It is the responsibility of the executor to administer the estate of the deceased and to account for any hidden assets. One of the first steps of administering an estate is locating all of the deceased’s assets. This step can seem easier than it actually is in practice. If the deceased kept poor records, was private about their financial affairs or had difficulty with their memory later on in life it can be difficult to create a comprehensive picture of what assets they owned.
Assets that are difficult to locate can be referred to as hidden assets (although you often hear this term in relation to divorce proceedings it is also applicable to probate). Hidden assets can be a variety of things for example cash, bonds, insurance policies, stocks and shares, loans, and unsecured debts to name a few but essentially the idea is if an asset changes the value of the estate, effort needs to be made to locate it.
It is important that sufficient effort is made by the executor to locate all of the deceased’s assets. When applying for probate on an estate, an inheritance tax application detailing the assets and their values must be submitted to HMRC. This Inheritance tax application is used to declare the amount of tax that is owed by the estate. If the incorrect information is provided, due to the negligence of the executor to locate the estates assets, results in a loss of tax to HMRC the executor can be liable for the consequences.
There can also be complications when assets turn up later on after the administration of the estate has been completed. This can result in complicated, time-consuming, and sometimes expensive corrective work.
It is also the executor’s duty to handle to the estate in the best interests of the beneficiaries. Failing to locate and distribute their inheritance to them would be failing to do this. If sufficient action was not taken by the executor during the administration of the estate results in a loss to a beneficiary, the executor could be held personally liable.
What steps should you take to locate the hidden assets of a deceased person?
If you are the executor of an estate and you believe or have suspicions that the deceased may have owned assets that you are unable to easily find evidence for, there are some actions you can take to ensure you have the correct information before applying for probate or distributing their estate.
The first step that you should take is to search their residence for paperwork. They may have kept letters or statements from financial institutions where they have or had accounts or assets. Looking through all the paperwork can be painstaking work but could reveal assets you were completely unaware of. If you have access to statements for the deceased’s bank accounts, you should look through to see if there were any regular payments coming in or out of their account.
Once you have collected a list of institutions you have found evidence for you should contact each one informing them of the death and requesting information in relation to assets/accounts they may have or had with them. It is unlikely they will provide this information straight away, but they should be able to confirm or deny their existence after seeing the death certificate and Will. If you suspect they may have assets with an institution you cannot find evidence for you can contact them with the death certificate and will and request confirmation of whether they held assets there.
Another option would be to employ a professional to locate any lost, dormant or unknown assets. A professional search can locate a variety of assets, without the need of having to contact each institution individually. Undertaking a professional search can be used as evidence to show that sufficient effort was made to locate hidden assets.
When using Final Duties full administration probate service, a professional asset search will be undertaken by one of the qualified and regulated solicitors on our panel. This search will be provided by a specialist asset tracing company that is exclusively used by qualified and registered professionals.