Fixed Fee Probate and Genealogy
Following on from a recent post which highlighted the problems in the heir hunting industry; high probate fees and lack of regulation – Here’s a more in depth look at probate genealogy fees.
An independent poll was conducted by market research company, Opinium, amongst 2,161 members of the general public. They found that people could be handing over as much as £10 million a year to heir hunter firms. The average amount charged by heir locators is 20% of the inheritance. 40% of people found by heir hunters felt under pressure to pay.
Sadly, genealogy fees tend to be out of proportion to the amount of work that’s actually involved. Many heir hunters calculate their costs as a percentage of the estate value. Whereas, an hourly or fixed fee probate rate is a much fairer system.
In many cases, solicitors appoint genealogists to seek out missing heirs. Therefore, they too have a responsibility to ensure estates only pay fair fees that reflect time spent on research.
STEP (the Society of Trust and Estate Planning) issued a briefing note to its 6000 members to explain genealogical research fees; fixed fee probate, time based and contingency fees. Here are a few excerpts-
“It is good practice to obtain a range of quotes from genealogists and you should be fully aware of the different options available.”
Fixed Fee Probate – “Fixed fee options are set fees agreed in advance and in some cases may be payable only if a pre-determined goal is achieved.”
Time-based fees – “Time-based fees are charged according to the actual time spent, normally on a per hour basis, which is recorded and billed.”
Contingency Fees – “once the genealogists have undertaken the research, they come to an agreement with each beneficiary they identify; whereby the beneficiary agrees that the genealogist is to be paid a share of their entitlement when the estate is distributed.”
Many heir hunters charge contingency fees as a percentage of the inheritance as their fee. This can amount to charges that are out of proportion to the value of the service they offer. After all, they’ve used information that’s available freely on Government websites.
If you’ve been contacted by an heir hunting firm and are faced with an excessive finder’s fee. Seek independent legal advice before you sign anything. Beware that some companies may apply excessive pressure or shock tactics to get you to commit. Put your foot down and do your own research – you could save thousands.