Jeff de-Rhune, a solicitor who manages the probate insurance account at the Zurich Conveyancing Underwriting Centre, considers the risks that PRs and their advisers have to manage and looks at some insurance solutions which can help.
Personal Representatives are under a duty to collect, gather in and administer according to the law, all the real and personal estate of their deceased. In many cases, this may be a straightforward exercise. The chances are however, that readers will have been professionally involved in at least one estate where the sailing has not always been smooth.
First things first: is the estate testate or intestate? If there’s a Will, are the PRs sure it’s the deceased’s last Will? If the estate seems intestate, but friends and/or relatives claim that a Will does exist but its whereabouts is unknown - what to do? A Missing Will Indemnity may resolve the problem: executors can prove any existing Will or the next of kin can extract letters of administration. If a Will (or later Will) turns up after the event, the “old” PRs and beneficiaries will be indemnified accordingly.
So, once we know whether we’re proceeding per the terms of a Will or as on intestacy, what about collecting, gathering in and administering? A typical estate will own at least a few stocks and shares and these will need valuing and, usually, selling. It’s not so unusual for share certificates to go missing. This can be time consuming to deal with as registrars will usually request an indemnity from PRs. Rather than give such an indemnity and take on the personal liability themselves, Zurich Insurance plc (“Zurich”) can sign the Lost Share Certificate Indemnity on behalf of the PRs. Where the PRs sign the indemnity, the insurer can provide a counter indemnity in favour of the PRs to protect them from personal liability.
Similar considerations apply with regard to life assurance policy documents. Sums assured are usually at least in the tens of thousands of pounds, if not greater. As with share certificates, should the policy documents go astray, life offices will often request an indemnity before paying out. PRs can obtain a Lost Life Policy Indemnity which will indemnify the life office for any loss incurred as a result of paying out the proceeds of the life policy. Where the life office requires an indemnity form to be signed, Zurich can sign the form on behalf of the PRs, or where the PRs sign the indemnity, the insurer can provide a counter indemnity in favour of the PRs, to protect them from personal liability.
Moving on to the distribution of the estate, do the PRs know who, and where, all the beneficiaries are? Once all reasonable steps taken to locate missing heirs have drawn a blank, a Missing Beneficiary Indemnity could help. Cover is available where there are known beneficiaries who can’t be found, or where a genealogist’s report indicates there are no known missing heirs but cover is required for peace of mind prior to distribution. Automatic increases in cover can be incorporated to protect against claims for interest on a beneficiary’s entitlement and as with the Missing Will Indemnity, the policy can indemnify PRs and overpaid beneficiaries in the event of a claim.
Zurich can also provide bespoke solutions for other problems that you may encounter and cover can be offered to fit the particular circumstances of a case, no matter how unusual. So it’s worth remembering that insurance may be the solution to even the most difficult of problems that you encounter.
Zurich is the preferred insurance provider of Title Research. Jeff de-Rhune underwrites and manages the trust and probate insurance account at the Zurich Conveyancing Underwriting Centre. You can reach him on tel: 020 7256 3838 or email: jdr@zcuc.co.uk