When trust officers and probate attorneys file public intestate estate notices, percentage-based heir search firms often act quickly, charging high commissions that can compromise the estate and create fiduciary risks for the attorneys involved. These firms, which typically take 30% of the heir’s inheritance, were scrutinized by the U.S. Department of Justice for misleading practices. In contrast, non-percentage-based firms, like Heir Pros, offer transparent, hourly-based fees, providing a more ethical and cost-effective option for finding heirs while preserving the estate’s value.
Once trust officers and probate attorneys file public record intestate estate notices, heir hunters hit the ground running to reap windfall profits. These percentage-based heir search firms have become a nightmare in intestate succession as they pre-empt due process and put the attorney at a fiduciary risk.
In fact, their conduct was the subject of a U.S. Department of Justice (DOJ) investigation after cases of unfair practices and misleading tactics.
As a result, probate professionals are advised to exercise caution when filing intestate notices and selecting the best search firm to locate a missing or unknown heir.
But what are the different heir search firms and how do you choose the best one for your case? Read on to find out.
Percentage-based Heir Search Firms
These firms get their name from their fee structure which involves a percentage of the estate meant for the unknown heir. The heir finder fees typically average 30%, so the beneficiary would have to part with about $300,000 in the case of a $1 million estate.
The success of these firms depends on these three pointers:
- Preemptive Heirs Search: Once they notice an unclaimed or intestate estate, they strive to find the rightful heirs without the knowledge of the involved probate professionals and convince them to sign a search contract in return for a commission. However, they rarely disclose to the heir the estate value, but promise to help them receive their share quickly.
- Shuts out Competitors: Once they dupe the heir into signing the contract, they recommend a law firm to liaison with in the pursuit of the unclaimed estate. They usually recommend a firm they have a working relationship with and which immediately sends notices to trust officers and probate attorneys confirming that they’ve identified an heir and are in the process of compiling proof of heirship.
- Secrecy: Receiving such a notice as an attorney betrays efforts to consult other search firms. Besides, such a letter from law firms blocks the probate professionals from accessing the details of the agreement they have with the heir.
The Controversy in the Percentage-Based Heir Hunters
Heir hunter’s percentage-based approach controversy prompted the 2016 DOJ review of the practice, given that it exploited innocent heirs and operated in secrecy.
While many argued that most heirs may not know about the awaiting fortune until they’re contacted by heir hunters, withholding information about the inheritance until they sign a contract puts them at a distinct disadvantage.
Besides, the average 30% commission is seen as exploitive, especially when dealing with large estates and simple forensic genealogy.
For this reason, states have reviewed the maximum percentage a search firm can charge for a given estate value. They also grant courts the latitude to modify agreements signed in these arrangements, especially if they are unfair or the heir lacked full understanding and representation.
Non-percentage-based Search Firms
The non-percentage heir search firms are the exact opposite and are also called hourly-based fee firms or set-fee locators. They are the superior alternative as they bill their clients based on the nature of the research required, never on the size of the trust.
These firms operate on the following basis:
- Advance Fee Quote: Firms like Heir Pros offer an hourly-based fee structure regardless of the value or size of the estate. They provide a free quote calculator to help assess the complexity of the search requirements and determine the approximate hours you may order.
- Court Authorization: A non–percentage fee-based heir search firm then presents a written fee proposal to the estate administrator to obtain a court order confirming it as the official heir hunter for the estate.
As a result, no other firm, percentage based or not can claim to act on behalf of the heir.
Which is the best Heir Search Firm?
While both the percentage based and the non-percentage-based probate research firms help locate heirs, they vary in the methodology and pricing. The best choice for your case should be guided by the fiduciary duty, which is acting in the best interest of the heir.
In this case, consider the option that respects the rights of the heir and leaves most of the estate intact.
For example, it might take Heir Pros experts about 20 hours to find an heir to a $100,000 estate. At an hourly rate of $111, this would translate to a fee of about $2,226. However, a company charging a 30% commission on the same search would cost the estate upward of $30,000.
This amount would increase in estates of higher value while the hourly rates would remain substantially low.
Furthermore, heir-hunter firms may not be interested in small value estates or cases involving many heirs as their passion is driven by the size of the commission.
How to Select an Heir Search Firm
With the non-percentage-based heir search firms being the superior alternative you still need due diligence to get the best results.
Below are considerations and necessary steps when selecting a probate genealogy firm.
Services Offered: Ensure your chosen tracking firm offers the services you need in the probate process.
Some of the crucial services include;
- Probate genealogy
- Estate documentation:
- International heir searches
- Court-ready documentation
- Full report of findings
- Witness statements
Pricing: Before authorizing a search, obtain a price quote from the probate genealogy firm with an upfront, transparent, and hourly-based rate.
Duration: Understand the realistic duration that finding an heir in your case may take to help gauge the different pricing packages and align with the ongoing probate process.
Check Reviews: Read reviews about your heir search firms to get a glimpse of what to expect and the success rate in finding heirs.
Contact Heir Pros Today
Contacting Heir Pros as soon as you realize you need assistance will help you decline services from a percentage-based heir hunter and prevent them from approaching the heirs.