If you are the executor (personal representative) of a will, or the designated trustee of their trust passes away, it’s your legal duty to act in the best interests and distribute the assets to the beneficiaries of the trust according to the terms laid out by the benefactor.
*The roles of executor and trustee can be listed under the umbrella term: fiduciary, so we’ll refer to both as such throughout the blog. There are various reasons why you, the fiduciary may not be able to locate a beneficiary of the will or trust. Maybe you lost touch, or perhaps you had a falling out. What should you do in this situation?
When you were bestowed with a fiduciary role, it became your legal obligation to use reasonable diligence in attempting to locate the missing beneficiary. The definition of “reasonable” can depend on individual scenarios like the monetary value of the assets, and what actions have been made in attempting to contact the missing beneficiary.
To start, you as the fiduciary should call the missing beneficiary’s last known phone number, then send a notice that the estate / trust is being administered to their latest address on file. If you get no response from these initial touch points, try contacting their family members and friends for any information they may have on their whereabouts. Social media can also be a powerful tool, as well as people-locating sites on the internet. It also can’t hurt to conduct a property search via government websites, which often show official home records like deeds.
If the assets being distributed are not monetarily significant, you as the fiduciary won’t be required to shell out copious amounts of the trust’s money to try and locate the missing beneficiary. On the other hand, if the assets are of a significant amount, you may have to take further actions to attempt to locate the absent beneficiary to meet the threshold for ‘reasonable diligence’. These can include hiring a P.I. (private investigator) or utilizing an heir search specialist.
Believe it or not, there’s are services dedicated to finding missing beneficiaries. By utilizing estate investigators and genealogists, heir search specialists are able to comb through vast swathes of the country – and worldwide – to find potential heirs. They do so thanks to access to records like birth, death, marriage, and adoption records.
Heir search specialists do cost money, but can provide peace of mind that the person receiving distributions from the trust is, in fact, who they say they are. Unfortunately, there are instances where people pretend to be estranged heirs, so it’s important to confirm identities before any money from the trust is handed over.
If your efforts in hiring a search specialist still don’t turn up the beneficiary you’re looking for, it’s possible to petition the court asking permission to distribute a preliminary amount of property and money to the beneficiaries who have been successfully located. It’s likely that the court will order that the assets be held in the trust for a period of time (this varies by state) so the missing beneficiary has a reasonable amount of time to come forth and claim it. Another option is to obtain indemnity insurance, which covers you in the scenario where a previously un-located beneficiary appears and asks for their portion of the trust after it’s been distributed.
Tracking down an estranged beneficiary can take significant resources and lead to a prolonged asset distribution process. Additionally, the beneficiaries already located can often become impatient while time lapses. For these matters, it can benefit you to hire a legal professional with experience handling the known beneficiaries’ demands while still abiding by state regulations and protecting the trust’s best interests.
In the event where a beneficiary cannot be located, even after your due diligence efforts, it’s best to have a legal professional’s guidance when petitioning the court for a preliminary asset distribution to known beneficiaries. It saves time, and ensures legal compliance.
Becoming a fiduciary of a will or trust is an honor that comes with large responsibilities including carrying out the wishes of the deceased. Thankfully, you do not have to navigate challenging situations alone. By leaning on the extensive experience of the attorneys at Anderson, Dorn & Rader, your unique circumstances can be handled to provide a positive outcome for all parties involved. When you need estate administration assistance, our team will be ready. Contact Anderson, Dorn & Rader, and we’ll ensure your role as the fiduciary is maximized while honoring loved ones in the process.