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Guide for Executors

 

REGISTERING A DEATH

A death must be registered within 8 days at the Registrar of Births, Deaths and Marriages. The registration of the death may be made at any Registration Office. A list of the addresses and telephone numbers of the local Registrar’s Offices are:-

  • Ayr: 5-9 High Street, Ayr. Telephone No: 01292 617617
  • Irvine: Bridgegate House, Irvine. Telephone No: 01294 324988
  • Kilmarnock: Burns Monument Centre, Kay Park, Kilmarnock Telephone No: 01563 576695
  • Largs: 24 Greenock Road, Largs Telephone No: 01475 676552
  • Prestwick: 2 The Cross, Prestwick Telephone No: 01202 671666
  • Saltcoats: 45 Ardrossan Road, Ardrossan Telephone No: 01294 463312

For additional Registrar’s Offices please source the local telephone directory. To Register the death, you will need the Medical Certificate of cause of death (this is obtained from the doctor or hospital certifying the death) and as much of the following information about the deceased as possible:-

  • Full name (if married, a note of the maiden name will also be required)
  • date of death
  • usual residence
  • date of birth
  • country of birth
  • occupation
  • whether single, married, widowed, divorced or surviving civil partner (if married, widowed, divorced or in a civil partnership, spouse’s or civil partner’s full name and occupation)
  • full names and occupation of deceased’s father
  • full names, including maiden name, and occupation of deceased’s mother
  • name and address of family doctor
  • whether deceased was in receipt of any pensions or benefits

After registration, the Registrar will give the person registering the death the following:-

  • A Certificate of Registration of Death
  • Form 334/S1 to notify death for benefits or national insurance purposes
  • Extract Death Certificate (full Certificate on payment of a fee). N.B. the full Certificate will be required for use in Executry Administration.

THE DUTIES OF EXECUTORS

It is the Executors’ responsibility to ingather all the assets of the deceased, i.e. “the Estate”, as soon as practicable. However, before Executors ingather the estate, “Confirmation” will normally be required from the Sheriff Court, to establish the Executors’ legal authority to deal with the estate.

If no Will has been left, which is referred to as an “intestate estate”, it may also be necessary to Petition the Sheriff Court to appoint an Executor.

Once Confirmation (called “Probate” in England) has been obtained and the estate ingathered, the next duty of Executors is to pay any debts of the deceased, including any Inheritance Tax. Then consideration can be given to paying any legacies to beneficiaries named in the Will.

Finally, the Executors pay the “residue” of the Estate i.e. what is left after debts and legacies are met, to the beneficiaries.

In all these duties, the Executors can be assisted by a solicitor.

Certain small estates, generally when the total value of the estate is below £15,000 in value, may be administered without obtaining Confirmation. Banks, Building Societies and Insurance Companies can provide indemnity forms for completion by Executors or, in some cases, by the next of kin. It should be noted however that each financial institution has its own limit for waiving the need for Confirmation.

Where the value of the estate does not exceed £36,000, the Sheriff Clerk’s Office can advise and assist an Executor in obtaining Confirmation. The Sheriff Clerk will not charge an administration fee for this service. However Confirmation Dues are charged by the Court in all estates where Confirmation is required.

McSherry Halliday can assist in the administration of even the smallest estates.

EXECUTORS’ FIRST MEETING WITH THE SOLICITOR

The first meeting with the solicitor normally takes place shortly after the funeral. However, if there are matters of pressing importance, then an earlier meeting will be necessary.

You should bring to the first meeting as much of the deceased’s papers and documents as can be located. In particular, the following information and/or documents are useful:-

  • Extract Death Certificates from the Registrar of Births, Deaths and Marriages
  • Pension books and details of any other pensions/benefits received
  • Bank books
  • Bank statements
  • Cheque books and cheque cards
  • Building society passbooks
  • Life Insurance policies
  • Premium Saving Bonds
  • National Savings Certificates and Bonds
  • Insurance Certificates including any house/contents insurance papers
  • Title Deeds or property related papers such as Planning Permissions or Building Warrants
  • Income Tax papers
  • Any outstanding accounts or debts due by the deceased
  • Credit cards
  • Vehicle registration documents
  • Passport
  • Stocks, Shares and Unit Trust Certificates
  • Dividend counterfoils
  • ISA, PEP, Certificates and papers
  • Log-in details of any information held electronically
  • Any other papers of importance.

If you are not able to identify all the appropriate paperwork then McSherry Halliday will be able to assist you in the investigation of any missing items.

The Executors will be asked for proof of identity. This is a requirement of the Law Society for the purposes of money laundering regulations. You should bring with you to the first meeting your own passport (or other form of proof of identity bearing your photograph) and a recent utility bill or bank statement which confirms your name and address.

OUTLINE OF ADMINISTRATION PROCEDURES

The administration of an Executry estate comprises four stages, namely:-

  • (1) Investigation
  • (2) Ingathering the assets
  • (3) Payment of debts and legacies
  • (4) Payment of the residue of the estate

Investigation of the Estate

After obtaining the paperwork referred to in Section 4, we will write to all those who hold assets of the deceased, e.g. banks, building societies and insurance companies, to obtain a date of death value of the assets in the estate.

If a house is owned, it may be necessary to obtain a professional valuation by a surveyor. It may also be necessary to obtain a valuation of the deceased’s furniture, jewellery and personal effects. Any stocks and shares owned by the deceased will require to be valued by a stockbroker. A fee is payable for such valuations.

Professional valuations are required where either the estate is likely to attract Inheritance Tax or the residue is to be divided amongst a number of different residuary beneficiaries.

Once the investigation is complete, an “Inventory” of the estate (i.e. a list of all the assets and liabilities of the deceased as at the date of death) is drawn up for signature by one of the Executors.

The Inventory serves two purposes:-

(1) As an application to the Sheriff Court for Confirmation of the estate and (2) as an Inheritance Tax Return Form for those estates on which Inheritance Tax is payable. In estates where Inheritance Tax is payable, it is necessary to forward the Inventory to the Capital Taxes Office in Edinburgh (HMRC) before application for Confirmation can be made to the Sheriff Court. The Capital Taxes Officewill initially return the Inventory as quickly as possible to enable Confirmation to be obtained. However, they may raise queries at a later stage.

Any Inheritance Tax payable on the estate at this time must be paid to the Capital Taxes office with the Inventory, prior to lodging with the Sheriff Court for the issuing of Confirmation and before the Executors can deal with the assets of the deceased. There are various means in which such Inheritance Tax can be paid to the Capital Taxes Office and McSherry Halliday can advise you in this regard.

Even when Inheritance Tax does not require to be paid, the Inventory is forwarded by the Sheriff Court to the Capital Taxes Office for consideration by them and the Capital Taxes Office has a period of 60 days from the date Confirmation is granted by the Court in which they can raise any queries they may have about the assets of the estate and on some occasions may request that professional valuation be obtained for property and personal effects.

Where no Will has been left and, under the laws of intestacy the estate is passing to a beneficiary other than a surviving spouse, a Bond of Caution requires to be obtained from an insurance company. Caution is an insurance which has to be put in place in order to safeguard the interest of the beneficiaries. The insurance company will insure the whole of the gross value of the estate and the premium will be based on the value of the estate together with the number of beneficiaries and will be charged against the estate. Confirmation will not be granted by the Court unless the Bond of Caution is exhibited along with the completed Inventory.

Ingathering of Assets

Once the Inventory has been lodged with the Sheriff Clerk, Confirmation will be issued, together with a series of “Certificates of Confirmation”. These Certificates are thereafter sent to the various banks, building societies etc with whom the deceased held assets, together with the appropriate withdrawal or discharge forms signed by the Executors to enable payment.

Payment of Debts and Legacies

The next duty is to deal with the payment of the debts of the deceased. Normally this would include all funeral expenses, general domestic accounts of the deceased, loans etc. It should be noted that most banks etc will be quite willing to pay the principal Funeral Account when the account is rendered, providing sufficient funds are held by them on behalf of the deceased.

When the Inventory for Confirmation is lodged with the Sheriff Court and Confirmation is issued, the Benefits Agency and Local Authority will obtain a copy of the Confirmation. The Court Books of the Sheriff Court are public records and are open for inspection. The Benefits Agency can check their records to ascertain whether or not too much Income Support or benefit has been paid (e.g. if the deceased has capital over the relevant limit). If so, a possible claim exists against the estate. A claim can normally be made up to six months from the date of death. It is however possible to approach the Benefits Agency or Local Authority to seek their confirmation that no claim will arise.

Creditors have a period of six months in which to lodge a claim against the estate, therefore it is our firm’s practice that estates are not distributed until the expiry of the six month period from the date of death. Should a claim be made against the estate within six months and the residue has been distributed then the Executors would be personally liable. If we are requested by the Executors to distribute the estate within the six months then an appropriate Discharge and Form of Indemnity will require to be signed by the Executors.

After payment of all the deceased’s debts, the Executor can pay any cash or specific legacies provided for in the deceased’s Will. We will normally send to each of the legatees a cheque for the amount of the legacy, or arrange for delivery of the items bequeathed, together with a Form of Receipt, acknowledging such bequest, to be signed and returned by the person receiving the legacy.

Payment of Residue

Following payment of the deceased’s debts and any cash or specific legacies, the Will will provide how the residue of the Estate is to be distributed to the residuary beneficiaries.

At this stage, an Executry Account/Statement of Intromissions is prepared detailing all the sums received by our firm and paid out on behalf of the estate. The Account is approved by the Executors. From this Account, the exact value of the Residue can be established and payments thereafter made to the residuary beneficiaries. These payments will normally be organised by us and a relevant Form of Receipt and Discharge is obtained from each beneficiary.

Inheritance Tax

The Inheritance Tax (IHT) threshold is currently £325,000 for a single person, however between spouses/civil partners a combined exemption of £650,000 may be applied. IHT will be calculated on all the deceased’s assets which exceed the threshold and 40% tax will be levied on such assets. (i.e. if the deceased’s assets exceed the threshold limit by £10,000 the estate will be liable to pay £4,000 in tax). It should be noted however that depending on how a Will is written, it may be the legatee or the residuary beneficiaries who are liable to settle the Inheritance Tax.

In estates which attract Inheritance Tax, it is necessary to agree the amount of tax due with HMRC through the Capital Taxes Office.

This process may involve considerable correspondence concerning valuations of assets and related matters. Regrettably , this can create delays, however McSherry Halliday will always strive to complete the administration as quickly as possible and keep you informed of progress.

Conclusion of Administration

Once the Inheritance Tax has been finalised and the balance of residue paid to the beneficiaries, the administration has been concluded. Our File of papers however is retained for many years in case of any query arising in the future.

PRIOR AND LEGAL RIGHTS

Under Scots Law, the surviving spouse or civil partner and the children of the deceased person have certain rights in their estate. These are called Prior and Legal Rights. Such rights are unique aspects of our legal system.

When there is no Will, a surviving spouse/civil partner is entitled to Prior Rights and these are as follows:- A right to the deceased’s dwellinghouse in which they resided up to the value of £473,000, furniture/personal effects up to the value of £29,000 and cash to the sum of £89,000 where there are no surviving children or cash to the sum of £50,000 where there are surviving children.

Whether there is a Will or not, the surviving spouse/civil partner and children are entitled to Legal Rights and these are as follows:- A surviving spouse/civil partner is entitled to a one-half share of the net moveable estate if there are no surviving children. If there are surviving children, the right reduces to a one-third share of the net moveable estate. Children are entitled to share in a one-half share of the net moveable estate if there is no surviving spouse/civil partner. If there is a surviving spouse/civil partner this right reduces to share in a one-third share of the net moveable estate.

Legal Rights claims only apply to what is termed as “moveable” estate. This includes banks and building society balances, shareholdings and investments, household contents and furniture, cars etc, but excludes land and buildings. Legal Rights may not be claimed in addition to rights under the deceased's Will. Accordingly, a choice must be made between these rights.

As part of the administration, we will require to make enquiry as to the existence of legal rights and will seek and obtain discharges of these rights, if appropriate.

These rights can be claimed for up to 20 years after the date of death.

LEGAL FEES

It is our practice to submit our file to external Law Accountants for assessing of our fees. This means that the file is independently assessed to establish a fair charge for the work undertaken. A charge is made by the party assessing our files, and this is normally paid from the estate. Once the final fee is assessed, it is generally charged at the conclusion of the administration. The fee is payable from the estate.

It is very difficult to estimate what the fees may be for the administration of a particular estate. Circumstances vary enormously. Often a small estate of low or moderate value can be as complicated, or more complicated, than an estate of a larger value.

HOW LONG WILL IT TAKE?

We are often asked how long the administration of an estate will take. Unfortunately, it is impossible to accurately predict the timescales to completion of an executry; timing in these matters is dependent upon a number of factors beyond our control such as:-

  • House to be sold
  • Prior/Legal Rights claim
  • Intestate estate (no will)
  • Missing Beneficiaries
  • Inheritance Tax Valuations
  • Income Tax aspects
  • Claims by the Benefits Agency
  • Delays by correspondents from whom we require information

However, it is often possible to complete the administration within the following timescales:-

  • For a smaller estate which is not subject to Inheritance Tax, 6 months is often feasible, subject to the facors above
  • For a larger estate, especially those subject to Inheritance Tax, 9 to 12 months is perhaps more likely
  • For complex estates which include assets requiring specialist valuations winding up the estate may take 12 to 18 months or more.

FINANCIAL SERVICES

McSherry Halliday are 1 of only 44 legal Firms in Scotland authorised and regulated by the Financial Conduct Authority. Our Firm registration number is 113475. Our skills and expertise in this field will enable Executors and beneficiaries access to financial advice throughout the winding up on an Estate and our Independent status ensures an unbiased approach to the advice process. Often advice and recommendations are sought on a whole range of different types of investments and pensions with a view to determining their future suitability for beneficiaries. We can also provide tax guidance on the retention or disposal of assets and have the relevant skills and experience in setting up Trust arrangements where required and appropriate.

Our service can extend to managing portfolios on a non-discretionary basis and the level of that service will be bespoke to each client’s personal requirements. The cost of our services are communicated and agreed in advance and a detailed analysis of circumstances, risk profile and objectives is carried out in the first instance.

With the requirement for some degree of financial advice common in most Executries, McSherry Halliday are ideally placed to provide a fully Independent service to Executors and beneficiaries without the need to involve third parties.

Contact our Wills, Executry/Probate Solicitors in Ayrshire Today

With offices in Kilmarnock, Irvine and Troon, we can help business clients all over Ayrshire and across Scotland and currently serve clients in Ayr, Troon, Arran, Kilwinning, Saltcoats, Dalry, Ardrossan, Prestwick, Stewarton and Fenwick. Contact us today to arrange an appointment.

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James B. Morrison
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Catherine Morrow
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Kilmarnock

TEL: 01563 533121
FAX: 01563 522762
 
Bank Chambers
42 Bank Street
Kilmarnock
KA1 1HA
 
 

Kilmarnock

TEL: 01563 533121
FAX: 01563 570840
 
7 Bank Street
Kilmarnock
KA1 1HA

 
 

Irvine

TEL: 01294 274097
FAX: 01294 279692
 
Galt House
78 East Road
Irvine
KA12 0AA
 
 

Troon

TEL: 01292 313737
FAX: 01292 317856
 
8 Academy Street
Troon
Ayrshire
KA10 6HS