Emergence of pre-paid probate plans sets alarm bells ringing

A Cheshire-based wills and probate solicitor has voiced concerns over the emergence of pre-paid probate plans.

Kristel Clarke, a member of the probate department at Warrington-based Watsons Solicitors, knows that some people will not need to apply for probate, with some banks releasing up to £50,000 without it.

Probate is the legal authority required to manage someone’s estate when they pass away. Yet the process is not ‘one size fits all’, instead fluctuating depending on the value and complexity of the estate.

Any assets jointly held by a married couple automatically passes to the surviving spouse.

A pre-paid probate plan reviews an entire estate with pricing calculated by a bespoke algorithm. 

There is the risk that a company offering a pre-paid probate plan will cease trading before the need to utilise the service, with no consumer protection if something goes wrong because the market is unregulated by the Financial Conduct Authority (FCA).

Kristel believes the pre-paid probate market comes with plenty of negatives, and no obvious positives.

She said: “What if the company goes under? You just don’t know what will happen further down the line and people could lose thousands if a business ceases trading and doesn’t have enough money to refund customers.

“Any delays in the process can also mean family members are unable to access funds to settle bills or sell property.

“Will a family even need probate in the first place? Banks have their own limits on how much they will pay out without probate being applied for.

“I worry about how much advice people are receiving before they are taking pre-paid probate plans out from unregulated companies.”

Kristel insists that the fact-specific nature of probate makes it difficult to justify taking out a pre-paid probate plan.

“A lot of elderly and vulnerable people start thinking about life for their families after they’ve gone,” she continued. “It’s so important to seek advice though.

“While many cases are straightforward, there are the more complicated situations where there are lots of properties and bank accounts, which require more time.

“It is a difficult time and people do look into how it can be made less stressful, but pre-paid probate is not something worth considering in my opinion.”

Kristel is also keen to stress that the need to apply for probate is not a cause for concern.

“People seem to think that having to apply for probate is a negative and that something must have gone wrong,” she said. “It’s absolutely not a negative. 

“In fact, it means that there are assets that need valuations and that is a good thing. I am keen to provide this advice when talking to people about wills.

“It’s important to get away from the stigma associated with probate.”

To speak to someone at Watsons Solicitors about probate, please contact enquiries@watsonssolicitors.com or call 01925 571212.

Watsons Solicitors, which has been established for more than 60 years, specialises in family law, employment law, wills and probate, and conveyancing.

The team of experienced solicitors holds various accreditations and memberships of professional bodies relevant to their expertise, while the firm’s partners oversee all areas of work.