At the Best. Foundation, we pride ourselves on driving change in the estate planning industry. One of the matters that we are fighting hard to change and raise awareness of is pre-paid probate.
Pre-paid probate is a service where a client will pay a set amount, ordinarily based on a percentage of the value of their estate when taking the plan out, to cover the work of obtaining probate after their death. This might sound like a great idea for anybody not wanting to bother their loved ones after they have gone. However, while taking out a pre-paid probate plan offers the peace of mind of knowing that the legwork would be taken out of the sometimes arduous process for their loved ones, the pitfalls of such plans can be missed or overlooked.
As with any legal service, it is important that professionals in the industry and their clients are aware of the risks associated with any kind of pre-paid probate plan.
We have heard reports of some advisors selling pre-paid probate plans using exaggerated probate fees to scare clients into purchasing. We have also seen adverts for vacancies for these consultants offering upwards of £1,000 in commission per plan, which is far too high to equate to a fair price for the customer. These plans also often include small print with lots of “add-on” charges, as there is no way to be sure that an estate today will be the same in 40+ years. Even for the most straightforward of estates there may be additional charges after death which belittles the whole exercise of “pre-paying” in the first place.
There are also so many variants that can affect how any individual’s estate will look that it doesn’t make sense to offer this kind of service. For example, it is impossible to predict now whether probate will be needed in the future, given that it is entirely likely that circumstances and estate values will change.
As the selling of pre-paid probate is not a regulated activity, then there is no onus on any company to protect client monies. Back in March 2022, 40,000 customers of the collapsed funeral provider Safe Hands were left out of pocket due to the lack of protection on their pre-paid monies. The huge shortfall in the Safe Hands customer account to meet the liabilities came to light shortly before the Funeral planning industry was regulated by the FCA. Customers were only able to get back a maximum of 20% of their pre-paid monies. It is both ours and many others’ fear that it may only be a matter of time before the pre-paid probate meets the same fate.
Taking the above into account, there really is little evidence that there is much reward for clients in taking out one of these plans. Thankfully, many experts are beginning to recognise this and there are increasing calls for the product to become regulated. We at the Best. Foundation are campaigning for change and previously sent a signed petition of 100 signatures to bodies such as HM Treasury, Trading Standards and the Financial Conduct Authority to call for change where pre-paid probate is concerned before it is too late. We urge any businesses to re-evaluate the worth of offering such a product and any consumers to avoid purchasing such plans for themselves. All Best. Foundation members are prohibited from selling pre-paid probate and we offer an iron-clad Client Guarantee so that they can be reassured that they are protected when instructing a Best. Foundation member.
