STEP highlight risks of heir hunter 'contingency' fees

14 July 2011

The Society of Trust and Estate Practitioners (STEP) has taken the unusual step of issuing guidance to 6000 of its UK members on the risks associated with percentage fees (or 'contingency' fees) charged by heir hunters.


The guidance (issued on 7th July 2011 - see link below) follows a long running 'Fairness Campaign' by Title Research, calling for an end to excessive heir hunter fees charged as a percentage of each beneficiary fees charged by so called 'heir hunters'. The campaign has over 40 expressions of support from solicitors on the Title Research website.

Whilst the STEP guidance sets out advantages and disadvantages to different charging methods used by probate genealogists, the briefing note highlights seven issues in relation to percentage fees. STEP highlight that 'the appropriateness of the contingency charging structure is not accepted by some commentators.' STEP also highlight that 'there has been much comment on the contingent fee basis in both the professional and general press.'

Under contingency fee agreements, once the genealogist has undertaken the research, they come to an agreement with each beneficiary whereby the beneficiary agrees that the genealogist is paid a percentage of their entitlement when the estate is distributed. Concerns have been raised in the media about heirs being asked to sign away a percentage of their entitlement without any indication of the cost of the heir hunter fees in pounds. Concerns have also been raised in the media about heir hunters who withhold the name of the Deceased until the heir agrees to sign away a percentage of their share.


STEP warns that 'contingency' heir hunter fees may not be proportionate to the effort required to find missing heirs. Moreover, STEP caution trustees about potential difficulties for the PR if a researcher has been instructed on a contingency fee basis without the involvement of all known beneficiaries.

Trust and estate practitioners and Personal Representatives (PRs) are urged by STEP to familiarise themselves with the legal arguments for and against such heir hunter fees in order to protect themselves from claims made by heirs who may feel they have been overcharged.

STEP advises PRs not to enter into any agreement that deducts heir hunter fees from each beneficiary’s individual share rather than the estate as a whole 'without careful consideration'. Costs incurred to administer an estate, including probate solicitor fees, are usually paid out of the estate as a whole.

STEP concludes by advising that a PR should be satisfied that any charges agreed with the heir locator firm are clear and represent good value for money.

David Harvey CEO of STEP said: 'There has been a significant amount of debate amongst advisors regarding the efficacy of genealogists fee arrangements and we hope this new STEP briefing note will help those personal representatives looking for lost beneficiaries.'

David de Menezes, Head of Communications at Title Research said: 'Title Research welcomes this briefing note from STEP. Most people reading this guidance will draw the conclusion that 'contingency' fees carry far more risk than any other charging method.'

'We have received some shocking complaints about percentage 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.'


Read STEP Briefing Note on Genealogists Fees - 7July 2011