Finders call for protection for beneficiaries from advance deals being made without their knowledge or consent before they receive their inheritance.

Widespread concern is being expressed amongst the legal profession about the legality of the “Deferred fee” arrangement being offered by at least one firm of probate genealogists.

This is where the probate genealogist makes a deal in advance of locating any heirs with the person or firm referring an estate to them, where no Grant exists.

These fees are often extortionate and disproportionate to the Estate value. They are agreed in advance without apparent legal authority and without reference to the heirs whose inheritance may be vastly reduced in value due to the “deferred fee” being deducted from the Estate. This is vastly different to our contingency fee which, by it’s nature (being a percentage of the net amount due to each heir) will always be proportionate to the individual’s entitlement and, most importantly, will never put the estate at risk of becoming indebted to the ‘deferred fee’ which could make the estate insolvent!

We searched for clarity on this arrangement on the most criticised heir locator’s website and found nothing other than the offer to ‘defer’ their unspecified fee. No specifics and no hourly rates are quoted anywhere. Furthermore there is no promise to complete all the necessary work without charging additional fees which could run into many thousands of pounds, such as:

  • finding all the heirs to the estate (not just one entitled beneficiary)
  • proving all prior claimant categories have been ruled out
  • proving termination of lines
  • providing evidence sufficient to obtain indemnity insurance
  • searching for a possible will
  • otherwise completing research in full to enable a safe distribution

The objective appears to be to find one heir only, refer the case back to the person or firm who made contact with the heir locator and ensure a Grant is extracted immediately in order to pay the probate genealogy “deferred fee” from the Estate funds. We have been told by clients that one firm in particular is known for its high fees and is quoting excessive “deferred fees”. We can only imagine how much the final total fee becomes once all the work listed above is completed.

Finders do not offer a “Deferred Fee” and prefer to offer our contingency fee option instead wherever possible. In this way we can agree a fee, expressed as a percentage to ensure fairness, of the net entitlement of each heir we identify and locate. The person or firm referring the case then has no direct involvement in the fees paid to Finders, but, critically, can control costs by setting the percentage limit in advance by discussion with Finders.

Furthermore, the heirs themselves are told of the approximate net sum we hope they will receive. If we do not know the value of the estate and are working on a risk that the estate value may be zero we will also advise the potential heirs of this. They can then see exactly how much our fee is proposed to be, or accept that our risk is reasonable based on an unknown value.

This option is available to lawyers even when only modest estate and inheritance values are at stake.

Finders also offer three other fee options:  Budget, Fixed Fee and Estate/Trust Agreement Fee. Our contingency fee option is possible with or without a Grant.

Increasingly we are asked for our contingency fee option as the legal opinions and QC advice we have is that this is the safest, least contentious route for the probate practitioner. Finders also offer to agree a fee limit in advance which provides both solicitor and beneficiary with protection from over-charging.

When working on our contingency fee basis Finders guarantee to complete all necessary work (as listed above) at no extra charge. Our commission has to cover all our risks and expense. This means we guarantee to find all beneficiaries and provide a full report regardless of the outcome, even if completely negative and no heirs are traced, or if they simply do not wish to retain our services, at no charge to the general Estate or the solicitor referring the case to Finders.

Significant concerns are now being expressed by the legal profession about “deferred fee” arrangements.  The solicitor who agrees to a “deferred fee” at the expense of an estate, especially where there is no Grant in existence (and hence no authority to make such an arrangement), may be placing themselves at unnecessary risk.

Our belief is that “deferred fees” are unfair and potentially unlawful and that heirs should demand clarity over the amount that is being taken from the Estate, and hence their inheritance, without their knowledge, approval or prior consent.

How to establish whether or not a Probate Genealogy fee option is fair

Not all situations where beneficiary tracing is required have universal criteria and a reputable firm of probate genealogists will provide a free quotation.

Finders offer four fee options, but not all are suitable for every situation. The situations are, as you can imagine, too numerous to list, but in general it is sound advice to:

  • Ask for a free no-obligation quotation to suit the circumstances of the case
  • Consider how the heirs known to the Estate already will be best served
  • Consider the contingency fee option as it is the lowest risk option for the probate professional. You can set a fee limit in advance if necessary
  • Avoid the “deferred fee”. It is potentially illegal to make any financial ‘deal’ in advance of an heir or administrator being found. These fees are often excessive and disproportionate and do not guarantee any final outcome with further work being required and further genealogy fees being incurred

There is no simple answer as no one fee option is always ‘better’ than any other, it all depends on the individual requirements of each case.

As with most problems, taking advice from experts is a good idea. Finders will happily provide free advice, estimates and quotations.

Finders can be contacted at 6-8 Vestry Street London N1 7RE. Tel: +44 (0)20 7490 4935 e-mail: [email protected]

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