The Heir Hunters Association : Negotiating with Heir Hunters : Genealogy for Intestate and Probate Research

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Negotiating with Heir Hunters

Been approached by a Heir Hunter who tells you that you are in line for an inheritance from a deceased relative whom you potentially do not know?

They might telephone you one day, or write to you, or just turn up unexpectedly at your front door.

Most peoples first reaction is one of suspicion that the contact is a typical scam designed to get you to pay money up to cover "fees and expenses" or worse still steal your identity.

Once the Heir Hunter has outlined a little more and explained they have traced you as a possible beneficiary of a deceased relative's estate under the rules of intestacy, you begin to get less cautious and more excited.

All things are still not clear, for example how much is at stake and what proportion of the money might you get. It maybe that even the Heir Hunter may not know all the answers. Their quest is to get you to sign up agreeing to pay them a commission if and when you become entitled to a cut of a possible fortune.

If you are the first relative traced you may remain the only one located and thus sole beneficiary. Or have to share with several or even dozens of other relatives in your family tree you probably have never heard of.

Worse still, later the Heir Hunter may find other relatives, as the chart below shows the intestate's death creates a list of priority beneficiaries starting with their spouse. Only LIVING relatives can inherit, but chances are that someone will. Very few cases have no relatives as family trees are complex and ever changing as new babies are born, and people die.

The chart shows the relationship to the deceased (intestate):

Assuming you find yourself in the family tree you may be faced with giving the Heir Hunter 10-30% + VAT commission as a finders fee which may be a huge chunk of your new found fortune.

Before signing it is vital to discuss terms and read the offered contract in detail. Key elements to watch for are:

The rate of commission typically 10-30% - is it fair, consider offering a lower rate.
Is VAT chargeable? - some small one person Heir Hunters are working part time and do not need to be registered to charge VAT, a big saving.
Is there a minimum fee? if so this could wipe out your inheritance if the amount of the estate is small and there are many other beneficiaries.
Is there a maximum fee? if you are the sole beneficiary of a large estate paying 20% + VAT (23.5% on current rates) the amount due to the Heir Hunters could be unrealistically large.
Look for tiered commission which reduces as the value of the estate due to you increases, see these examples.
The chart below shows 3 different value estates, each with 5 beneficiaries of equal share, with 4 different ways by which Heir Hunters may charge commission.
A smaller Heir Hunter firm who is not registered for VAT, and working with lower overheads would find commissions attractive even at the "lower end."
Remember even if you do not sign, you may get a pay out later, but there is a danger you may remain "unknown" . Estates may be closed off and you excluded, however it is normal to INSURE in case a beneficiary later emerges with a claim against the estate.

Estate Size	£100,000	£100,000	£100,000	£100,000
Beneficiaries (equal shares)	5	5	5	5

Commission %	30	20	10	20
On over 100,000				10
On over 200,000				5
Total Commission	£30,000	£20,000	£10,000	£20,000
VAT	£5,250	£3,500	£1,750	£3,500
Total Commission	£35,250	£23,500	£11,750	£23,500
Your Share 1:5	£12,950	£15,300	£17,650	£15,300

Estate Size	£200,000	£200,000	£200,000	£200,000
Beneficiaries (equal shares)	5	5	5	5

Commission %	30	20	10	20
On over 100,000				10
On over 200,000				5
Total Commission	£60,000	£40,000	£20,000	£20,000
VAT	£10,500	£7,000	£3,500	£3,500
Total Commission	£70,500	£47,000	£23,500	£23,500
Your Share 1:5	£25,900	£30,600	£35,300	£35,300

Estate Size	£1,000,000	£1,000,000	£1,000,000	£1,000,000
Beneficiaries (equal shares)	5	5	5	5

Commission %	30	20	10	20
On over 100,000				10
On over 200,000				5
Total Commission	£300,000	£200,000	£100,000	£50,000
VAT	£52,500	£35,000	£17,500	£8,750
Total Commission	£352,500	£235,000	£117,500	£58,750
Your Share 1:5	£129,500	£153,000	£176,500	£188,250

No one would, and maybe should deny a Heir Hunter a fair return for the time taken to trace down beneficiaries and the risk they take working on a "no win, no fee" basis, but eventual commissions should still remain fair and reasonable.

Maurice Clarke is founder of the www.heirhunters-association.org.uk

More articles by Maurice and other expert authors

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