Claiming Assets Held by Third Parties

In many legal contexts-such as estate administration, insolvency proceedings, and the dissolution of companies-individuals and organisations may find that assets originally belonging to someone else are held by third parties. These assets might include money held in bank accounts, property stored with a third‑party custodian, shares, or other rights. Establishing who is entitled to those assets and the legal process for claiming them can be complex. This article provides a detailed, step‑by‑step explanation of how the law in England and Wales treats such situations, including rights of claim, statutory mechanisms, time limits, practical steps, and common issues that arise.

Understanding Third‑Party Assets

An asset may be held by a third party in circumstances such as:

• Funds deposited with a financial institution
• Property stored by a warehouse or repairer
• Securities or investments held by a nominee or custodian
• Benefits, accounts or contracts associated with a now‑deceased person

A third party is any person or entity that is not the legal owner of the asset but currently holds it in custody or control. The legal basis for a person's right to claim an asset held by a third party depends on the factual ownership rights, documentary evidence, and applicable statutory rules. Fundamental to these claims is the concept that ownership rights must be demonstrated and cannot be assumed simply because an asset appears to belong to a particular individual or estate.

Assets Held for Estates – The Role of Probate and Bona Vacantia

When someone dies, their estate comprises all the assets they owned, whether held directly or indirectly. Executors or administrators obtain probate or letters of administration to collect, manage, and distribute these assets. Probate gives legal authority to deal with the deceased's assets, including those held by third parties. However, if an estate fails to be distributed-such as when there is no will and no known heirs-the asset may be treated as ownerless property under the doctrine of bona vacantia. 

What Is Bona Vacantia?

Bona vacantia is a Latin term meaning “vacant goods”. In England and Wales, it refers to assets that have no legally recognised owner. This typically happens where a person dies intestate (without a will) and there are no known blood relatives entitled to inherit, or where a company is dissolved still owning assets. In such cases, the assets can vest in the Crown and be administered by the Bona Vacantia Division of the Government Legal Department on behalf of HM Treasury. 

Assets that become bona vacantia include:

• Money held in bank accounts
• Property and land
• Intellectual property (e.g. copyrights, patents)
• Other contractual rights and investments

Liabilities, however, generally do not vest as bona vacantia and remain enforceable against other responsible parties unless expressly discharged. 

The Crown's nominee will advertise unclaimed estates (for example, on a Bona Vacantia list) to give potential heirs an opportunity to claim the assets before they are realised or transferred into Crown ownership. This process allows claims to be made, subject to evidence of entitlement. 

When and How a Third Party Must Return Assets

Proving Legal Ownership

To claim assets held by a third party, claimants must establish legal ownership or entitlement through clear documentation. This may involve showing:

• A valid deed, title or registration document
• A contractual right or agreement
• Evidence that the asset forms part of a deceased person's estate
• Regulatory or statutory rights (for example, under insolvency law)

The third party holding the asset may require proof of entitlement before releasing it. This could include identification, grant of probate documents, letters of administration, or other legal instruments confirming authority to act. Banks, custodians and other institutions typically have formal procedures for responding to such claims.

Insolvency and Third‑Party Claims

In insolvency cases, such as when an individual is declared bankrupt or a company is wound up, assets may be held by third parties. The appointed trustee or liquidator has a statutory duty to identify all assets that belong to the insolvent estate. Where third parties are in possession of assets that may belong to the estate, the insolvency practitioner should:

• Contact the third party to request surrender of the asset to estate control;
• Check for valid third‑party rights such as liens (rights to retain possession pending payment of a debt);
• Clarify whether any asserted retention right is genuine under law. 

If a third party wrongfully refuses to hand over assets that demonstrably belong to the bankrupt or dissolved company, the insolvency practitioner may pursue legal enforcement or an application to the court.

Liens and Other Third‑Party Rights

A lien is a common law or contractual right that allows a third party to retain possession of property until a debt has been paid. For example, a garage that repairs a vehicle may retain the vehicle until the repairer is paid. In insolvency, a lien is typically treated as a secured interest, giving the lien‑holder priority over unsecured creditors, subject to applicable statutory frameworks. 

Other proprietary claims-such as retention of title clauses in commercial contracts-may also give third parties priority over certain assets. These must be considered by personal representatives or trustees when asserting ownership or claiming return of assets.

Unclaimed Financial Assets and Dormant Asset Schemes

Not all third‑party held assets are part of estates or insolvency situations. Banks, building societies and other financial institutions may hold dormant accounts where there has been no customer activity for a long period. Under the Dormant Assets Act 2022, such assets can be transferred to an authorised reclaim fund (such as Reclaim Fund Ltd), which administers them under the Dormant Assets Scheme. 

Crucially, dormant asset holders must maintain mechanisms to preserve third‑party rights and interests. If an individual legitimately asserts entitlement to these assets, they retain the right to reclaim their property even after it has been transferred to a reclaim fund. 

Claiming dormant financial assets often involves:

• Contacting the institution or reclaim fund holding the asset;
• Providing detailed identification and proof of ownership;
• Completing required claim forms and documentation.

This process applies to dormant bank accounts, unclaimed dividends, unclaimed pensions, and other financial products where the original owner cannot be immediately traced.

Time Limits and Risk Considerations

Time Limits for Claims

Claims against assets that have passed to bona vacantia or been transferred into dormant asset schemes are subject to statutory time limits and procedural rules:

• Bona vacantia claims for unclaimed estates are normally accepted within 12 years from the completion of estate administration, with interest payable. Fully documented claims may be admitted up to 30 years from the date of death, without interest. 
• Dormant asset reclaims generally have no fixed time limit, but claimants must provide robust evidence of entitlement and satisfy the reclaim fund's procedural requirements.

Missing a deadline can result in loss of the right to claim, although specific circumstances may allow discretionary considerations.

Risks and Legal Challenges

Individuals seeking to claim third‑party assets should be aware of potential risks:

• Claims against assets vested in bona vacantia can be contested and require compelling evidence of kinship or legal entitlement.
• Competing claims may arise from other potential beneficiaries or creditors.
• Misrepresentation or fraudulent claims can lead to civil or criminal liability.

Given these complexities, legal assistance may be appropriate to avoid procedural mistakes or disputes.

Practical Steps to Claim Third‑Party Held Assets

1. Identify the Asset and Holder: Establish precisely what is held by a third party and where it is located.
2. Gather Documentation: Obtain title documents, contracts, records of ownership, and identification.
3. Check Relevant Rules: Determine if the asset is part of an estate, insolvency estate, dormant asset scheme, or falls under bona vacantia.
4. Contact the Holder: Notify the third party (bank, custodian, storage provider) of your claim, providing clear proof of entitlement.
5. Apply to Appropriate Body: For unclaimed estates, submit a claim to the Bona Vacantia Division with supporting evidence of kinship. For dormant assets, file a reclaim with the authorised fund.
6. Seek Legal Guidance if Needed: Consider professional advice where complex title issues, competing claims, or procedural hurdles arise.

Key Takeaways

Claiming assets held by third parties in England and Wales involves recognising the nature of the asset, the legal basis of the claim, and the correct statutory or procedural pathway to assert a right to those assets. Core legal frameworks include probate and estate administration, insolvency law, bona vacantia for unclaimed estates, and provisions for dormant assets under the Dormant Assets Act 2022. Effective documentation and timely action are essential to establish entitlement and recover assets held by third parties. 

James William Steven Parker

James is the founder of UKLegalGuides.com and a former agent at the Ministry of Justice (UK). With a background in processing legal claims, he launched this platform to make the laws of England and Wales accessible to everyone.