Cost of tracing missing beneficiary

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Cost of tracing missing beneficiary

Post by gardenlaw » Thu Nov 04, 2010 9:11 am

It can sometimes be quite costly to find the beneficiary in a will. They may live in the Outback in Australia or a mountain village in Spain. So who pays? The following is the answer from Nicholas de Poidevin QC

"The rule is that the costs of tracing beneficiaries fall on residue generally, being part of the expenses of administration. They do not fall solely on the share of the untraced beneficiaries. Hence the amount to distribute to the known beneficiaries cannot be fixed until the untraced beneficiaries have been found.

If it is necessary to apply to court for an inquiry, the court has a power to allow a distribution to the known beneficiaries without making any reservation for the subsequent costs of tracing the untraced beneficiaries: see Practice Direction 40A, para. 7. (Presumably the recipients would not be liable to a later claim for a refund to contribute to the costs, though the Practice Direction does not say so.) In that way the costs of tracing the untraced beneficiaries can be made to fall on their share; but the provision applies only once proceedings have been begun and enough work has already been done to establish the difficulty.

For the foregoing, see Lewin on Trusts, 18th ed., paras. 26-22 to 26-24, relying on decisions about estates."

Nicholas Le Poidevin, Q.C.,
New Square Chambers,
Lincoln's Inn

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