Lost Life Insurance and Annuities

Accounting for Missing Assets for Probate and Estates

John Powers, CFE

Identifying undisclosed assets and unknown accounts for probate administration can be a challenging task under the best of circumstances. Decedents often leave behind a confusing trail of financial information, creating unforeseen demands and distractions for their legal representatives and accounting professionals. Difficulties with record acquisition, review, and resolution, as well as risks of errors and omissions, inevitably increase when the individual is not present to produce documents or explain actions. Nevertheless, many executors, trustees, and CPAs do not anticipate the problems that arise when major institutions, rather than individuals, are the weak points in the probate process. Decades of compliance failures in the life insurance industry have resulted in billions of dollars in unpaid benefits, unreported assets, and uninformed beneficiaries. A series of major settlements—most recently with MetLife in New York—serve as cautionary examples for accounting professionals seeking information on assets and accounts for probate purposes.