Heir hunters

Roman Blum died in Staten Island in January 2012, aged 97. He was a Holocaust survivor who became a real estate developer. His ex-wife had died in 1992. There were no children, and there was no will. What he left behind was reported at roughly $40 million — described in coverage of the case as the largest unclaimed estate in New York's history.

An eighteen-month international search for heirs followed. It found nobody. New York's public administrator, professional genealogists, journalists, and volunteers all failed, and the money moved toward the state comptroller's office of unclaimed funds, where it can sit indefinitely against the possibility of a proven heir who has not yet arrived.

That is the negative image of an entire industry. The heir hunters — the trade calls itself probate genealogy or, in American antitrust filings, heir location services — exist because the Blum outcome is expensive and avoidable more often than people assume. Somebody reads the intestate filings, builds the family tree, finds the second cousin in Lisbon who never knew the decedent existed, and offers to prove the relationship in court in exchange for a share.

It is a legitimate business, it is regulated unevenly, and it produces two reliable emotional reactions: gratitude from people who received money they did not know existed, and unease at the arithmetic — because the percentage is negotiated at the exact moment the heir knows least.

Where the leads come from, and what the fee looks like

Probate genealogy runs on public information that most people never look at. Intestate estates are filed in open court. Public administrators publish appointments. Unclaimed property rolls are searchable. And in England and Wales, the government simply publishes the list.

The Bona Vacantia Division of the Government Legal Department administers estates in England and Wales where a person dies without a will and without known family, for estates over £500 — with the Duchy of Cornwall and the Duchy of Lancaster handled separately. It publishes a searchable unclaimed estates list, distributed as a downloadable CSV file. Anyone can open it in a spreadsheet. That list is the raw material of the BBC's long-running Heir Hunters, and of the firms that appear on it.

The UK claim rules are specific, and they explain the industry's urgency.

• Twelve years, with interest. Claims made within 12 years of the completion of the estate's administration are accepted, and interest is paid on the money held.
• Thirty years, absolutely. No claim is considered 30 years after the date of death. For pre-1997 estates the division accepts claims up to 30 years from death, without interest after the 12-year point.
• The proof is a family tree. Claimants must supply a tree showing the relationship, with dates of birth, marriage, and death for everyone in it, plus full birth certificates naming parents and the relevant marriage certificates.
• The fee is a percentage, negotiated privately, and it varies enormously by jurisdiction, by estate size, and by how hard the research was. Where the fee is unregulated it is a matter of contract; where it is regulated, the cap is the whole protection.

The good version of this business is genuinely valuable: research nobody else was going to do, at the researcher's own risk, producing money that would otherwise have gone to a government. The firm is paid nothing if it finds nothing, and the heir pays nothing out of pocket. The bad version is the same transaction with an unnecessary percentage attached — most obviously where the money was already sitting on a free public database under the heir's own name.

United States v. Kemp & Associates

On August 17, 2016, a federal grand jury indicted Kemp & Associates, Inc., a Utah corporation, and Daniel J. Mannix, its chief operating officer, on one count of violating §1 of the Sherman Act. The Department of Justice's Antitrust Division alleged that they had conspired with a competitor to allocate customers of heir location services sold in the United States between 1999 and 2014.

The charging documents describe the business in the plainest available terms: heir location services “identify heirs to estates of intestate decedents and, in exchange for a contingency fee, develop evidence and prove heirs' claims to an inheritance in probate court.” In an allocation agreement, the competing firms stop competing for the same heirs — which, in a market where the customer is a person who has just learned they may inherit, means the customer never finds out what a second quote would have looked like.

The case went sideways procedurally before it resolved. The district court held that the alleged conduct should be assessed under the rule of reason rather than treated as a per se violation, and dismissed on statute of limitations grounds. The government appealed. In United States v. Kemp & Associates, 907 F.3d 1264 (10th Cir. 2018), decided October 31, 2018, the Tenth Circuit reversed the limitations ruling and directed reconsideration of the rule-of-reason determination.

On July 11, 2019, both defendants pleaded guilty in the United States District Court in Salt Lake City. The Department of Justice announced that Kemp & Associates agreed to pay a $1.53 million criminal fine and Mannix a fine of $77,595.93.

It is the only criminal antitrust prosecution most people will ever encounter involving genealogists. It is worth knowing about for one reason: it establishes, on the record of a federal court, that this is a market — with competitors, prices, and customers who can be divided up.

Who may do this, and for how much

American regulation of heir finders is a state-by-state patchwork, and Florida's is among the more specific. Two sections do the work, and both sit in the unclaimed property chapter rather than the probate code.

Fla. Stat. §717.1400 decides who may register with the Department of Financial Services as a claimant's representative and file claims for other people. The list is short: licensed private investigators holding a Class “C” licence, Florida-certified public accountants, and attorneys licensed in Florida. Registrants must supply licence details, identification, banking information for electronic transfer, and a tax identification number, and must notify the department within 30 days of any surrender, suspension, or revocation of a licence. Firm names may not suggest government affiliation — no “Bureau,” no “Division,” no “Department,” no “Florida” or “United States” in a way that implies official status.

Fla. Stat. §717.135 governs the agreement itself. Total fees and costs are capped at 30% of the amount claimed; an agreement providing for more is reduced to 30% and the balance goes to the claimant. The agreement must be on the department's own authorised form — anything else is void. It must disclose the total dollar amount of the accounts claimed, the total percentage of authorised fees and costs, the specific dollar amounts to be deducted, the net amount to the claimant, the account numbers, the payment timeline, and the representative's contact and identification details. And it may not be made irrevocable, and may not assign any portion of the unclaimed property held by the department.

Florida's escheat statute contains the parallel provision for estate proceeds. §732.107 allows the Department of Financial Services to distribute escheated proceeds directly to an attorney, accountant, or licensed private investigator where the entitled person has assigned the right under a written agreement — the funds to be held in a trust or escrow account at a Florida financial institution and paid to the client within 10 days absent a protest.