Tracing Beneficiaries

Stephen Rigden
Research Director
Title Research 

(From Issue 7,January 1999)

The article below provides us with a view on the difficulties of tracing beneficiaries and the circumstances when a professional genealogist services are of use.  As someone looking at one specific area of estate and trust administration the author reminds of the practical difficulties and expense that can flow from trying to trace those entitled to benefit

Despite the advances of modern science, to the best of the writer’s knowledge it is still not possible to control one’s financial affairs posthumously! However, in anticipation of and in preparation for death, a will may be written, perhaps setting up a will trust, in an attempt to influence the destination of worldly assets, at least in the immediate future following one’s demise.

Title Research is an expert firm in its specialist field of legal genealogy.  On behalf of our corporate trustee clients (as well as those in the legal and public sectors), we identify and locate missing beneficiaries remembered in wills and the potential heirs at law entitled upon the partial and full intestacies that arise for one reason or another. As a result, we see wills of every cast and hue -. wills beautifully crafted, efficiently thorough, merely indifferent and, it has to be said, occasionally verging on poor. Through our experience and familiarity with the particular “missing person” problems referred to us by our various banking and other clients, we have a perhaps uniquely privileged overview and insight into how these are caused and how perhaps they might be prevented.  Hopefully, even the most ostensibly self-evident of the comments in this article will not be amiss.

The field of will-writing has become increasingly open to competition in recent years. Naturally, solicitors actively promote their services and in recent years the Law Society has run its `Make a Will Week` (for a while featuring the superhero “Will Power”, who seems to have passed away intestate!), although the effectiveness of this campaign is a moot point.  However, `DIY` wills are more and more common following the availability of inexpensive pro forma will-writing packs in stationers.  Latterly, firms of will-writers have been entering the marketplace.  Notwithstand­ing the competition, a trust corporation can offer significant attractions in many instances.  Not least, there is the comfort of feeling that the will would be constructed carefully and that one’s affairs are being entrusted to a secure and relatively perpetual institution.  In addition, a corporate trustee will have significant in-house expertise and resources, particularly to deal with incorporated company and overseas/ offshore assets, stocks and shares etc, which are unlikely to be immediately available to the average high street solicitor.

Where business is received, corporate trustees have an important role to play in ensuring that the testamentary intentions of their late clients are honoured and fulfilled as far as is possible.  This role includes, prior to death, carefully drawing up the will and then reviewing and revising it appropriately and, following death, paying inheritances to the correct beneficiaries and establishing trusts.

A will is written at, and reflects, a particular moment in the life of the customer.  It is, or should be, composed in contemplation of disposing of estate not at some distant futurity but tomorrow should some fatal accident befall the customer once he or she has attested their will.  In most cases, of course, wills are not written on deathbeds; nor does the testator die on lodging the signed will at their bank and stepping back out into the high street. Usually between the will being attested and the death of the testator, a long time passes; and it is a fact of life that over time people tend to lose touch with one another, to move house, to change their names and, ultimately, to die.  As a result, with each passing day every will runs an ever-increasing risk of being overtaken by events, as few nominated beneficiaries are permanently sedentary and none is immortal. A corporate trustee assisting in the preparation of wills can never entirely eliminate this problem but it can help keep them to an absolute minimum. As always, the maxim that prevention is better than cure holds true and the corporate trustee charged with drawing up a will for a customer and being appointed as executor has the opportunity to make its own subsequent job of administering the estate that much easier by careful drafting.

The first and very basic principle is that names alone are seldom sufficient to identify a beneficiary.  To leave one quarter of one’s residue `to Jane Smith` is potentially to leave behind a quandary -. what is there to distinguish the intended beneficiary from other persons of the same or similar name?  At the very least there should be two descriptors -. the relation and current address.  To name the residuary beneficiary as `my niece Jane Smith of 110 Main Road, London N1 3BG` is an immediate improvement.  Even this can be bettered -. for instance, by stating ` Miss Jane Smith of 110 Main Road … daughter of my late brother William Smith` it is possible to differentiate clearly between the true subject and any other niece of the same name (this being a not infrequent necessity in large families and/or where traditional family naming patterns are involved).

Even where there is no blood relation, a non-ambiguous description can be important.  A term such as `sister-in-law` has multiple meanings.  It could refer to the wife of a brother; to the sister of a spouse; or even, when used more loosely, to the sister of a spouse of a sibling or spouse.  There is also no harm in styling other beneficiaries as, for example, `my former neighbours`, `my ex-colleague and dear friend` or `my godchild`.  Sometimes such seemingly insignificant details not only humanise a will but also have assisted in finding the right beneficiary.

Sometimes, it has to be said that the details contained within a Will are woeful. One of Title Research’s most challenging cases in recent years was to find a residuary beneficiary described only as `Joy in Australia`, without any indication as to relationship, surname, age or specific last known address.  Through enquiries of former neighbours of the deceased, we were able to confirm that Joy was a niece.  Thereafter through systematic enquiry and concerted effort we recreated the deceased’s immediate family tree, documented the birth and marriage of Joy and, ultimately, determined her current residence in Western Australia. She was then able to furnish evidence to support our findings that she was the beneficiary sought.

In addition to the testator adequately describing the beneficiaries, it is important to consider all possible eventualities and to cater for them through reasonable substitution provisions in the will.  Title Research is referred many problem cases where no such gift-over has been considered and the residuary beneficiary has predeceased, triggering a partial or even a full intestacy.  It then becomes necessary to account to all the statutory next of kin.  This can present a major problem where there is no close kin and the interested parties are in the class of uncles and aunts and their issue upon the statutory trusts.  An extended investigation may ensue, sometimes leading to 50 or more claimants being discovered.  The uncles and aunts of a person dying at the age of 75 years today would in most cases have been born in, say, the 1880s or 1890s, a period when mean family size was much larger than it is these days.  More than a century has elapsed since, during which time the family has had much opportunity to disperse widely.  Even where there has been no emigration, in our experience it is very unusual to find a family still intact and whose members are all in contact with one another nowadays.

The matter of failed gifts introduces the importance of reviewing a will periodically and revising it as appropriate.  If the aforementioned Jane Smith dies in the lifetime of the testator, it is imperative that the will is looked over, even if only to confirm that adequate provision exists already for this contingency.  If it does not, either the will should be rewritten substantively (should the testator regard the death as calling for a wide-ranging overhaul and reallocation of benefit) or a codicil added to reassign the particular interest (should the testator feel that the death affects only the one residuary or pecuniary legacy in isolation).  Other events in the life of the testator or of his or her beneficiaries should also prompt a review of the will to ensure that it makes adequate provision -. for instance, the testator’s own divorce, the birth of a grandchild or even the beneficiary Miss Smith changing her name by marriage or moving to a new address.

Corporate trustees can thus avoid many later difficulties for themselves as executors by ensuring the use of adequately detailed descriptions of beneficiaries and preparing for various contingencies at the will-drafting stage and by encouraging periodic review of an existing will. The adherence to pre-set quality control standards will assist in the first regard; whilst with the computerisation of client details it has become a relatively straightforward administrative task as well as best practice for a corporate trustee to issue reminders in the manner of dentists and opticians exhorting patients to come in for a check-up!

Class gifts -. to a group of unnamed individuals, such as `my nephews and nieces equally` -. are seldom included in contemporary wills, a development which we would encourage having experienced some of the difficulties they cause!  The most unfortunate case that we have witnessed was one where the residue was left by a testator to his `cousins` without any precise qualifier.  Common sense could suggest that he had meant only his surviving first cousins, as his contemporaries, to benefit.  But what of the children of predeceasing first cousins or, for that matter, the children of surviving first cousins?  Or second cousins? All such persons are cousins and conceivably could make a claim.  In the particular instance in question, the opinion of counsel was sought and, following a substantial investigation, a distribution was made using the intestacy rules as a model. First cousins once removed benefitted under the principle of representation where their parent, the first cousin, had predeceased the deceased but not where their parent survived; and whole blood kin benefited to the exclusion of those of the half blood.

Sad to say, on rare occasions problems arise through simple carelessness.  One will we came across last year -. thankfully composed in the 1960s and clearly not reviewed since -. notoriously announced that the residue was to be divided into 10 equal shares but then proceeded to name only nine residuary beneficiaries!  The remaining one-tenth share defaulted and had to devolve upon intestacy. Once more, there being no close kin, we had to embark upon an extended investigation.

Some problems, of course, are not attributable to the original composition of the will. In many cases, financial considerations impel the corporate trustee as executor into a situation where a view has to be taken on whether to search for a particular missing beneficiary.  For instance, a pecuniary legacy of £100 in a 1965 will may have seemed generous at the time.  However, upon the death of the testator today, the will not having been revised to take into account inflation in the interim, the gift is modest and unfortunately troublesome as, of course, the chances of the intended recipient having removed several times, or having died, are high.  Furthermore, the cost of the research needed to find the person, or to prove their prior death, may be disproportionate to the value of the legacy itself but perhaps not to the overall size of the estate. Executors then have to use their judgement and discretion to reach a sensible decision, balancing their obligation to the missing beneficiary against their duty to the estate as a whole.

Most executors take the view that the legacy itself should suffer no abatement -. i.e. that the beneficiary once found should enjoy the stated £100 without any costs having been deducted.  However, at the same time the majority of executors feel that research costs should not exceed the legacy itself, even in the largest estates.  A point to remember here is that the research required and its cost remain the same irrespective of the sum at stake.  Accordingly, common sense ought to apply.  In other words, it could be appropriate to spend up to £100 if necessary to satisfy a £100 gift, or up to £500 to pay out £500. Contrarily, in most circumstances, it would be neither appropriate nor necessary to expend more than at the very most, say, £2000 trying to satisfy a £10,000 legacy before arriving at the point at which it can be said that all reasonable worthwhile efforts have been made in an endeavour to fulfil the fiduciary duty.

The increased centralisation of the trustee and executorship offices of many trust corporations has been undertaken, partly at least, to achieve efficiencies.  Continuing with this objective in mind, it would seem appropriate for corporate trustee executors to act decisively as soon as it becomes apparent that there is a missing beneficiary problem which cannot be resolved internally and to refer the matter to experts.  Title Research deals almost exclusively with trust and estate matters and, as a specialist, has the necessary detailed contextual knowledge of succession law, a proven systematic approach to problem-solving and an understanding of and ready access to the best resources.  In the first instance, on receipt of relevant details of the problem, a free assessment and estimate is prepared by return, so that an informed decision can be made on what action to take.  There are no obligations entered into at this stage, nor are costs incurred.  Sometimes the recommendation is that no work is attempted because, in our opinion, there are not affordable genuine prospects of success. However, where the matter appears amenable to research and instructions are issued, the trust corporation has the comfort of knowing that the out-sourced task is being dealt with efficiently and expeditiously, freeing them to focus uninterruptedly on other aspects of the estate administration.

Particularly with the increased availability of computer resources over the last decade, even apparently insoluble problems can often be resolved surprisingly swiftly and at modest cost using in-house resources.  Occasionally, a busy general practice solicitor’s office will present us with a case which has suffered not so much neglect as a non-focused approach to a problem which ideally requires specialist attention. When a successful result is returned to the firm within a matter of days, there tends to be amazement as well as gratitude!  The centralisation or regionalisation of the majority of trust corporation executorship and trustee departments seems to have produced a concentration of experience and expertise, with the result that we encounter the problem just described less commonly with corporate trustees.

In conclusion, corporate trustees have much to offer many sectors of society, perhaps with particular reference to `Middle England` and people with more complex affairs involving a mixture of business and private assets.  With their stability, in-house specialist resources and internal (as well as external) governance, it has always surprised us that their share of the trust and probate market is not considerably larger.

©  Stephen Rigden  April 1999

Title Research