Bruce Cane
Executors are being warned by a leading firm of barristers that they are obliged to reopen legal files where evidence of outstanding disbursements or bequests emerge after probate is granted.
If they fail to act when required, executors could face legal action and financial penalties.
The warning comes as inheritance recovery specialists, Perane, reveal that charities and other beneficiaries are missing out on millions of pounds due to them because of these unrealised assets, which executors are failing to distribute, either through ignorance or wilful neglect.
Stephen Hackett of 3 Hare Court has provided a legal ‘opinion’ on the matter on behalf of Perane. In his ‘opinion’ he concludes that the role of the executor continues for life and that he/she may be personally liable if they fail to fulfil their obligations to disburse the estate in line with the expressed wishes of the deceased.”
You can read the full document here.
Perane, based in Norfolk, sought legal advice because it has developed a search engine capable of identifying historic share ownership which may have been missed in the original winding up of an estate. Residual sums, often left to charities, are valuable because they have not been subject to inflation. Working with the beneficiaries, Perane must contact the original executor to co-operate and realise the funds to repatriate them.
Difficulties arise because the original executor may no longer be in post, the files may be difficult to locate and, most importantly, there is little financial incentive to reopen the administration because the executors’ fees have already been paid at the time the original winding up.
Barrister Stephen Hackett says: “The executor’s obligation to get in an estate’s assets requires the use of “due diligence”.
“I am doubtful that an executor could be said to be using due diligence if Perane has drawn their attention to an asset, and indeed a means of realising it, and that notice was ignored or the opportunity refused.”
He continues: “If an executor were to be found to be in breach of their duty to the beneficiaries described above, they would in my view face litigation in which they would face a substantial risk of being unsuccessful. This may well result in personal liability for the executor and/or adverse costs orders.”
Information obtained through Perane’s search engine can be analysed to indicate share assets that are unclaimed and, in addition, where share ownership has been transferred to avoid tax obligations.
With over £50bn of lost and unclaimed assets held by financial institutions, the company estimates that £40m of shares and £660m of pension funds are waiting to be redistributed to the charitable sector.
Perane CEO Bruce Cane explains: “This is an important legal opinion because some executors appear to believe that they either don’t have to distribute assets when they are found, or simply can’t be bothered to do so because time has passed and their fees paid.
“Perane works to repatriate these funds to the individuals and organisations to whom they rightfully belong. If you were owed that money or those shares, you’d want to know the legal executor was doing their job.
“Sometimes, the beneficiaries are unaware of the original bequest because the legacy may have been dormant for 20 or 30 years.
“At Perane, we offer a professional service in cases of historic legacies, working with all parties, the beneficiaries and, we hope, the executors, to complete the full disbursements of the estate and the provisions of the will.”
Perane’s search tool is also capable of detecting whether shares have been transferred to another family member. This could in some circumstances suggest avoidance of inheritance tax, particularly when there is a significant time lapse between the death and declaration of transfer.
Cane adds: “In just one case, uncovered in 2023 by Perane, an executor failed to declare hundreds of thousands of pounds worth of shares on an inheritance where property and share assets amounted to three quarters of a million pounds.
Perane has previously written to the Chancellor and to the Treasury Select Committee urging them to open an inquiry into how much revenue is undeclared to HMRC on an annual basis.
