Administration Of A Deceased Persons Estate  

What needs to be done first?

In many cases the deceased will have a copy of his/her Will at home and the Executors Nominate or next of kin will be able to establish contact with us so that the administration can begin.   The next of kin normally gather together all documents such as Bank and Building Society books, title deeds, share Certificates, National Savings Certificates, Insurance Policies etc. belonging to the deceased and hand these in to us along with one or more copies of the Death Certificate and a Pension Book with DSS green form, if applicable.  Funeral arrangements can generally be entrusted totally to local undertakers who keep relatives informed of the procedures required here, including the registration of the death.   An early telephone call to us or brief meeting to establish contact is usually beneficial for both relatives and ourselves since we can offer any immediate guidance that may be required.     Meetings to discuss and deal with matters in detail can generally wait until the next of kin feel prepared for such a meeting.  Many people prefer to meet with one of us once the funeral is over.

What if there is no Will?

A person will generally have appointed one or more persons in his or her Will to be Executors (called Executors Nominate) who are responsible for the gathering in of the deceased person's Estate and its distribution according to the requirement of that person's Will.   If a deceased person has not left a Will or has failed to appoint an Executor, application has to be made to the local Sheriff Court for someone, generally the next of kin, to be appointed Executor (who is then called Executor Dative).    Further procedures may also require to be followed.  Mair Matheson will advise on exactly what is required and will carry out these procedures on behalf of relatives.

What happens next?

Following an initial meeting with the deceased's next of kin, we will start to draw up an Inventory of all the items included in the deceased person's Estate.  This will include heritable property (land and buildings) and moveable property (money in Banks and Building Societies, investments, insurance policies etc.).  We require to write to each company to obtain an exact valuation of each asset at the date of death.   Once a precise valuation of every item has been obtained, the completed Inventory is signed by one of the Executors and submitted by us to the Sheriff Court. If Inheritance Tax (see below) is due, this has to be dealt with at this stage.  The Sheriff pronounces a Decree called the "Confirmation" of the Executor. The equivalent process in England is called "Probate".     

Why is Confirmation needed?

Confirmation confers on the Executor full power to gather in the Estate and dispose of it according to either the deceased's Will or, in the absence of this, the Law of Scotland. Without the appropriate Certificates of Confirmation, most Banks, Insurance Companies etc will not release funds or assets to those entitled to them.

What about Inheritance Tax?

Where the value of a person's Estate exceeds £234,000 in total (after deduction of allowable debts such as funeral accounts etc.) then, unless there are any exemptions which apply such as the surviving spouse's exemption (where one spouse dies leaving assets to the remaining spouse), Inheritance Tax becomes due on the balance above £234,000 at the current rate of 40%.  The Capital Taxes Office invariably require verification of the value of assets before they will agree the amount of tax due. Where values are a matter of judgment, (for example, land, buildings etc.,) expert opinion will be required and protracted negotiations may ensue.  Delays are often encountered in this area particularly where assets are sold prior to the close of the administration for an amount different to that disclosed in the Confirmation document, which requires a reassessment of the tax liability. The Capital Taxes Office are able to impose severe penalties for failure to disclose assets within certain time-limits or for the under-valuation of assets.  Responsibility for such matters lies with both Executors and ourselves as advisors

What are Legal Rights?

Regardless of what a person has stated in his or her Will or, indeed, whether he/she has left a Will, the Law states that both the surviving spouse and all children of the deceased (including adopted and illegitimate children) are entitled to claim "legal rights”.  These rights represent a sum of money which is a proportion of the deceased’s estate.  We can advise on all aspects of legal rights.

How long will it take?

A number of (often unpredictable) factors determine how long it will take to complete the administration of an Estate.  These factors include the nature of dealings with the Capital Taxes Office in connection with Inheritance Tax, the time taken to sell a dwelling house or other assets, whether the deceased has an interest in a Trust and the speed of replies from financial and other institutions.   The latter, in particular, can be extremely variable.   Even under optimum conditions the administration of a small Estate is likely to take a minimum of 6 to 8 weeks to complete.   A medium sized Estate, where no Inheritance Tax is payable, is likely to take several months to administer and a large Estate which might require negotiation with the Capital Taxes Office over the valuation of assets with a view to determining the amount of Inheritance Tax due can often take more than a year to complete.     Claims by creditors on an estate also affect timescales and any distribution within six months of a person’s death requires careful consideration. Where there are lengthy delays for any reason it is often possible for us to arrange to have payments to account made to beneficiaries after Confirmation has been obtained if sufficient funds are available to meet all possible liabilities.