Due diligence, managing risk and best practice
Investigating a deceased’s finances is a large part of a Personal Representative’s job during the process of estate administration. It’s one of their primary and most urgent duties and is an essential part of the due diligence, risk management and best practice they are expected to carry out within their role.
Unclaimed & Missed Assets in the UK
2020 figures from Reclaim Fund Limited – the fund banks pay assets into when they have reached 15 years or more – show that there was a staggering £1.3 billion left in the fund that year, a figure which has been increasing annually for some years.
Added to this staggering figure, unclaimed shares, pensions, and savings are at unprecedented levels. Data from the 2016 FSA report found that a snapshot look at ‘gone away’ pension accounts (where the pension provider has lost contact with the account owner), has resulted in £200 billion unclaimed pension money over the years, while over £3 billion lies in National Saving and Investments, as yet repatriated to its rightful owners. The Share registers are known to be holding around £640 million in dividends, reported by the Dormant Asset Commission Report of March 2017.
With the past couple of decades seeing a sea change in the behaviour of people in terms of house and job moves, the move to online account access, and the lack of good record-keeping within finances, coupled with the introduction of Workplace Pensions with every job move, finding unclaimed assets has never been harder. An industry study conducted in 2021 revealed that 88% of professionals believe it is getting harder to locate estate accounts, and 28% of families of the deceased simply do not know where all their loved ones’ assets are. The need for thorough due diligence in the estate administration process is therefore paramount for all concerned.
Best Practice
Sarah Walker, Partner at Weightmans, understands the challenges faced by Personal Representatives and the need to operate first-class best practice across all the firm’s cases –
“In these more modern times of electronic statements and communications by text and email, it has become increasingly common for deceased people to leave no paper record of their assets behind. As a result, this can make ascertaining all the assets in an estate, a lengthy and almost impossible task. We strongly recommend to all Personal Representatives that they take advantage of the various means of protecting them from liability available in the market and this advice is provided to them in writing at the outset of the administration.
We chose some years ago to make missing asset searches and s27 Trustee Act 1925 notices compulsory where a professional is appointed to administer an estate and this move has paid dividends. We find additional assets or information on a large percentage of all the estates we handle including on occasion more accounts held by a bank with whom we have already been in correspondence. For a modest fee, this vital due diligence should be part of every solicitor’s toolkit.”
…
To obtain a full copy of this article and our free resources to help you manage the risk of missed assets and liabilities enter your email in the form below.
For more information on any of our services visit our website www.estatesearch.co.uk, or email [email protected] to find out more.