Not many people have heard anything about commercial heir tracing. So it's hardly surprising that many who are contacted for the first time react with suspicion and even hostility. We would like to consider the following most frequently asked question.
The starting point of heir-tracing inquiries are unresolved probate cases involving estates with positive assets. Such estates are often administered by the deceased person's estate curators or other legal representatives. In difficult cases, such agents commission specialised heir tracers if their own means are insufficient to find members of the family in question or any beneficiaries at all. The services of heir tracers are also retained if the inheritance documents required for issuance of a certificate of inheritance - in most cases from other countries - cannot be procured.
In other cases, heir tracers are hired by private individuals, lawyers or executors. In these cases, the individual co-heirs are often known and heir tracers are engaged to clarify unresolved genealogies or to complete the community of heirs and inheritance documentation.
If probate courts have not been able to find beneficiaries, the courts can call in specialised firms, which have much more know-how in finding unknown heirs.
If the heirs in inheritance cases are unknown, as a rule, the probate court appoints estate curators to secure and administer the estate and to trace the heirs. Thus, the estate curator will, within the framework of his possibilities, also handle tracing orders. Tracing heirs is often time-consuming and the results are uncertain. It requires special know-how, skills and contacts (see occupational profile), which specialised heir tracers have.
It is therefore in the interests of the unknown persons concerned that estate curators don't simply decide to file for estates to be deposited, but instead commission professional heir tracers to conduct further inquiries. If the heir is not aware of the death of the testator and/or of his status as an heir, court deposition of the estate that is often otherwise practiced is of no avail to him either. After 30 years, the deposited estate devolves upon the state treasury.
No. Heir tracers act only in cases involving positive net estates. The intrinsic value of the estate will have been checked by the probate court/the estate curator and, if applicable, by the heir tracer himself before the heir tracer starts work on a case. This also ensures the success of contingency fee work based on a percentage of the value of the estate. In the case of an insolvent estate, the heir tracer would receive no remuneration for his work and for this reason he would not work on the case.
Whereas the distributive shares/disbursement amounts may vary considerably between individual heirs due to varying estate values and the number of heirs involved, the plus on the account is guaranteed.
The advantage for the heir of the success-based fee agreement is that it is a risk-free all-in-one package. Apart from the investigative services involved in finding the estate, the heir is provided with competent support over the entire process until disbursement maturity is reached. Since the fee is only a percentage of the concrete distributive share, it can never exceed the distributive share (see question 10). By contrast, the heir tracer bears the entire risk until the conclusion of the process.
Conversely, with the fee agreement, the heir guarantees the heir tracer a remuneration entitlement and obtains access to the heir-tracing results, i.e., in most cases an exciting insight into his own family history.
Fee agreements should contain clear and understandable contractual provisions. Four points are essential for assessing the contract offered:
In addition, the agreement must, of course, contain further contract particulars, including information on the contracting parties with complete addresses, contact data and authorised representatives.
Since fee contracts between the heir tracing office and the heir are consumer contracts, the contract must always contain the revocation instruction prescribed by law.
If they accept the order, the heir tracers undertake to conduct the inquiries at their own cost and risk, expressly stating that this will not be done at the expense of the estate. That is, search and documentation costs accrue even before the heir tracer knows if any heirs can even be found and if the inheritance certificate process can be conducted successfully. What's more, the duration of the inquiries (the average processing time is approximately three years) and their costs are not known.
The above-mentioned cost risk, the failure rate (i.e. if the inquiries bring no results) and the long process duration are the main reasons why the usual fees charged by heir tracers are considerably higher than those in other professions such as realtors. In numerous court rulings, it was found that fees of up to 30% of the estate charged at home and even higher rates abroad plus value-added tax are common and legitimate (see jurisdiction or usual remuneration amount).
A success-based fee agreement, in turn, is advantageous to the heir. Be the distributive share large or small: "It is not only the heir tracer's fee that grows […] with the value of the estate, but also the amount that the heir inherits, so that even if he has to pay a higher fee when the estate is large, he still gets a greater capital gain …". (cf. opinion of the regional court of Berlin, file No. 35.O.423/01). In any case, a fee agreement within the common framework ensures that the heir tracer costs can never be higher than the heirs' distributive share of the inheritance itself.
The heir tracer acquires a claim to remuneration only if it is based on a valid fee agreement. If, prior to contract conclusion, he reveals information that enables the heir/heirs to represent their interests themselves, he no longer has a claim to any remuneration or reimbursement of expenses (see jurisdiction: On the need for concluding a fee agreement).
Thus, it is not a sign of untrustworthiness or even of a fraudulent act when heir tracers do not provide information on certain aspects of a case. This includes information on the testator, his last place of residence, probate court, the estate curator or other client.
As a rule, fee agreements of legitimate heir tracers are understandable and clear. The contractual provisions are clearly defined and present no difficulties even to persons not conversant with legal matters. See question 5 regarding the content of the agreement and its essential components.
If, despite this, there are any uncertainties or open questions, a consultation with a competent lawyer can be helpful. In view of the large number of lawyers and fields of law, it is advisable to make sure that the lawyer specialises in questions relating to inheritance law.
These costs to the heir/heirs arise in all inheritance certificate proceedings, i.e., regardless of whether an heir tracer is involved or the proceedings are conducted by the heir himself.
The amount of these fees depends on the estate value. They are collected for the notarisation of the inheritance certificate application (in most cases by a notary public) and the issuance of the inheritance certificate (by a court).
Initially, heir tracers defray these costs on behalf of the heirs. At disbursement maturity, these costs are reapportioned within the framework of an inheritance distribution procedure corresponding to the inheritance shares of the individual heirs, so that each hair also pays his share of the costs corresponding only to his distributive share of the inheritance.
No. The estate duty under the relevant legal provisions is payable regardless of whether you have proved your heir status without any help, with the help of an heir tracer or with that of a lawyer.
The estate duty, too, is calculated on a percentage basis corresponding to your distributive share of the inheritance after deduction of the tax allowance applicable to the tax category in question. If the amount of the inheritance share is below that of the tax allowance, no tax is levied at all. The current tax allowance for tax category II (distant relatives) is €20,000.
Heir tracer fees are taken into account in full when determining the estate duty. Only the balance remaining after deduction of the heir tracer fee is used as a basis for calculating the estate duty. This reduces the amount of duty to be paid. The fee is always calculated on the basis of percentage of the distributive share of the inheritance. The major share goes to the heir. Hence, the inheritance cannot be "eaten up" even if an additional estate tax is to be paid apart from the fee.
The object of heir tracing are sensitive personal data. They are subject to data privacy provisions and are therefore not accessible to everyone. A proper mode of work is based on the assumption that the heir tracer is legally authorised to access such information and to receive civil status documents.
As a rule, such authorisation is granted by the competent estate curator, legal representative or other authorised person. But even private individuals who requires support in clarifying inheritance issues can grant such power of attorney.
Heir tracers and lawyers belong to two entirely different professional groups, between which there is a very small interface. It goes without saying that heir tracers, too, have a sound professional knowledge in the field of inheritance law. However, most of their activity involves researching genealogical connections in registry office, church and other sources. Many heir tracers have libraries, archives and data banks as well as contacts at home and abroad, which they have built up over many years in order to be able successfully to conduct investigations and to create the prerequisites for the inheritance certificate process. Most of the time, this entails painstaking and time-consuming work, which even a well-versed lawyer cannot do in most cases. In individual questions revolving around inheritance law, heir tracers work with specialised lawyers and notaries public.
The two professional groups are not comparable with regard to remuneration either: lawyers normally do not work on contingency fee basis, instead, they charge fees in accordance with the Rechtsanwaltsvergütungsgesetz (RVG) (legal counsel remuneration code), Kostenordnung (KostO) (cost regulation) or based on an hurly rate; often they even require their clients to pay in advance. Hence, they demand payment of costs irrespective of success or failure of the case.
Heir tracing bureaus prepared to abide by the codex of honour, have joined together in Verband Deutscher Erbenermittler e.V. (registered association of German heir tracers). Only those heir tracers can join this association, who have distinguished themselves through years of serious and correct work.
Moreover, the members do voluntary work designed to further the image of the profession and safeguard the interests of heirs.
Moreover, the association acts as the superior authority vis-à-vis its contractual partners in questions that might arise in connection with an inheritance matter. In this manner, based on the code of ethics, heir tracers (VDEE) guarantee reliable investigation results, a maximum measure of certainty of a successful outcome of the proceedings and a correct winding up of the estate.