FREE CHAPTER from ‘How to Settle an Estate in Scotland – A Practical Guide’ by Stephanie Christie-Carmichael

CHAPTER ONE – PRELIMINARY MATTERS


It is a sad fact of life that to deal with the administration of an estate, there has to be a death. If my 17 years or so experience in law has taught me anything, grief will affect people in a variety of ways. Some people become uber efficient and want the estate dealt with immediately so they can obtain closure on the experience. Other people will put off dealing with the administration of an estate until circumstances force them to accept the person has died and deal with the assets (or the debts as the case may be). Occasionally you find the estate administration had been put off that long, the person entitled to deal with the estate has also died, and you have not one but two (and in some cases more!) estates to deal with to get the assets to the right place. Some people will cry their way through the experience while others may appear flippant, angry or just downright rude. As an estate administrator, you will have to deal with every emotion a person has, and compared to any other area of law, you need to have compassion for what people are going through, particularly when their behaviour may not be that of a normal client. If you are not a “people person”, this is not going to be the area of law for you.

Incidental Financial Services Business

If you are going to deal in estates, in addition to the usual master policy insurance, you should also obtain a license to undertake incidental financial services business from the Law Society of Scotland. This will be particularly important if you are procuring Bonds of Caution (pronounced kay-shun) for intestate estates for your clients.

Who is your client?

When dealing with a death, your client is the Executor.

For testate estates (where there is a Will), this will be:

  1. the person(s)/organisation(s) named as Executor in the Will;

  2. anyone else assumed into the role by the named Executors;

  3. where all Executors have died, resigned or declined to act as Executor, it will usually be the residuary beneficiaries who will end up in that role1.

For intestate estates (where there is no Will), this will be the person or persons entitled to be appointed as Executor Dative. The order of who can be appointed as Executor Dative follows the laws of intestate succession2 as follows:

  1. Where the prior rights of a spouse/civil partner3 exhaust the whole estate, the person so entitled to be discerned will be the spouse/civil partner.

  2. Where the prior rights of a spouse/civil partner do not exhaust the whole estate and there are children of the deceased, the person so entitled to be discerned will be the spouse/civil partner or one or more children or a mixture of both;

  3. If there is no spouse/civil partner, then the order of who can be appointed will follow the laws of succession on intestacy as the children, remoter issue of the deceased, siblings or parents of the deceased and their issue, aunts and uncles, cousins and will continue to go back up the family tree until eventually someone is found who can act as Executor.

  4. If there is no family member who can be traced, the estate will pass to the Crown as Ultimus Haeres. In this situation, you should contact the National Ultimus Haeres Unit for guidance before proceeding any further

In some cases, the person who comes to you to advise you of the death may expect to be Executor. With intestate estates, it is always best to have a genealogist check the family tree that has been provided to ensure you are instructed by the person with title to act. A list (which is by no means exclusive) of genealogists has been provided at the back of this book. All of them offer family tree checking services. If you are going to put together a family tree for checking, try and collect as much information as you can regarding names, dates of birth, adoption, marriage, death and divorce and last known areas of residence.

Beneficiaries will often believe they are the client. They are not unless they are also the Executor. Where a beneficiary is also an Executor, ensure that you are clear that you are advising them in their capacity as Executor in connection with the administration of the estate.

Managing Expectations

Once your client has been identified, you need to manage the expectations of the time it will take to wind up an estate. In Scotland, an estate should not be distributed before the 6 month anniversary of the death as this is the length of time creditors have to intimate debts. If an Executor distributes the estate prior to this time and then a new debt arises, the Executor can be personally liable to settle the debt. As a minimum, clients and beneficiaries should be advised that they will not receive any funds for 6 months after the death. In reality (particularly with Covid-19 related delays), it is more likely to take a year from instruction to wind up an estate and clients should be advised accordingly. This timeframe can be extended if you have overseas assets, properties to be sold, businesses to be sold, where Inheritance Tax is due and the District Valuer becomes involved or where the Department of Work and Pensions launches an investigation into whether all assets were declared when any benefits claims were made during life.

Terms of Engagement

It goes without saying that your client should receive terms of engagement. Estates are however tricky matters and what looks like a solvent estate on the initial meeting can quickly become insolvent as investigations into the extent of the estate get underway. Where this happens, it can often put full recovery of your fees in peril. Accordingly, consideration should be given as to whether your terms of engagement should include provision that in the event of insolvency the responsibility for paying fees should fall on the instructing party. Likewise, consider providing for the situation where the estate is solvent at the point of date of death but there is insufficient free proceeds to cover your fees or where it transpires the person instructing you does not have the title to act as Executor.

Another point to consider is how you record time against your file. If you do not have an all singing, all dancing time electronic recording system that can capture all time spent on your file, you may wish to consider the use of an independent law accountant to assess your fees. In this event, provision should be built into your terms of engagement to enable you to do so and for the law accountant’s fee to be an authorised expense of the administration of the estate.

In addition, you may wish to consider whether you want to include a risk commission in your terms of engagement which includes an uplift in fees based on the value of the assets ingathered, for example, Banks and Building Societies balances 0.75%, insurance policies 1% etc.

Reporting a Death

Sometimes, you may find out about the death through a hospital or the police. This may be because the deceased was in hospital prior to their death and advised who to contact in the event of their death. It can also be because the police have found the body in the house and have searched the house and found a Will or correspondence with your details on it. Depending on who is appointed as Executor or what family members are available, you may also have to register the death.

You need to register the death within 8 days in Scotland including bank holidays and weekends. You will need details of the deceased’s:

  1. Name

  2. Maiden surname (if applicable)

  3. Marital status

  4. Date of birth

  5. Date of death

  6. Occupation

  7. Last known address

  8. Parents names and occupations

You will also need the causes of the death which should be provided to you in the form of a medical certificate from the doctor certifying the death.

You may also need the deceased’s national insurance number and proof of the above such as their passport, driving licence, a bill showing their address, birth, marriage or adoption certificates.

You will usually register the death at the Register of Births, Deaths and Marriages nearest to where the deceased died. As a consequence of the Covid-19 pandemic, this procedure has moved online to minimise contact4. Any person can register a death in Scotland although it is preferable that one of the following do so:

  1. Any relative of the deceased;
  2. Any person present when the person died;
  3. The Executor or other legal representative; or
  4. The occupier of the property where the person died

Extraordinary Registrations of Deaths

  1. If the person has died in England and Wales, the death needs to be registered within 5 days. You can register the death if you:

    1. are a relative;

    2. were there at the time of death;

    3. are the person who found the body;

    4. are in the person in charge of a body;

    5. are an administrator from the hospital (if the person died in hospital); or

    6. are in charge of making funeral arrangements

  2. If the person died in Northern Ireland, the death is registered via the District Registration Office and needs to be completed within 5 days. You can register the death if you:

    1. are a relative;

    2. were there at the time of death;

    3. are the person who found the body;

    4. are in the person in charge of a body;

    5. are an administrator from the hospital (if the person died in hospital);

    6. are in charge of making funeral arrangements

    7. the governor, matron or chief officer of a public building where the death occurred; or

    8. a person living in and responsible for a house, lodgings or apartments where the death occurred; or

  3. If the person died abroad, you must register the death according to the regulations of the country in which the person died. It is also possible to register the death in the United Kingdom in addition to the country of death but it is not necessary to do so. If the death is also registered in the UK, this will enable a Consular death certificate to be obtained and evidence of the death will readily be available through the National Records Office of Scotland (or for registrations in Northern Ireland, England and Wales the General Register Offices).

  4. If the person died on a foreign ship or aircraft, you must register the death in the country the ship or aircraft is registered in.

Funeral Arrangements and the right to dispose of a body

More often than not, the funeral will have been held or at the least instructed before the client comes to you to commence the administration of the estate. Your job in that case will simply be to ensure that the funeral is paid in the correct order of debts from the estate.

In most cases, there will be no argument over who makes the arrangements and it will be a case of “job done”. However, there can be instances where the figurative all hell breaks loose over how the disposal of the deceased’s body is to be arranged. Scots law has been relatively unclear on wo has the right to dispose of a body. The Burial and Cremation (Scotland) Act 2016 sought to bring some clarity to the situation. Where an adult dies and does not leave what is known as an “arrangements on death declaration” the deceased’s nearest relative can arrange for burial or cremation which for these purposes follows the following hierarchy:

  1. Spouse or civil partner5 ;
  2. Cohabiting partner6;
  3. Children (with step-children ranked equally here);
  4. Parents of the deceased;
  5. Siblings of the deceased;
  6. Grandparents of the deceased;
  7. Grandchildren of the deceased;
  8. Aunts or uncles of the deceased;
  9. Cousins of the deceased;
  10. Nieces or nephews of the deceased;
  11. A long-standing friend of the deceased can act where there is no one else who can qualify in one of the foregoing categories

An “arrangements on death declaration” means a declaration by the deceased specifying the person by whom the adult wishes the arrangements to be made for the burial or cremation of their remains on the adult’s death. This can include a direction in a Will.

For the death of a minor, the nearest relative is defined as the parent(s) or person(s) having
parental rights/responsibilities in relation to the child, followed by the child’s siblings (if they are
over 16), grandparents, and thereafter remoter relatives.

TIP – when writing Wills for clients and including provision for funeral instructions within the Will, ensure you advise your clients to tell their nearest and dearest their wishes for burial or cremation. It would not be the first time that a solicitor is notified about the death after the funeral has taken place only to discover on reading the Will that the deceased wished to be buried and had been cremated by the family. There is really not a lot that can be done to rectify that situation after the fact!

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1 S3 Executors (Scotland) Act 1903; See Currie on Confirmation, 9th Edition, Eilidh Scobbie for further information.

2 S2 Succession (Scotland) Act 1964 as amended

3 S8-9 Succession (Scotland) Act 1964 as amended.

5 unless they were formally separated or that person had deserted the deceased or the deceased has deserted them (S65(4)(a) Burial and Cremation (Scotland) Act 2016)

6 where they couple were living together for at least six months before (i) the death or (ii) before the deceased was admitted to hospital if the deceased died there (S65(4)(b) Burial and Cremation (Scotland) Act 2016)