Pre-Paid Probate Plans – Are They Too Good To Be True?

Have you ever heard of a pre-paid probate plan? It’s ok if not, as not many people have. In fact, on a recent LinkedIn poll, I asked exactly this question and over 70% of people had not come across the term, including those who work within the Wills and Probate sector.

“Probate” is the legal authority issued by the Court in favour of the Executors/Administrators of an Estate, which allows them to manage the affairs of the deceased in accordance with the terms of their Will or the Rules of Intestacy.

People often worry about the costs of applying for Probate, especially when considering Solicitor’s fees. The Court Fee is currently £273 plus £1.50 for every office copy, in cases where the value of the Estate is over £5,000 and solicitor’s costs can be fixed or charged at an hourly rate. Some solicitors (though not Wilson Browne Solicitors) do also charge an “uplift” being 0.75% of any real property and 1.5% of all other estate assets in addition to their other costs.

It is important to note, however, that the Solicitors Regulation Authority (SRA) require solicitors to be transparent with their costs when dealing with Probate, so you should receive a quote for the same and be given the opportunity to review costs throughout the process.

It seems no wonder then, when considering the above, that there has now been a flurry of activity in the world of Probate and “pre-paid probate plans” are being offered by some companies.

The idea of a pre-paid plan is for an individual to pay the company in question their set fees for Probate in the hope that following their death, their families will not be required to pay anything else as it has been paid upfront. The companies offering this service confirm that the funds are held in Trust until the individual has passed away and then the funds will be released to cover the costs of the company dealing with Probate.

However, as good as it sounds, is it too good to be true? Generally speaking, yes, it probably is. There are many downfalls associated with pre-paid probate plans, one of the most important being that the companies dealing with them are not regulated!

Any company that has a mind to, can set up an arm of their business offering probate services and the lack of regulation can cause some serious issues. No regulation means that there is no protection offered if and when something goes wrong. In addition, there is no oversight in where and how the funds are held and we have discovered that several companies offering these services have been struck off or have gone into liquidation – this means that unless there were funds available, people who have paid for the pre-paid plans will not be offered any refund and have lost thousands of pounds. These monies had initially been paid over to protect their families from costs rising in line with inflation, but sadly the money has been lost and there was no protection offered in the first place.

Claire Davis, Director of SFE (Solicitors for the Elderly), said “The issue with pre-paid probate plans is they don’t take into account the complexity of a person’s estate or family issues that can come to light after death. Have the right questions been asked? … We would urge people to take real care when choosing a firm to support them with things like wills, powers of attorney and probate. You wouldn’t go to a heart surgeon for a broken leg or a hairdresser for a wedding dress. It’s absolutely vital to go to a specialist to get the right support and the same applies to legal services…”

Ms Davies also likened the plans to getting cheap Wills, which is another unregulated service, and she rightly said that not seeking expert advice in the first instance can become significantly more costly for the individuals of their families following death.

Companies that offer these services are quite often not experts or specialists in the Probate sector, whereas solicitors are. In addition to this, solicitors are regulated by the SRA and have insurance in place to protect their clients.

However “simple,” you think your Estate is, it is vital to speak to an expert in Wills and Probate and take the right advice, particularly when considering tax and other complications that can arise. It is so important that you research the company you want to use, as a lot of the information that can raise red flags is available for the public to view online.

Wilson Browne Solicitors specialist Probate team are available for you to speak to at any point and all costs will be made clear to you upfront. We do not offer a pre-paid probate plan, because more often than not, we can never be sure you will need to have Probate granted until after your death – so we do not take money from you for a service that may not be required!