Executry and Estates

Your estate is all the assets you own, such as property, any bank or building society accounts, insurance policies, premium bonds, your car and personal effects, including jewellery and personalised number plates, electrical items such as mobile phones and tablets, and the furnishings at any properties.  Essentially anything that you are the owner of when you die.

Probate is a document issued by the court confirming the appointment of Executors and their right to administer an estate.  ‘Probate’ is actually the term used in English law, in Scotland we use the term ‘Confirmation’.  Many organisations such as banks and building societies and insurance companies refer to Probate in their correspondence, even when the deceased’s estate is in Scotland. 

If you are an Executor of someone’s Will in Scotland, you have to have Confirmation before you can access the deceased’s assets and distribute them to the beneficiaries in line with their wishes.

A beneficiary is a person who is going to benefit in some way from an estate. This could be either due to the terms of a Will or Codicil, or if there is no Will then because the law directs that you have an entitlement to benefit from the deceased’s estate. 

Another type of beneficiary might be to a trust, where, in terms of the Trust Deed, you may have been included as an actual or potential beneficiary.

A testate estate is one where the deceased has left a valid Will directing how all or part of their estate is to be disposed of.  An intestate estate (an ‘intestacy’) arises when the deceased had not left a Will, or they left a Will but it is invalid as to who is to benefit to their estate. 

If there is an intestacy, the law then directs who should benefit. See our What happens if I don’t leave a Will? page for more details on this.  Further administrative steps may be required when dealing with an intestate estate, such as the appointment of an Executor and obtaining what is known as a ‘Bond of Caution’.

A Bond of Caution is an insurance guarantee bond that has to be obtained and submitted to the court with the application for Confirmation (Scottish Probate) when dealing with an intestacy. The Bond functions as a guarantee that the estate will be correctly distributed to the beneficiaries. The Executor agrees to indemnify the insurance company in the event any claim is made upon the Bond.

In certain circumstances, a Caution is not required, for instance if all of the estate is passing to the surviving spouse or the estate is classed as a small estate. Currently, a small estate is defined as an estate where the gross value, before debts and funeral expenses are deducted, is less than £36,000.  

An Executor is responsible for dealing with the administration of an estate.  Quite often the Executor will appoint a firm of Solicitors to assist them with this. 

The Executor’s principal duty is to wind up the deceased’s estate. This will include:

• Identifying the extent of the estate and any debts
• Making up an inventory of the estate
• Paying any tax due
• Obtaining Confirmation
• Paying any outstanding debts
• Taking control of and then distributing the estate to the correct beneficiaries 

One of the initial things an Executor may also have to do is to organise the funeral, although sometimes the family may have already dealt with this.

It is difficult to accurately predict the timescale for completion of a specific executry, as timing can depend on a number of different factors such as the extent of the assets, whether there is a house to be sold, if there is a Will, if there are any missing beneficiaries, legal rights claims, the tax aspects and Department for Work and Pensions (DWP) claims against the estate.

An estate which is quite small in value, but with assets spread over a number of organisations, may take as long, if not longer, to administer than a high value estate where the main asset, such as a share portfolio, is held by one organisation. If there are foreign assets then this can also cause considerable delays. Foreign shareholdings for instance can have particular administrative requirements over and above what might be required in the UK.

Yes, being a beneficiary does not prevent you also being appointed as an Executor.  In many Wills the Executor(s) may be the surviving spouse or partner or children, who are also going to benefit under the Will. 

Sometimes, however, due to particular circumstances or a concern that there may be family disputes, it may be a professional such as the Solicitor or Accountant, or indeed another relative or friend of the family who is appointed.

A beneficiary who is receiving a share of the estate is entitled to receive a copy of the final executry account or cash statement and to see the Will.  A beneficiary who is receiving a specific legacy, say an item of jewellery or a set sum of money, is not entitled to see the Will, nor is anyone not mentioned in the Will, even if they are related to the deceased.  However, it is at the discretion of the Executors, so they may allow it.

Beneficiaries who are receiving a share of the residue of the estate have no right to insist upon receiving a particular asset from the estate.  Executors have discretion whether to transfer a specific item to a residuary beneficiary or realise or sell the asset and distribute the proceeds, and there may be tax implications that affect whether an asset is transferred or sold.  However, beneficiaries would usually be consulted before an asset such as a house or shares are sold in case one beneficiary wishes to retain the asset.

In some estates, where the beneficiaries are also the Executors they may reach an agreement amongst themselves as to how the estate is to be distributed. For example, when siblings are dealing with a parent’s estate and there is a property one beneficiary may wish to ‘purchase’ it and buy out their siblings’ shares.

A Deed of Variation allows beneficiaries to ‘vary’ or rearrange their entitlement from an estate. They are often viewed as a tax-planning device, as may alter the Inheritance Tax position, but actually many are done to redirect the estate for other purposes, for instance:

• Family circumstances may have changed since the Will was put in place, such as other children or grandchildren being born. 
• A beneficiary may decide that they do not wish to receive anything from the estate and would rather someone else benefitted. 
• The deceased may have been planning to update their Will to include a legacy or amend an existing provision but the sudden onset of illness prevented them from signing a new Will. 

Any beneficiary whose inheritance is being affected has to be a signatory to the document and on board with the proposed variation. 

The last thing anyone wants to have to deal with, at what is already a difficult time, is a dispute over an estate.  However, if a dispute arises the Executors would be expected to address it and, if necessary, seek professional advice. If a Solicitor is acting for the Executors then the Solicitor cannot also advise the beneficiaries, who would have to instruct their own Solicitor.

Often the first step might simply be to check the provisions of the Will and inform the affected parties as to their position. It may be that the law or terms of the Will determine matters. 

If a dispute arises, it is sensible to seek professional advice. Solicitors like Thorntons can also offer options like mediation to help resolve the situation.

Find out more about Challenging a Will or your potential entitlements when there is no Will. 

Inheritance Tax (IHT) is payable on the value of the deceased’s estate at the date of their death but gifts or transfers made by the deceased during their lifetime may also have to be declared and accounted for.

Any IHT due on the estate has to be paid before the application for Confirmation is submitted to the court. Some IHT can be paid in instalments. Where possible, funds can be requested from the bank or if there is a share portfolio, another option is to sell some of the stock to realise sufficient funds. At Thorntons, we can discuss payment options with you.

Some business or agricultural assets may attract exemptions from IHT and there are exemptions available if an estate is payable to particular beneficiaries such as a surviving spouse or civil partner or to a registered charity.

You can bequeath any asset including digital ones but you need to consider the practicalities and the policies of any social media provider. Digital assets are typically protected by a user name and password, and due to the nature of the assets and the terms and conditions of the service provider, it may be difficult for Executors to access, or even discover, a digital asset.

Providers of social media accounts are now putting in place bereavement policies which would allow Executors to close or memorialise your account. During your lifetime you should investigate this and use any facility provided by the provider to set instructions as to what is to happen on your death. 

You can bequeath photographs and videos as well as word documents and other files which have been stored on a computer or memory stick. The term ‘Digital Executor’ is often used but any Executor should be able to deal with and administer any digital assets or social media presence.  This is still a developing area. You may find Dead Social and The Digital Beyond websites useful sources of information on this topic.