Beware of Pre-Paid Probate Plans: Experts Warn of Risks and Costs

The latest target for unscrupulous sales practices in the financial industry appears to be pre-paid probate plans. These plans, which are meant to provide peace of mind and protect families from rising costs in the future, are being marketed as a way to streamline the probate process and reduce administrative burdens on loved ones.

However, experts are warning that these plans could be a waste of money and potentially leave families in limbo. The lack of regulation in the industry means that customers have no protection if something goes wrong, such as a company ceasing trading and being unable to refund customers. Additionally, delays in the probate process could prevent bereaved relatives from accessing funds to settle bills or sell property.

One example highlighted in the news story is the case of Margaret Gibbs, who purchased a pre-paid plan for £2,300 with Philips Trust Corporation in 2018. After her death, her family faced significant challenges in obtaining probate, with the company failing to provide the promised seamless service.

The lack of oversight in the pre-paid probate industry has raised concerns among experts, with some likening these plans to cheap wills that may end up costing more in the long run. The move by some funeral plan providers to branch out into selling probate plans further underscores the need for regulation in this area.

As the Financial Conduct Authority (FCA) does not currently regulate pre-paid probate plans, customers are advised to exercise caution and seek advice from qualified professionals when planning for the future. The risks associated with taking unregulated advice from profit-driven companies could have serious consequences for families during a time of distress and vulnerability.