Property Search
28/01/2010
notes and information on wills and estates
Notes on making a will and winding up a deceased person’s estate
General
No-one likes to think of death. But one way or another, it will come to us all. Better for those left behind if you have organised your affairs to minimise the trouble and worry (and sometimes fighting) that intestacy drags in its will-less wake. And going along with death there are taxes, mainly inheritance tax. While few of us think of ourselves as particularly wealthy, the old saying that you’re worth more dead than alive can be very true indeed – life insurance, property, savings, can all add up. Don’t die wondering. See a solicitor about what is involved in making a will, and what are the effects of not doing so.
Here are some notes to help you think about the whole business of wills and estates. They don’t answer every question, but they will give you a start in considering your own needs, wishes and experiences.
How is a will written and signed effectively?
In Scotland, a will is one of the only documents that still requires to be signed on all pages if there is more than one. To make it self-proving it must also be witnessed on the final page. The witness should not be a person benefited by the will or appointed as executor in it. The whole thing can be handwritten or printed. The person making the will should put in their usual signature, but in some instances abbreviated versions or even initials have been ok, as long as the person is properly identifiable.
What rights do civil partners have when their partner dies?
Civil partners enjoy more or less the same rights of succession and inheritance that married spouses do. It is still best to make a will, for certainty and to avoid claims for legal rights by children who perhaps do not approve of homosexual relationships or some such nonsense.
What rights do cohabitees have when their partner dies?
If the deceased cohabitant (the correct legal term for cohabitee) has made a will, it is effective - aside from the legal rights clams of any children or surviving spouse (presumably separated but not divorced). However, if there’s no will, the survivor may apply for financial provision out of the deceased’s estate, which can take the form of a capital sum or a property transfer out of the deceased’s net intestate estate. A lump sum or instalments are both competent. The court will consider the size and nature of the estate, any benefit received or to be received by the survivor (for example, from the deceased’s pension scheme or joint life policies), any other claims on the estate, such as those of the deceased’s children, and any other matters appropriate.
Can a person making a will disinherit family members?
You can partly disinherit a spouse or children, but the law puts a limit on that. Spouses have the right of ius relicti (husband) or ius relictae (wife) and children have the right of legitim. The law divides the estate of a deceased into 3 parts - the prior rights; the legal rights, and the free estate. After payment of debts, and removal of heritable property (houses and land), what money etc. remains is then divided up. If there is spouse and there are children, the spouse is entitled to one-third. If there are no children, the spouse gets a half. If there is a surviving spouse/parent, the children share a third among themselves. If no spouse, they share a half. The deceased cannot get out of this by trying to will everything to someone else.
What is the order of priority in the family when someone dies without a will?
In the absence of a will to deal with the whole estate, the order, after paying debts and dealing with legal rights is:
1. children – sharing equally. Note the eldest has no priority.
2. parents and brothers and sisters – half to each group
3. brothers and sisters ( if no parents)
4. parents (of no brothers and sisters)
5. spouse
6. uncles and aunts
7. grandparents
8. brothers and sisters of grandparents.
Note each category takes the whole remaining estate. So if there are no children but there are brothers and sisters, there will, be nothing left for the spouse. If you have no blood relatives, an intestate estate will go to the Crown.
Why make a will?
Unless you have children or a spouse you want to disinherit as far as possible, a will is the way of dividing up your estate as you wish. Without a will, no charity can benefit, nor can any friend. You cannot leave a memento or keepsake to a specific family member. Also without a will, your family will have a bigger and more expensive job to wind up your estate after your death. If you have no blood relatives, an intestate estate will go to the Crown. Also if your family have to deal with your estate in the absence of a will, the costs and times involved are usually considerably more than if there is a will.
How much do the legals cost?
Some solicitors do wills for nothing, a sort of free gift, especially if you are consulting them about other business. Some will ask you to make a donation to charity. But if a fee is being charged, you can assume it will not likely be less that £25, and not more than £100, unless your estate or instructions are very complex.
What are the basics of a will?
Three main things to start with. Firstly: a will should nominate an executor, and also a reserve executor if the nominated one dies or is not able to take up the position after the death of the testator (perhaps as he is the testator’s husband and dies with him in an accident). The executor’s duties, such as payment of debts and funeral expenses should be stated. Secondly, a statement of any specific legacies the testator wishes to be paid, if any – to friends, family, churches, charities, cat and dog homes. If a will is not made, no-one except the closest family members will get any part of the estate. Thirdly, division of the residue, which is what is left after the specific legacies, if any. The will may state that the estate is to be divided equally among the children. The question often needs to be asked – what if one of the children dies before the testator, leaving children of his own? Do those grandchildren inherit their parent’s share, or is the share re-divided among the surviving children? The will must state what is to happen if any beneficiaries die. There are other provisions that can be put in wills – funeral arrangements, personal comments (good and bad…), powers for the executor to invest money for any under-age beneficiaries. Some younger testators state a wish in the will for any young children they leave behind to be cared for by a particular person. There is nothing wrong with doing this, but such a statement is not binding if a different person claims care of the children and goes to court to seek a parental rights order. The court will decide what is in the children’s best interests at that point.
Who stores or keeps the will?
The will belongs to the person who made it (i.e. the client so far as solicitors are concerned), but it is wise to have the will stored away from your house and away from the family, especially if there is any chance of it becoming conveniently missing when you die. Also if your house goes up in flames with you in it, you don’t want the will to be burned also. There is no central register of wills in Scotland though there are some commercial organizations which do this kind of thing. Solicitors will store your will (we don’t charge for this service) for as long as you wish.
Is a living will enforceable?
A living will is a statement of intent. In the event that the person making the will in the future is badly injured or falls terminally ill, the instruction is that there is to be no resuscitation or life-preserving medical treatment. Some people even go further, but euthanasia is still a crime in this country. The will does not have the force of law, and is no more than an expression of a wish. It can guide relatives and medical staff, but cannot bind them to act or refrain from acting as they see fit.
Can a will be contested?
The main reasons are that the will is a forgery, that it was signed under some sort of duress, that the testator was incapable of truly understanding what he or she was doing when signing, that the testator was of weak will and easily led into making a will be unfair persuasion, or that there was undue influence by someone who took advantage of a position of trust, such as a solicitor who wrote the will to give himself a legacy in his own client’s estate. But if an aggrieved relative wants to challenge, he must do so in court, and prove by clear evidence (especially medical evidence in the case of an insanity case) that the will is not valid, and that is a high hill to climb. Supposition and suspicion are not enough. And if the will was prepared by or under the supervision of a lawyer, then it is likely that the lawyer will be able to say that he or she took care to check the willingness and understanding of the testator at the time.
What does the executor do?
The executor becomes the administrative officer for the estate. Whether he or she is a spouse or family member, a solicitor, or any other adult person, his duties commence on the death. He has the right to ingather the estate, correspond with banks and financial institutions and companies, and to apply to court for a Confirmation order, to divide up the estate and settles debts, sell the deceased’s property and generally do all that a will dictates (or if no will, what the law requires). If the executor defaults or acts unlawfully, the beneficiaries can take him to court for what is called count, reckoning and payment to ensure that proper division of the estate takes place. The post is unpaid unless the will says otherwise. If the executor defaults or fails to carry out his duty, the beneficiaries can take court action against him. If he retains the money due to beneficiaries, this may even amount to theft. The executor can be anybody nominated by the will, but if there is no will, it should be a person who is entitled to a share of the estate by the law of intestate succession.
What is Probate/Confirmation?
Confirmation is the Scottish procedure to make the appointment of an executor more formal. It involves the sheriff court checking the inventory of estate and the information presented to court by the executor or solicitor on the deceased and the death, and granting a certificate that requires banks and any person or body holding the money belonging to the deceased to hand it over to the executor.
Why won’t the bank release the money of the deceased to the family automatically?
For convenience the bank can choose to settle the money due to the estate on the word of the executor, with appropriate ID and paperwork done. But this will only be if the amounts are small, and more likely if there is a will. But if the bank chooses to insist on Confirmation, it is able to do so. Banks are cautious in case there are perhaps other family with competing claims on the money, or if a person misrepresents facts or relationships to it, or if there is a subsequent will that the person claiming the money has not mentioned.
How can I avoid death duties/inheritance tax?
In 1986 Inheritance Tax replaced capital transfer tax, which replaced death duties in 1975, and is presently set at 40% of an estate worth over the IHT threshold, which has been rising each year (you can check it on the HMRC websites). Below that threshold there is total exemption from tax. There is also exemption when a spouse dies and there is a surviving spouse whether or not there is a will. There are two main ways of legitimately avoiding tax. One is to give away enough of your estate during your life so that when you die, you own less than the threshold figure. The downside of this is twofold: firstly, it means you lose control over that part of your estate you have given away; secondly, the Inland Revenue looks back from the date of death, and any transfers of money or property a deceased made within that time, whether by gift or sale for below value, and includes within the estate the chargeable transfers made. The second way of avoiding tax is by creating a trust, which is a legitimate legal vehicle for the ownership of assets of different sorts. The trust is a different legal person from the truster or original owner, and hence does not die when the human individual dies. The disadvantages of this are that it can be complicated and sometimes expensive, and requires professional help in setting it up effectively and managing it on an ongoing basis.
How much in legal fees does it cost to wind up an estate?
There is no fixed cost. If the estate is under £30,000 it is a Small Estate and the Sheriff Clerk of the local sheriff court can assist you in completing paperwork. If over, then it depends on how extensive the estate is, and whether there is a will (if there is one, the costs are always less than for an intestate estate). If a deceased has a house and one bank account, the work to get a grant of confirmation will be small. If the deceased had ISA’s, shares, insurance, an overseas timeshare, a business, and a dog, then there is considerably more correspondence for the solicitor to do. The cost will not be less than hundreds of pounds, and can go up to thousands.
When is the estate settled up?
Legacies should not be paid out earlier than 6 months after the death, but it may be longer, if, for example, the executor is trying to track down distant family members, or has to get involved in lengthy correspondence about some parts of the estate, or if there is a dispute among family, or if the DSS are investigating possible over-payment of benefits to the deceased during life, or there is income tax due by the deceased – or to him. It is a matter for the executor as to how and when to finalise the estate. If beneficiaries think it is taking far too long, they are entitled to go to court for an order to force settlement.
What happens if a missing beneficiary, relative or creditor turns up?
A relative or named beneficiary that was known about is entitled to insist on payment or receipt of a legacy or share of residue up to 20 years after the death, after which the right prescribes, i.e. is lost. He can sue the executor for payment. A creditor who claims more than 6 months after death is too late.
End of note. For any further information or advice, contact our solicitors.