What happens if a beneficiary is bankrupt?
When an individual becomes bankrupt, in most jurisdictions across the world, a ‘Trustee in Bankruptcy’ is established and, ultimately the individual loses the ability to control their own assets.
A bankrupt beneficiary has the duty of informing their Trustee to any changes to their monetary and financial circumstances. And although you would like to think that the beneficiary would inform all relevant parties, this may not always be the case, especially with beneficiaries residing abroad.
What are the possible consequences for Personal Representatives?
If a bankruptcy order is in place and the beneficiary did not notify either their Trustee or the estate’s PR’s, the money will have been distributed to the wrong person, a scenario which can have serious consequences.
How can Personal Representative’s protect themselves?
Because the repercussions of distributing to a bankrupt individual are not worth the risk, it is strongly advised to run an international and domestic bankruptcy search against each heir in line to inherit for the protection of the Personal Representatives. We can assist in undertaking these searches via our Overseas Bankruptcy Search service and can provide a quotation upon request.
For further information on this service, please contact:
Andrew Ritson
Legal Support Services Manager
Phone: 020 7490 4935
Email: [email protected]
