By Legal Futures’ Associates Finders International
A Personal Representative (PR) to an estate has an important role to play in the administration process with their responsibilities including checking the financial status of the beneficiaries before the estate is distributed. Sadly, bankrupt beneficiaries, both in the UK and abroad, are quite common and this may worsen in a post Covid-19 world.
A bankrupt beneficiary.
When a beneficiary becomes bankrupt, they have a duty to inform the Trustee of their financial situation, so the proper procedure can be put in place. For most jurisdictions worldwide, a ‘Trustee in Bankruptcy’ is established meaning the bankrupt beneficiary loses control over their own assets. Unfortunately, some beneficiaries, especially those residing abroad, do not follow the correct procedure.
The possible consequences to Personal Representative’s.
When a bankruptcy order is in place, the beneficiary should notify their Trustee or the estate’s PR so that the money can be distributed to the correct person. Serious legal consequences can be a result of a beneficiary that does not notify the Trustee or the estate.
For example, in the UK, Trustees in Bankruptcy are entitled to sue the PR for the amount distributed in error. This can be made easier for Trustees, especially those in Europe who can use the ‘European Neighbourhood Policy’ to make cross border claims.
How can Personal Representative’s protect themselves?
The Solicitors Regulation Authority encourage solicitors to carry out due diligence for UK and international beneficiaries to avoid the serious repercussions of distributing the estate incorrectly.
Finders International provide an easy, efficient and global Overseas Bankruptcy Search service that utilises various international insolvency databases and local research agents . Our Legal Support Services team consistently ensure they understand foreign insolvency law and keep up-to-date with changes around the world.
To find out more about our Overseas Bankruptcy Search service or if you have any questions then please visit our website. Alternatively, you can email email@example.com or telephone +44(0) 20 7490 4935