In short, no.

These plans have been cropping up more frequently over the last few years, with companies offering individuals the option to buy a plan during their lifetime to cover the costs of administering their estate. Professionally, I have always had issues with this: firstly, the level of work involved in estate administration depends entirely on the assets within a person’s estate at the date of their death. Placing an arbitrary figure on this years in advance always seemed like a strange proposition, and I presume must include several caveats to ensure that the provider was not left out of pocket if the estate had increased in complexity at the date of death. In my experience, the costs quoted for such policies are generally very high for what would be relatively simple matters.

In addition, the Probate Registry and HMRC have taken steps in recent years to modernise the probate application process and to make it more straightforward for family members to undertake the administration themselves if matters are simple. Not all estates need probate (this will depend on the assets in the estate and their value).

The Financial Conduct Authority have now also raised concerns around pre-paid probate plans. In particular they have flagged the following issues that consumers should be aware of:

• Pre-paid probate plans are not protected by the Financial Services Compensation Scheme. As a result, if the company fails there would be no guarantee that you or your beneficiaries will receive your money back.

• Many company’s offering pre-paid plans also pay commission which is included in the fee being paid. There is no requirement for the providers to make this apparent and the commission figure is simply incorporated into the fee.

• There are no rules requiring the money paid into plans to backed by insurance or held on trust, which would protect it if the company became insolvent and would also limit the purposes for which the company could use your money. 

• Because providers are unregulated, the Financial Ombudsman Service cannot help to resolve any complaints. As a trading company, it is still possible to report wrongdoing to Trading Standards, however the processes are much less clear and rely on illegality and not simply poor business practices.

From a practical point of view, it is also worth noting that most solicitors receive payment for assisting with an estate administration directly from funds within the estate. This means that executors and family do not need to hunt around for money to cover probate costs. Small value estates will rarely require professional assistance and so it is extremely rare for an estate to not be administered because of a lack of funds.

If you do have questions about estate administration then please contact Ashley Minott on 01494 893518 or by email.