Heir Hunters – A Warning
Last week, we were contacted by a client who had received a phone call, and then a follow up visit to their home, by an heir hunter agency.
Our client was informed that she had been traced as a potential beneficiary to a distant relative’s estate. The relative had not left a will so their estate was to be distributed in accordance with the intestacy rules. Our client was not told who the relative was, or how much their estate was worth.
The heir hunter company tried to pressure our client into signing a contract whereby the company would be paid 25% of the gross value of the estate. They told her that she must do this in order to claim her share. They would then charge 20% VAT on top of their fee, plus disbursements.
The client worked out that the relative was an aunt who had become estranged from the rest of the family. She knew that the aunt owned a house in London and that the estate was worth about £800,000.
We were shocked to discover that a company would be paid £200,000 plus VAT (£240,000) for tracing the beneficiaries in this case. The family tree was very simple. The aunt had only one sibling, our client’s father, and our client was an only child. The genealogical work involved in establishing the family tree and tracing our client should not have taken more than a day.
We advised the client that she was entitled to apply for the grant and deal with the estate herself. There was no need to sign the contract with the heir hunter agency or to pay them any fees.
Assuming that the estate is worth £800,000 then after deduction of Inheritance tax of £190,000, our client would have received £470,000 and the company £240,000.
If our client had had a sibling, the siblings would have received £235,000 each, less than the total fee paid to the company.
Fortunately, in this instance the client was able to seek advice in respect of the heir hunter’s contract before signing away a considerable share of her inheritance. However, this case does serve as a warning to anyone who is contacted by an heir hunter agency. It is important to consider any contractual arrangement that an heir hunter agency may propose very carefully. Heir hunter agencies remain largely unregulated in the UK and unscrupulous practices, as shown here, are not uncommon.