Contingency Fees and Bona Vacantia. The fairest way for beneficiaries?
Industry: Legal Services
The general public’s perception of probate genealogy has changed following the broadcast of programmes such as ‘Who do you think you are?’ and ‘Heir Hunters.’
UK (PRUnderground) October 31st, 2012
The general public’s perception of probate genealogy has changed following the broadcast of programmes such as ‘Who do you think you are?’ and ‘Heir Hunters.’ What was a relatively unknown industry has become high profile and beneficiaries are more likely to welcome the knock on the door from a professional heir hunter rather than great them with scepticism. There are around 60,000 people who, each year, find they may be entitled to a share in the estate of a previously unknown relative but it is not just the money that makes them want to hear what the genealogists have to tell them. They also provide the beneficiaries with a genealogical history that can lead to them learning of relatives they never new existed and families being reunited.
A large part of the heir hunters work is on cases of intestacy or where a named beneficiary cannot be found or even when the beneficiary named in the will has already died. Better drafting of wills perhaps as a result of greater specialisation by lawyers’ means this last point is more likely to be the case with older wills. It is therefore worthwhile to conduct a will search to ensure practitioners are working from the latest version, will register Certainty is the most recent initiative in this area.
There are two basic levels of fee-charging structures. That favoured by most professionals and the public is a contingency fee and there are great advantages to this method. They are simple and entail no hidden charges for the beneficiaries. They facilitate cost control, as the percentage can be set in advance. Beneficiaries can re-negotiated if new factors come to light during the search process and in some cases are the only affordable way for an heir to secure title to an estate. Most importantly contingency fees are only payable on a successful outcome, when the estate is distributed, and avoid the potential of indebting the heirs.
Charging by contingency fees is a double-edged sword for the probate genealogy companies. They risk not recovering their costs should they draw a blank or if the estate proves to be insolvent. On the other hand contingency fees enable heir hunters to follow their instincts when tracing missing beneficiaries and due to the competitive nature of the business keep the costs for heirs low.
Some companies argue that fixed fees are a better approach but most would agree that as the fee comes from the whole estate, known beneficiaries loose out on the costs of finding missing heirs and, of course, the fees are charged regardless of outcome.
Those supporting fixed fees would argue that insufficient information is given to beneficiaries before signing a contract committing them to a contingency fee. However, it is usually the case that the probate genealogist will provide full information up front and, consumer protection legislation regarding distance and doorstep selling apply, giving beneficiaries a cooling off period and right to cancel. So the probate genealogist requires faith that the heirs they have located will treat them fairly in the future.
Most professional probate genealogists will anyway be flexible in their charging structures, especially where a case involves a minor or otherwise vulnerable person and setting the percentage and parameters in advance would be more appropriate. Of course other factors such as the size of the estate and the amount of information available initially will influence the charging method.
When instructing a probate genealogist it is not just about the fees. References and a good reputation should be considered as should the size and experience of the company’s in-house resources, their international network and whether or not they offer missing beneficiary insurance through a reputable provider, such as Aviva.
When someone dies intestate without known heirs the estate becomes ‘Bona Vacantia’ and is administered by the Treasury Solicitor. There are around 2,000 such estates each year and the Treasury Solicitor will advertise for beneficiaries to come forward. Probate genealogy companies will investigate such cases, at their own risk, and it is these cases where the use of contingency fees becomes even more appropriate.
It has been argued that the Treasury should form a panel of probate genealogists to quote on each estate within a framework outsourcing agreement. This idea is though, anti competitive and risks a conflict of interest, with the government instructing a limited number of companies that it hopes will be unsuccessful. The majority of professional probate genealogists see it as vital to maintain an open competitive market, which drives down costs for heirs and shares the risk.
Probate genealogy has undergone many changes in recent years, not only due to heightened public awareness but also the availability of information via the Internet and subsequent, often misguided, belief that an inexperienced heir hunter can produce the results of a professional company. Some older probate genealogists feel that some of the skill of old style genealogy has been lost but for most it is completing the picture and reuniting heirs with their rightful inheritance that provides the satisfaction.
For further information and advice contact Finders , 6-8VestryStreet, London N1 7RE 020 7490 4935 www.findersuk.com
About Finders Genealogists Ltd.
Welcome to Finders – a fresh approach to finding heirs. We are a leading professional international probate genealogy firm dedicated to serving those faced with the often formidable task of identifying and tracing heirs and locating missing or unknown beneficiaries.