You’ve probably seen or heard of the BBC program Heir Hunters, however, all’s not as it seems. There has been frequent media coverage of the extortionate probate fees
or finder’s fees charged. Here’s a more in depth look.
The Scale of the Problem
Some 2 thirds of British people die without making a will. There are approximately 60,000 missing heirs in the UK each year. Around half a million Brits benefit from an inheritance through heir hunting firms every year. This means there’s plenty to go off in this lucrative industry.
It is a highly competitive field – in fact – the process is often described as a race to find the heir. This race is to reach heirs before rival companies and thus secure their fee. Not – as they’d have you believe – a race to find the heir before the Government gets the lot.
The average amount charged by heir locators is 20% of the inheritance. The average estate value is £67,500, therefore probate fees are £13,500 at 20%.
Which.co.uk mentions one firm charging as much as 40% plus VAT. “This equates to £120,000 of a £250,000 estate. Yet, the work might have only cost a few thousand pounds if based on the time spent.”
Title Research; a firm which tracks down beneficiaries but only on the instruction of solicitors, revealed some shocking truths, “We have received some shocking complaints about probate fees, including one case where the heir hunter charged 33% amounting to £65,000 to find three heirs, plus £12,000 in expenses. We don't think it's fair that missing heirs should receive less than their legal entitlement because the Deceased lost touch with them.”
The Use of Scare Tactics
40% of those people found by heir hunters, felt under pressure to pay – Opinium Poll
They may also use scare tactics, `the government will take the money if it is not claimed.` There is some truth in this – the Crown does take possession of the estate – however, this is not until 30 years have passed. It is more than likely that the person has only recently passed away. So there is no need to be rushed.
Some firms will withhold any details of the long-lost relative and amount of inheritance until the beneficiary has signed an agreement. The small print in this agreement means they’re legally obliged to hand over a massive portion of their inheritance – without even knowing how much the fees will be until it's too late.
Case Studies in the News
Jessica Ellacott was owed a share of £145,000 inheritance from the estate of a distant cousin twice removed. She was contacted by heir hunters and subsequently left reeling when they informed her that a third of her entitlement would go towards covering the cost of probate fees.
Valerie Challis was coaxed into signing away a third of her inheritance before she was even informed how much she stood to gain. After contacting the Treasury directly she discovered the estate was worth £37,000 – the probate fees would have been at least £10,000. She then discovered that this was to be shared between 24 other relatives.
What to do if you’ve been Contacted
If you get a knock at the door one day – don’t sign anything until you find out what’s what! Some less reputable companies will force you to sign a contract giving away anything up to 30% of your inheritance. You are not obligated to use the heir hunter’s services. After all – it is probably the case that they found details of this lost relative on a publicly accessible government website.
Don`t act in haste, a little research may save you thousands; IWC can probably handle your claim for a much lower fee; call us free on 0800 612 6105 to find out more.