Dealing with a loved one’s death is extremely difficult, especially when you are responsible for winding up their estate. In this article, we look at the steps you need to take to ensure the executry process is handled properly in Scotland. For more information or to speak to a member of our friendly private client team, click here.
Register the death
When a person dies, you must register the death within eight days via the Registrar of Births, Deaths and Marriages. Ideally, as soon and as close to the day of death as possible. The death can be registered by a number of people, including a family member of the deceased or the executor of the estate.
If the death happened in Scotland, then it must be registered in Scotland - even if the deceased’s usual residence was outside of the country. The death must also be registered otherwise the funeral cannot take place.
The importance of a will
When a person dies, you should check whether they made a will. A will states what happens to the deceased's estate, money and property when they pass away. It may also confirm whether or not the person wishes to be involved in organ donation, whether they want to be cremated, and the type of funeral they want.
What happens if you cannot find the will?
If the will cannot be found in your loved one's home and you know one existed, call their solicitor as they should have a copy. If no will is found, relatives will need to be traced so that executors can be appointed. In such circumstances where no will or relatives are found, the deceased's estate falls to the Crown.
What does an executor do?
An executor represents the deceased and pays off any debts and taxes from their estate. The estate is then distributed among the beneficiaries (those that inherit money, possessions or property based on wishes stated within the will). Executors are typically named in someone's will but, if no executor is available or the deceased died without a will, an 'executor dative' will be appointed.
Executors are responsible for paying any inheritance tax (IHT). The executor must first create an inventory of all the deceased’s assets to determine whether IHT is payable. If the total value of the deceased’s estate does not exceed the current nil rate band (£325,000), then IHT is not typically required to be paid.
For those estates valued over £325,000, any assets above the nil rate band will be taxed at 40%. There are certain exceptions to this rule, including if the estate is passed to a spouse or civil partner, which is why legal advice is always recommended.
What happens to any debt?
Property and assets of the deceased are distributed according to their wishes, although any debts must be settled out of the estate before this can occur. An executor must allow six months for creditors (for example, utilities and mortgage companies) to make claims for debts before they distribute the estate.