur genealogy. This scenario has become increasingly prevalent with the growing interest in genealogy in recent years. Whilst these family trees can provide a useful starting point for a probate practitioner who wants a rough idea of how the estate will be distributed on intestacy, our experience has shown that amateur genealogical research must be professionally checked to protect the PR from future claims. More often than not, innocent mistakes creep into the tree due to misunderstandings about how to systematically search the records or how to spot gaps which suggest further research is required.

Potential risks

Some of the most common errors or misconceptions we come across during the course of checking family trees or claims for entitlement include:

• previous marriages being missed out and therefore half blood issue of those marriages being overlooked.
• individuals of the same surname being identified as relatives, when in fact they turn out to be unrelated.
• an assumption that blood related children adopted out of a family are entitled to a share of the estate when in fact the distribution laws exclude adopted out children, in most cases.
• uncles and aunts of the Deceased being missed out because of the passage of time (many will have been born during the early part of the 20th century) or a belief that an uncle an aunt died without issue, when our searches reveal otherwise.
• siblings believing that their nieces/nephews are not entitled to a share of the estate because the previously entitled parent of the nieces/nephews has died.

Solutions

So what are some of the options for protecting the PR against incorrect distribution given the prevalence of such errors and omissions in family tree information?

Professor Lesley King states in the Probate Practitioners Handbook that personal indemnities taken from known beneficiaries are of doubtful value from a risk management point of view (see Chapter 16). Certainly, unknown beneficiaries who come forward at a later date to make a claim, might argue that the PR had acted negligently by not carrying out professional searches or verification, given the technological resources and skills available to a PR by engaging a professional genealogist.

On the same basis, it is clear from the example given above, that relying on a Statutory Declaration carries a similar risk.

Another option would be to take out missing beneficiary indemnity insurance. Only a limited number of insurance companies offer this protection, but the usual condition they apply is that professional genealogists have verified family tree information provided by relatives and attempted to trace any missing beneficiaries.

Perhaps the most effective solution in these circumstances is to ask a professional genealogist to check the family tree information. A professional opinion can be given to identify any potential gaps or inaccuracies in the family tree provided, that may require further investigation. Alternatively, a full verification of the existing family tree can be carried out, allowing the PR to obtain Missing Beneficiary Indemnity Insurance.

Title Research can provide you with a low cost opinion within 48 hours on the family tree provided by relatives or friends of the Deceased. For peace of mind, this opinion will identify any potential gaps or inaccuracies in the family tree provided that may require further investigation.

We provide a number of risk management services to help ensure estate funds are distributed correctly. For further information about our services for Family Tree Verification, Distribution Schedules and Bankruptcy Searches for overseas beneficiaries, please click here or Get In Touch.

The 2011 Probate Practitioners Handbook (6th edition, Law Society) is now available from the Law Society Online bookshop.

* Correct as of 21 July 2011