Posted in Fairness Campaigns, For Solicitors
When probate researchers work on their own initiative they must be prepared to underwrite the entire cost of investigating an intestacy themselves. If successful, their expenses, like their overheads, will ultimately be recouped through the fees they negotiate with any beneficiaries that they locate. However, many heir hunting firms are also being paid retrospectively out of estate funds for the cost of the birth, marriage and death (BMD) certificates that they acquired during the course of their speculative research. In this article, Philip Turvey argues that this practice of double charging is unethical, unjustifiable and rife.
Probate genealogists have to purchase BMD certificates in order to track down potential beneficiaries of intestate estates. Generally, the cost of these and all other operational overheads are recovered within the contingency fee that the successful researcher receives, which is usually a percentage of the beneficiary’s share of the estate.
However, all too often we encounter situations where beneficiaries are effectively paying twice for the same certificates – once through their contingency fee and once again when the administering practitioner reimburses the researcher out of estate funds for BMD certificates and other costs.
Of course, any payment made out of the estate reduces the amount that the beneficiaries themselves receive.
Unfortunately, this seems to have become standard practice with some probate research firms, as well as with many small time heir hunters.
Limited power of attorney
Increasingly, we see individual heir hunters administering estates themselves through a limited power of attorney – despite having no qualifications or professional experience in this area. When you take a close look at the estate accounts that they draw up you’ll find that they tend to reimburse themselves very generously.
Whether it’s individual heir hunters reimbursing themselves, or authorised practitioners reimbursing probate research firms, the charge usually appears in estate accounts as “the cost of administrator’s certificates” or something similar, and relates to BMD certificates that the company or individual heir hunter originally purchased in order to research the deceased’s family and then used to prove the beneficiaries’ entitlement to a share in the estate.
Let’s pause for a minute and remember that when a beneficiary signs a finder’s fee or a percentage fee agreement, they are paying for the researcher’s work in locating them, and for future work in presenting their case for kinship to whichever authority may be acting as a custodian of the estate at the time.
The fundamental building block of this work is BMD certificates. If beneficiaries are paying for certificates twice then something is going wrong.
Charges add up
Bear in mind that these are not negligible sums. The standard service for one BMD certificate is £9.25. With the frequently employed next-day service, this increases to £23.40 per certificate. You don’t have to extend far into a family tree for this to add up. I have seen up to £400 reclaimed on some estates and doubtless there will have been even higher sums unjustifiably clawed back.
This is something we at Anglia Research always aim to challenge on behalf of clients when we encounter it. When probate researchers are already benefiting from a percentage fee agreement, the cost of certificates is very rarely a legitimate estate expense that they can recover.
I do worry that some solicitors and other practitioners are misled into making these payments. I have encountered several who insist, against all evidence, that the cost of obtaining certificates in order to establish a kinship claim in a bona vacantia case is a legitimate disbursement which the researcher can later recover from the estate. One wonders what on earth they think contingency fees pay for.
In one recent example, a well-publicised heir hunter company actually had a contribution to the costs of its various database subscriptions paid by the administering law firm out of estate funds.
In other words, the estate was paying for the overheads of the heir hunter’s business.
The company in question was also refunded the costs of certificates and wills that had been obtained during the course of its speculative research. This was all in addition to the rather generous finder’s fee that had been negotiated with each entitled relative.
It is doubtful that such unquestioning largesse on the part of the practitioner would withstand scrutiny if it were to come to the attention of regulators.
In law, I believe, it is clear that when a company works under its own initiative, and negotiates a finder's fee, these charges should not be reimbursed. As adviser to the personal representative (PR), a lawyer or accountant should inform the PR of this. By neglecting to do so, and instead masking these reimbursements within a long list of liabilities and outgoings which the PR invariably ‘approves’, they are potentially leaving their clients open to litigation.
Anglia Research is one of the few probate research companies that does not employ this method of double charging.
I can state categorically that when beneficiaries sign a finder’s fee agreement with us, the fees set out in the agreement are the only fees we will ever ask them to pay for locating them and pursuing their claim. There are no hidden costs and we will not charge twice for the same service.
We encourage other reputable firms to make the same guarantee.