Are beneficiary bankruptcy searches really necessary in estate administration?
When executors or administrators are due to distribute inheritance funds to beneficiaries, it is necessary for them (or the solicitors dealing with the estate) to conduct a bankruptcy search against all beneficiaries. This includes any beneficiaries resident overseas.
If a beneficiary is bankrupt, their inheritance, or part of it, may be due to the trustee in bankruptcy (or the overseas equivalent) and not the beneficiary.
If the personal representatives of an estate fails to check if a beneficiary is bankrupt and pays the inheritance directly to a beneficiary subject to a bankruptcy order, they could be sued for the amount paid to the bankrupt beneficiary.
Solicitors administering an estate on behalf of an executor/ administrator need to bear in mind their duty to protect the interests of their client. Additionally, the need to protect themselves from a future claim for professional negligence should they fail to advise their client on the necessity and use of bankruptcy searches, including bankruptcy searches abroad.
Claims can be made against personal representative by creditors for maladministration of the estate, including wrongful distribution, and there is no upper limit on this liability. This is the case even if there has been a genuine mistake.
To mitigate the risk of claims being made against executors/ administrators of an estate in distributing the estate, it is advisable to commission bankruptcy searches in the country where the beneficiary resides.
Whilst a bankruptcy search of the Land Charges Register will reveal any bankruptcy orders made in England and Wales, it will not reveal any overseas bankruptcy orders.
The need to search for bankruptcies abroad has become increasingly significant when considering the number of individuals who make a temporary or permanent move abroad. Most countries have laws that limit the ability of bankrupts to directly inherit. A bankruptcy search is a necessary step to take in order to avoid liability of unlawful distribution of estate funds.
We can conduct bankruptcy searches in most countries across the world and regularly perform bankruptcy searches in: America (USA), Australia, Austria, Belgium, Canada, Denmark, Dubai (UAE), Finland, France, Germany, Greece, Guernsey, Hong Kong, Hungary, Isle of Man, Ireland, Italy, Jamaica, Jersey, Latvia, Malaysia, Malta, Netherlands, New Zealand, Norway, Portugal, Singapore, Slovenia, South Africa, Spain, Sweden, Thailand, United Kingdom, USA … and many more!
As well as the above, we can also undertake bankruptcy searches in many other countries so please do not hesitate to contact us if we can help.
How can check if someone is bankrupt overseas?
International Bankruptcy Searches can conduct bankruptcy searches in most countries across the world.
To check whether there is a bankruptcy order in force against an individual in a foreign country, search the specific country page on our website. You will find the specific costs, the information required to perform the search and how to order.
Order a bankruptcy search
or contact us on 01244 470339
