Managing risk in estate administration

 In Probate

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Managing risk in estate administrationWhen it comes to administering estates, you can be faced with many challenges including intestacy, missing beneficiaries, overseas assets, bankrupt beneficiaries and more. All these challenges come with a significant level of risk surrounding the distribution of the estate. Personal Representatives are financially and legally responsible for the correct distribution of the estate and tasked with maximising the value of the estate for beneficiaries. If an estate is incorrectly distributed, there could be a claim against the estate and the Personal Representative would be personally liable for any mistakes.

At Title Research, we have seen our solicitor clients come very close to a misdistribution on numerous occasions. In this article, we will explore some of the ways in which you can mitigate risk in estate administration.

Correct distribution on intestacy

If you’re presented with an intestate estate, it is incredibly important to ensure that all entitled people are included, as well as making sure that unentitled people are excluded. Family relationships are becoming increasingly complex with more adoptions occurring both in and out of families, an increasing number of children being born outside of the traditional marriage, and more people having children with multiple partners. These changes in family dynamics make family tree verification more important than ever.

If you’ve been provided with a complete family tree, we recommend getting it professionally verified to ensure that it is correct. It is advisable to check the family tree for accuracy by documenting all birth, marriage, death or adoption events, carrying out confirmatory searches of the birth and marriage indices, and interviewing all potential heirs to ensure all the information collected is correct. At Title Research, we’ll do all of this and provide our client with an insurance policy, certificates proving entitlement, a distribution schedule detailing fractional entitlement and a diagrammatic family tree. Verifying the family tree provides Personal Representatives with added peace of mind and protects them from the risk of any future liability from unknown beneficiaries.

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If little or no information is known about the family make up, it would be essential to reconstruct the family tree to give you insight into family lines. Without reconstructing the family tree, it is almost impossible to be 100% certain that you are correctly distributing an intestate estate. Family relationships are not always as they seem so it’s necessary to meticulously descend each family line to identify all entitled heirs. Title Research’s team of genealogy specialists apply the rules of intestacy for the relevant jurisdiction, investigate all potential entitled heirs, and formally contact each beneficiary to confirm their identity.

Insurance providing complete peace of mind

Genealogy is not an exact science, so it is always advisable to seek insurance cover no matter the outcome of the research, especially when it appears that one side of the family has no potential heirs. The degree of risk is higher because there are no family members to verbally verify the research. Additionally, in the increasingly connected and online world, people who might be missing today could try and contact friends and family in the future.

Insurance protects you and your client from future risk and offers resolution in complex cases. Title Research’s reports and methodologies are accepted by specialist insurers and all research is conducted with insurance in mind.

In an un-regulated industry, look to other accreditations.

There are a wide range of different providers for specialist services available to choose from. Your client could make a decision based solely on price, but in an unregulated industry, looking for other independent accreditations can be very helpful. For example, does the provider hold the internationally recognised ISO accreditations for quality and information security?  What arrangements do they have if they need to engage a third party outside of the UK? Do they hold professional indemnity insurance? These are all points to consider that may affect the advice you give to your client.

How to best advise your client about pricing

Finally, it is worth considering the transparency of the price you are being quoted. If it is a fixed price for a piece of work then check what is and is not included within this. For example, is the use of databases included or is this charged as an additional disbursement? If a time and expense quotation is provided then ask what the hourly rate is likely to be. Title Research applies various hourly rates depending on the experience level of the person undertaking the work – much as I am sure you do within your firm – but can inform you of the average rate used.

Contingency or commission fees can seem attractive to lay people, as it is often presented in a way that suggests that it doesn’t cost the estate anything. However, you may wish to advise your client of the STEP guidelines published on this subject which urge caution. It is also worth calculating the approximate fee that would be paid using a percentage fee and comparing that to an hourly rate or fixed price quotation.

At Title Research, we can provide fast, fixed fee access to genealogical research and asset repatriation services, assisting you and your clients with complex estate administration cases. We use our experience and expertise of over 50 years to deliver smooth, cost-effective results. Our services include tracing missing or unknown people, reconstructing family trees, valuing and managing UK assets, administering foreign shares and funds, family tree verification, probate valuation and much more.

Get in touch with us today to discuss how we can help accelerate the estate administration process for you and your clients. Call 0345 87 27 600, email or click here to contact us.

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