Should heir hunters be allowed to charge up to 40%? It's not surprising that the heir hunters themselves usually say, "Yes." However, many people in and out of the legal profession disagree.
"Heir hunters" look for lost heirs: people who have inherited money but don't yet know about their inheritances. Heir hunters may be freelancers, or they may be employed by the deceased person's estate. They typically are experienced genealogists who look for the heirs.
Once found, the new heirs are typically told they have inherited money but are not told the amount or the source. Instead, the heir finders will tell the heirs, “We will not tell you what we know unless you sign this agreement to give us 30%.” A fee of 30% is typical but might be as low as 20% or as high as 40%, depending upon what the heir hunter thinks he or she can get away with.
The fees are known as contingency fees but are very different from contingency fees charged by lawyers in lawsuits. Professor King, principal lecturer at the (U.K.) College of Law, states, "The only reason that you have contingency fees in litigation is that people don’t have any money to fund litigation upfront. Therefore, you have to do a deal with a lawyer if you’re going to get any kind of legal representation. Plus, to an extent, the lawyer takes the risk, and that’s why they get these inflated fees if they win."
By contrast, in the case of probate research companies, as the academic argues, "Here you have an estate with money in it. You have a personal representative whose legal obligation is to find the people who are entitled to the money, and the cost of doing so comes out of the estate. It is completely reprehensible that anybody is saying they will find these people and they will then take 30% of their share."
You can read a lot more about this controversy in an article by Jon Robins, published in the Law Society Gazette at http://www.lawgazette.co.uk/features/the-controversial-business-tracing-beneficiaries-unclaimed-estates. The article focuses on heir hunters in the U.K., but I believe that heir searches in the U.S. are quite similar.