Whilst it might seem straightforward at the outset, winding up an estate in Scotland can be difficult, complex and time-consuming. In the first of a two-part blog, we will look at the initial steps which must be taken.

Even with the best of intentions, it may be challenging trying to wind up an estate without the advice and support of a solicitor. It is therefore important to ascertain at an early stage who is responsible for dealing with the estate.

Who is responsible for dealing with the estate?

The person responsible for dealing with the estate is the executor. The executor’s responsibilities start from the moment they are appointed, which is why it is important to ensure they are identified quickly.

Where there is a Will

Where the deceased made a Will, it will clearly name the executor of the estate. Usually, there will be provision for a joint or substitute executor should one of the executors predecease the granter of the Will. This means if an executor dies before the granter there is usually another executor who can act in their place. The Will is the basis of the executor’s appointment and their role as executor begins from the date of death of the deceased. The executor must also determine if the Will is valid and whether any changes in the law have invalidated all or parts of the Will. For instance, if the deceased is divorced, what impact does that have on the Will?

Where there is no Will

The position is different where there is no Will (known as intestacy). In the first instance, an application must be made to the Sheriff Court to appoint an executor to administer the estate. The order of priority of those who can apply to be executor, in terms of the Scots Law rules of intestacy, is as follows:

• Next of kin (usually the surviving spouse or civil partner)
• Someone who is entitled to share in the estate under the Scots Law rules of intestacy
• Creditors (organisations to whom the deceased owes money)
• The Procurator Fiscal (where there are no relatives or creditors)

The person appointed as executor can only formally deal with the estate once a petition has been lodged with the Sheriff Court and the Sheriff Clerk has granted decree.

Establishing the extent and value of the estate

One of the executor’s main duties is to establish the extent of the estate. This means ascertaining the extent and value of the deceased’s property, cash assets and investments, as well as the funeral expenses and liabilities (debts) of the deceased.

This can involve some investigation, especially where there are potentially lost assets and digital assets.

To establish the value of the assets, the executor will need to contact the financial organisations and instruct valuations of property (land and buildings), furniture, vehicles and investments. Any jewellery, antiques, works of art or other items must also be valued.

If the deceased owned a business or part of a business, the value of the business or share in the business must also be valued. This may require the involvement of an accountant or other specialist in this area.

The value of the property, cash assets, insurance policies and investments make up the inventory of the estate, which forms the application for the Grant of Confirmation (the document granted by the court, which gives the executor the legal authority to ingather and distribute the estate).

Establishing the funeral expenses and liabilities (debts) of the estate

The executor must contact any creditors of the deceased to determine any debts due by the deceased at the date of death. The deceased’s estate is frozen until Confirmation is obtained so the executor also requires to give consideration as to how ongoing payments will be made, such as buildings and contents insurance and gas and electricity bills.

Prior and Legal Rights

Where there is a Will, the executor must contact anyone entitled to claim Legal Rights in the estate e.g. the deceased’s surviving spouse or civil partner and children (including children of any predeceasing children).

Where there is no Will, the executor must ensure that the estate is distributed in accordance with the Scots Law rules of succession in relation to Prior and Legal Rights. The deceased’s surviving spouse or civil partner is entitled to Prior Rights and Legal Rights, and children are entitled to Legal Rights.

In the second part of this blog we will look at the steps which must be taken to report the estate to HMRC for Inheritance Tax purposes (if required) and make the application for the Grant of Confirmation, as well as ingathering and distributing the estate. 

Executry and Estate Planning Solicitors, Edinburgh

Winding up an estate in Scotland can be challenging and there are many things to be considered. The executor must deal with all aspects of the estate diligently and promptly. Failure to deal with any aspect of the estate can lead to delays and additional expense. It is important to instruct a solicitor with expertise in dealing with winding up estates.

Jennifer Gray is a Senior Paralegal and specialises in the administration of executry estates. This article focuses on the position in Scotland. The position in England differs and Murray Beith Murray have dual qualified lawyers who can advise on both jurisdictions.

If this article has raised any questions or you would like to discuss your affairs, then please complete our contact form or call us on 0131 225 1200.

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