The STEP Journal reports that the House of Commons has recommended that there should be a complete reform of the law surrounding what happens when a person is missing, presumed dead.
Following a recent enquiry, the House of Commons reported that the law surrounding this area is so confusing that it is very difficult for families to obtain the information they need, at such a distressing time.
There are numerous inconsistencies and several different procedures that have to be followed in order to resolve the many issues that arise when a person has gone missing. For instance, a Court order stating that a person is missing presumed dead may resolve the issue of claiming a life insurance payout however the same order could not then be used to cancel a credit card or bring a jointly held mortgage to an end.
It takes seven years to obtain a declaration of death; during that time it is possible for the estate to be bled dry by insurers and creditors. Sir Alan Beith of the House of Commons select Committee highlighted the problem “in some cases missing people have been held to have died in order to dissolve a marriage, while remaining technically alive in the eyes of mortgage lenders and other agencies”. Non payment of mortgages could then lead to the missing person’s property being repossessed, while continuing direct debits and payments for unnecessary insurance premiums empty the bank account.
The report recommends that new legislation is urgently needed to create a single statutory process where a certificate of presumed death can be issued to resolve all the affairs of a missing person. The proposed new law would retain the seven year period before a presumption of death could be applied for but it would also introduce guardianship orders to protect the financial position of the missing person or his or her dependants until that happens, by allowing relatives to preserve assets by cancelling direct debits, pay off debts and provide maintenance for dependants.
The proposed new law would be a welcome change, making the process of dealing with the legal consequences of a missing person who is presumed dead far more straightforward, at a time when those left behind need some certainty.
For further information please contact Justine Clowes in the Private Client team on 01625 442148.