20 Apr 2020
The passing of a loved one is upsetting for those left behind - and the thought of having to deal with the often complex process of winding up the estate can be daunting.
This is being made ever-more complex by the current restrictions in place to shield people from Covid-19.
There are five key steps to go through, some of which are impacted by temporary court closures. However, we can still progress cases and take instructions from you via telephone, email or video call.
Our executry administration team is composed of specialist solicitors and paralegals who are trained to deal with the administration of estates efficiently and sympathetically. They work tirelessly to remove as much stress as possible for all those involved at what is always a difficult and challenging time.
Here’s a quick guide to the process, and how it is being impacted by Coronavirus. Click here if you would like to speak to one of our solicitors.
The first step in all cases is to establish whether the deceased has left a Will, as this will dictate much of the process which is to be followed.
This may be left in a file at home, among financial papers, or, more commonly, be held by the deceased’s solicitor.
Within it, the deceased should name the person(s) they wish to be the Executor, who will then gather and distribute the estate in accordance with the instructions in the Will.
If the deceased did not leave a Will, a beneficiary of the estate will need to apply to court to be appointed as Executor. However, courts are currently only sitting for essential court business, which will delay this.
The second step is to gather information about the estate. The Executor will need to gather valuations of all assets within the estate (up to the date of death).
This needs to be a comprehensive inventory of all assets, including things like property, cash accounts, share holdings, land, personal items of value, pensions, insurance policies, as well as details of any debts.
Again, this part of the process is being impacted by Coronavirus, with many organisations, such as banks, working with reduced staffing levels.
For the purposes of inheritance tax, the Executor will also need to gather details of any gifts of significance made by the deceased within the last seven years.
With all these details in place, the Executor can then complete an inventory of the estate.
Once all details are known about the estate, an application for Confirmation (known as Probate or Letters of Administration in England and Wales) can be drafted. Inheritance Tax forms will also be prepared at this stage.
Once the forms have been approved and signed by the Executor, they will be sent to HMRC, if tax is payable, and then sent to the Sheriff Court.
If the deceased did not leave a Will, it is often also formal requirement to obtain “Caution” at this stage, being a form of guarantee given by the Court appointed executor and countersigned by an insurance company that the estate will be properly administered and distributed.
However, this step has been severely impacted by the current restrictions. Scottish Courts have stopped processing Confirmation applications for the time being as it’s not viewed as essential business at the moment. This may, however, be reviewed in the coming weeks.
Only once Confirmation – representing the Executor’s authority to gather up the estate for distribution - is granted, can the process move on to the final stages.
Once Confirmation is in place, the Executor can complete the various closure forms and gather together the assets of the deceased, obtaining payment of cash sums and having investments and share holdings updated and revalued in anticipation of them being encashed or transferred to beneficiaries.
If there is a property to be sold, this can now go-ahead. Again, the current restrictions may impact this. Property viewings are currently prohibited by the Scottish Government, and buyers are unlikely to commit without physically seeing the property.
The fifth and final part of winding up an estate is paying it out. All debts are paid first, such as any outstanding funeral expenses (it is often possible to have funds released earlier in the process to pay these), loans, credit cards, and household bills.
After that, the in-gathered funds are paid out and other assets transferred among the beneficiaries. If there is a Will, this will state how the estate is to be divided. If there is no Will, the beneficiaries are determined by law. Our solicitors can guide you on this.
If you would like to speak to one of our lawyers about executry administration, click here.
We have offices in Aberdeen, Aberdeenshire, Dundee, Perth, Stirling, Edinburgh and Glasgow