STEP Briefing Note: Personal Representatives and Trustees - Genealogists fees
This STEP Briefing Note sets out some issues
to consider when a personal representative (PR) hires a genealogist
to find heirs. If you are acting as a PR of a deceased person
you will be personally liable to the true beneficiaries in the
event of an incorrect distribution of the estate. Therefore
it is your duty to take reasonable steps to find all those who are
entitled and it may be necessary to employ a genealogical research
firm to achieve this.
It is the responsibility of a PR to select the
most suitable research approach to employ. A number of
commercial firms offer this service and there is a range of fee
options currently available. Search costs are commonly a general
estate expense however, there are circumstances when this will not
be the case, and PRs must also consider whether it is more
appropriate to pay the costs of research from the entire estate or
whether such costs should be deducted from any specific heirs’
portion particularly if there are undiscovered heirs.
It is good practice to obtain a range of
quotes from genealogists and you should be fully aware of the
different options available including time-based, contingency or
fixed fee options.
A summary of fee options and their
The “Fixed Fee” option
Fixed fee options are set fees agreed in
advance and in some cases may be payable only if a pre-determined
goal is achieved. This may be to find the heirs, verify an
existing family tree or to prove negatives. Such fees may be
refundable if the goal is not achieved. Fixed fees are
normally payable within a short period of receiving the report from
The benefit of fixed fees is that PR’s are
aware of the cost of the work in advance regardless of the actual
time taken. The disadvantage is that the genealogist may not
be able to complete the work for the agreed fee, although this can
be mitigated by agreeing that a refund will be made if this occurs.
Alternatively the work may turn out to be less than expected but
the fee may not be reduced.
Time-based fees are charged according to the
actual time spent, normally on a per hour basis, which is recorded
and billed. In addition, out-of-pocket expenses incurred in
providing the service, including copies of any certificates, Wills
and Grants required, may be charged. The benefit of such an
approach is that the cost is consistent with the time spent.
The disadvantage is that the fee will increase as the work
escalates and it may be unclear when the genealogist is originally
commissioned how much time will need to be spent. Particularly in
relation to smaller estates a PR will have to balance uncertain
cost against the amount a beneficiary may receive.
Under beneficiary contingency fee
agreements, once the genealogists have undertaken the research,
they come to an agreement with each beneficiary they identify
whereby the beneficiary agrees that the genealogist is to be paid a
share of their entitlement when the estate is
The advantage is that known relatives of the
deceased do not directly suffer the expense of tracing relatives
that have lost touch with the family. As the fee is a
percentage of the assets distributed to unknown relatives the costs
will not directly impact upon known relatives. The share of an
estate that passes to known relatives may reduce depending upon the
success of the genealogists,
particularly if there are many lost
The disadvantage of this approach is that,
particularly in the case of large value estates, the fee may be not
be proportionate to the effort that was required. Moreover,
there may be difficulties if a PR has instructed researchers
without the involvement of all known beneficiaries.
A PR would need to be confident that a
contingency fee was likely to be less expensive than a fixed
or time-based fee structure. Generally PRs should not enter
into any agreement which deducts fees from one or more
beneficiary’s individual share rather than the residue as a whole
without careful consideration.
The appropriateness of the contingent charging
structure is not accepted by some commentators and there has been
much comment on the contingent fee basis in both the professional
and general press. It would be good practice to familiarise
yourself with the legal arguments for and against such fees in
order to protect yourself from any possible claim.
The PR should be satisfied that any charges
agreed with the chosen research organisation are clear, represent
good value for money and are appropriate to the circumstances of
the particular estate.
Some articles which have been published on the
issue of Contingency fees include:
Contingency fees: Lawful, Charles Fraser TEP, STEP Journal
November-December 2009 (see also http://www.stepjournal.org/default.aspx?page=1648)
Contingency fees: Unlawful, Constance McDonnell TEP, STEP
Journal November-December 2009 (see also http://www.stepjournal.org/default.aspx?page=1654)
All information contained in this Briefing Note is of a general
informational nature and is intended to be helpful. It does not
represent legal advice. Whilst reasonable endeavours are taken to
ensure that information is accurate and up-to-date as at the date
of publication, STEP and its contributing authors do not accept
liability or responsibility for any loss or damage occasioned to
any person acting or refraining from acting on any information
contained in this Briefing Note.
Specialist legal or other professional advice should be sought
before entering (or refraining from entering) into any specific
transaction. This Briefing Note is not intended to be directional
in nature but informative.
Please also refer to the STEP