Dealing with the estate of a loved one can be a time-consuming and daunting experience. There are certain aspects, such as registering the death, which have set time limits, however, the full estate administration process will be different for each case. In general, it can take anywhere from six months to 18 months to wind up an estate. In this blog, we will cover some of the complexities within an estate that can cause delays.
What affects the timescale of winding up an estate in Scotland?
As an executor, it is essential to have a thorough understanding of what areas can affect the timing of the estate administration process. Below, we have listed some of the difficulties involved:
- Selling the deceased’s home
- Locating beneficiaries
- Obtaining confirmation
- Inheritance Tax
- No will
- Debt claims
- Prior rights
- Legal rights
The family home is usually the main asset within an estate. If the deceased owned property in their sole name, a grant of confirmation (known as a grant of probate in England & Wales) will be required to enable the executors to sell or transfer the property. Even in a straightforward estate, this can take several months.
The executor has a duty to make sure that all funds from the estate are distributed as dictated by the terms of the deceased’s will. However, problems can arise if the executor does not know the whereabouts of all beneficiaries. It is imperative to understand that if a beneficiary is due money from an Estate and is not paid, the executor can be personally liable to repay them. In order to protect yourself, you must ensure you have taken all possible steps to distribute the monies from the estate.
To obtain confirmation in Scotland, the executor must first make a detailed list of both assets and liabilities in the estate. The inventory can take some time to compile as the executor must collect information from the various organisations and institutions holding the assets. Depending on the size of the estate, will depend on how quickly the executor can create an accurate inventory. After submitting the application to the Sheriff Court in the area the deceased last lived, Confirmation can take up to a few days to process.
Once all assets have been collected and all liabilities have been discharged, the net balance of the estate can be calculated. This balance can then be distributed to the beneficiaries in accordance with the deceased’s will.
Using a solicitor to obtain confirmation is one of the simplest ways to ensure that the estate is wound up efficiently. At Wilson & Fish, we have a wealth of knowledge in the estate administration process, and detailed experience of the legal forms and the practical procedures needed to obtain confirmation. You can also read our comprehensive guide about applying for confirmation in Scotland here.
Inheritance Tax is usually payable on estates over £325,000. However, the rules of IHT are complicated, and it can take time to calculate the tax owed and whether any exemptions apply. Regardless of how precise the inventory has been, sometimes assets can come to light after the initial IHT payment has been made. Having the help of a qualified executry solicitor can ensure this does not cause delays in the process of winding up.
If the deceased has not left a Will, then it is called an intestate estate. There are various additional stages when distributing an intestate estate, and they must be carried out in a set order. Firstly, the executor must pay debts and meet liabilities (see debts on an estate below). After that, certain beneficiaries will have the right to claim for an intestate estate (see prior/legal rights below). Finally, the remaining estate (known as the free estate) must be distributed according to a list of beneficiaries contained in the 1964 Act. Delays can be caused if further administrative steps are required, such as obtaining an insurance policy known as a Bond of Caution.
Debts are paid out of the deceased’s estate and must be settled before an executor can distribute any of the estate to beneficiaries. Six months is given from the date of death to allow creditors time to claim the person’s debt before the estate is distributed. If this timescale is not followed, the executor could be made legally liable for any unpaid debts. When making the inventory, the executor should thoroughly check household accounts (gas and electricity bills), any firms where the deceased had an account or a credit, hire purchases or rental agreements,
Alongside debtors, the estate should not be distributed for a minimum of six months to allow individuals connected to the deceased to also put in a claim. Under Scots law, the prior rights are in favour of a spouse or civil partner of the deceased. The executor must deal with prior rights before legal rights. It should be noted that if someone dies leaving a valid will, these prior rights do not apply.
If the deceased owned a house, and the spouse or civil partner lived there, he or she is entitled to the house and the furnishings of that house, subject to certain exceptions.
The survivor can claim:
- the house, if its value is below £473,000
- the furnishings if the value is below £29,000
If the house is worth more than £473,000, then the spouse or civil partner is entitled to £473,000 in money. If the deceased left children or descendants, the survivor qualifies for the first £50,000 out of the estate. If there are no children or descendants, the spouse or civil partner is entitled to the first £89,000.
After the six months have passed, the distribution of the estate can be made without any comeback on the executor and the process of winding up can finally take place.
In Scotland, a spouse or a child of the deceased can claim legal rights over the estate. If they choose to invoke this right, any entitlement within the will is subsequently forfeited, (they must choose between their rights under the will and their legal rights). These rights are important to be aware of as the relatives can claim up to twenty years following the death. The best thing in which an executor can do is acquire formal discharges of these rights from the appropriate people.
If the deceased is survived by a spouse and children, these legal rights state that the spouse has a right to one-third of the moveable estate (assets other than land and property,) and the children have a right to one-third of the moveable estate between them. However, if the deceased is survived only by a spouse, this right changes to one half of the moveable estate. Similarly, if the deceased is survived by children alone, their entitlement will be increased to one half equally shared between them.
Contact Wilson & Fish Expert Executry Solicitors Glasgow, Scotland
The death of a loved one can be overwhelming, and the pressures of fulfilling their wishes in a timely manner can feel impossible. Getting specialist legal advice from a professional executry lawyer can help ease the administrative burden at an emotional and difficult time. Speak with a member of our qualified team today via the online enquiry form.