At Murdoch Stewarts, we are skilled at winding up the estates of people who have passed away. When someone close to you dies we will provide support and guidance through this difficult time.
There is no exact timescale for winding up an estate, we will, however, do it it as sympathetically and efficiently as possible.
Guide to Winding Up An Estate
Here is an outline on the legal procedure which must be followed to allow the deceased’s estate to be wound up and distributed to the beneficiaries.
The procedure differs slightly depending on whether the deceased left a Will or not. We will first look at when a Will has been left.
If the deceased has left a Will the estate is termed a Testate Estate. The Will will normally appoint Executors. The Executors are the representatives of the deceased and are responsible for the winding up of the estate. As such it is the Executors who become our clients and it from them as legal agents that we take our instructions.
The first task of the legal agent will be to compile an inventory of all assets held and all debts owed by the deceased at the date of death. To allow us to do this we initially have to write out to all asset holders notifying them of the death and asking them to confirm the value of the asset at date of death. Some of the assets may require to be formally valued, e.g. property, items of furniture or jewellery. You are also required to write to each creditor to notify them of the death and to have the amount of debt confirmed again at the date of death. Obtaining all this information can be a very timely exercise. Once you have finally received details of all assets and debts an inventory is compiled which has to be signed by the Executor. The Inventory is lodged with the Sheriff Court who will then issue Confirmation.
What is Confirmation? Confirmation is the legal document that gives authority to the Executors to deal with estate and allows them to ingather the assets, settle all liabilities and redistribute the estate according to the terms of the Will. Therefore once Confirmation has been received we will write out to each asset holder exhibiting the Confirmation which will allow the asset holder to release the funds held, to us as agents for the Executors.
Once all assets have been received and all liabilities paid we will prepare detailed accounts which have to approved by the Executors. Once approval has been received the estate can be distributed according to the terms of the Will.
Where the deceased has left no Will the executry procedure is slightly different. Where there is no Will the estate is termed as an Intestate Estate.
The first difference in procedure is that as there is no Will there will be no Executor appointed. We must therefore apply to the Sheriff Court to obtain an order appointing an Executor. The Executor in most cases will be the next of kin.
Once the Executor has been appointed the procedure mirrors that of a Testate Estate, in that an inventory has to be compiled detailing all assets and liabilities. Before applying to the Sheriff Court for Confirmation, however, in an Intestate Estate you have to obtain a Bond of Caution.
What is a Bond of Caution? It is an insurance policy to protect the Executors against distributing the estate to the incorrect beneficiaries. For example it may transpire after the distribution of the whole deceased’s estate to two sons that in fact there were in fact three sons. The third son will have lost out on his entitlement to the estate. The Bond of Caution will protect the Executor in this instance and settle the third son’s share of the estate.
Once Bond of Caution has been obtained Confirmation will be applied for and the estate can be ingathered just as it is in a Testate Estate. Once we are ready to distribute the estate we obviously can’t do it according to the terms of the Will but instead we must distribute according to the Intestacy Laws of Scotland.
In both Testate and Intestate Estates there may be Inheritance Tax to be paid. All Executry estates over a certain level are liable to pay Inheritance Tax. The Inheritance Tax calculation is often very complex. This tax has to be paid within six months of the date of death or interest will start accruing. We will arrange for this to be paid timeously.
A question that is often asked is how long it will take until the estate can be distributed. It is impossible to give an exact answer. Due to Law Society guidelines we are unable to distribute the estate until six months have elapsed from the date of death. If the estate is small and uncomplicated then it should be distributed after six months. A larger estate can take up to a year to be wound up but in some complicated estates it can take even longer than this.