We are having to go down the route of a missing beneficiary indemnity policy as locating a beneficiary have proved fruitless. Should the cost be an administrative expense of the estate or should it be borne solely from the share of the missing beneficiary?
Once the insurance is in place the whole of the estate is probably to be distributed, so there will be no “share” of the missing beneficiary outside of the policy.
As the payment of the premium is to enable the estate to be distributed, I would see it as a general administration expense, payable before division amongst the “traced” beneficiaries.
Careful consideration will need to be given to the level of cover as, should the missing beneficiary (or their heirs) make a valid claim several years hence, they will usually be entitled to the then value of their interest, taking into account the potential for an uplift in values. If you have used one of the recognised genealogists/ tracing agencies (say, Fraser & Fraser or Kin Probate), they can probably advise on the level of cover that should be considered.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Hi Jodi,
As Paul says, the premium for the policy is considred as an estate expense. Regarding the uplift in value that Paul refers to, the policies that we facilitate include an escalator clause which therefore covers this aspect.
Regards,
Philip Turvey
www.angliaresearch.co.uk