legal

guide for executors

1. registration of 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 in the Registrar’s Office of the District either where the deceased lived or where the death took place, if different.

Registrars now prefer an appointment system for notification and registration. 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 (as far as you are aware)

The Registrar will offer the “Tell Us Once” system and we recommend using that to ease administration at a difficult time. Tell Us Once is a service that lets you report a death to most government organisations in one go.

When you register the death the Registrar will:-

• Let you know if the service is available in your area
• Give you the phone number
• Give you a unique reference number to use the Tell Us Once service online or by phone

Before you use Tell Us Once you will need the following details of the person who died:-

• Date of birth
• National Insurance number
• Driving licence number
• Vehicle registration number
• Passport number
• Details of any benefits or entitlements they were receiving e.g. State Pension
• Details of any local council services they were receiving e.g. Blue Badge
• Details of any public sector or armed forces pension schemes they were receiving or paying in to
• Name and address of their next of kin
• Name and address of any surviving spouse or civil partner
• Name, address and contact details of the person or company dealing with their estate (property, belongings and money), known as their ‘Executor’ or ‘Administrator’

The Government website indicates that you need permission from the next of kin, Executor, Administrator or anyone who was claiming joint benefits or entitlements with the person who died, before you give their details.

Tell Us Once will notify:-

• HM Revenue and Customs (HMRC) – to deal with tax and cancel benefits
• Department for Work and Pensions (DWP) – to cancel benefits e.g. State Pensions/Income Support
• Passport Office – to cancel a British passport
• Driver and Vehicle Licensing Agency (DVLA) – to cancel a driving licence and to remove the person as the keeper for up to 5 vehicles
• The local council – to cancel Housing Benefit, Council Tax Benefit, a Blue Badge, inform council housing services and remove the person from the electoral register
• Public sector or armed forces pension schemes – to stop pension payments
• There is s a different process to update property records if the person who died owns land or property

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

• A white form, which should be passed immediately to the Undertaker, as this is required to finalise funeral arrangements
• An abbreviated Extract Death Certificate
• If requested, an Extract Death Certificate, which we recommend is obtained for use in the executry administration. We would advise two or three Extract Death Certificates are obtained, as photocopies are not accepted as valid documents.

2. 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 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. Consideration can then 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 any professional advisers they choose to appoint. In most cases, this is a firm of solicitors.

Small Estates

Certain small estates, generally when the total value of the estate is below £30,000 in value, may be administered without obtaining Confirmation. Generally 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 Executries.

3. 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, an earlier meeting may 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
• National Insurance Number
• 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
• TESSA books/statements
• 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 of Scotland for the purposes of money laundering regulations. We shall issue a link to you via email through a portal, Amiqus, for you to upload your photographic and address identification.

4. 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

(5) 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 current 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:-

• as an application to the Sheriff Court for Confirmation on the estate,
• as an Inheritance Tax Return Form for 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 (Inland Revenue) before application for Confirmation can be made to the Sheriff Court. The Capital Taxes will 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 valuations 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. The cost of this insurance 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.

(2) 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”. The 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.

(3) 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. are quite willing to pay the 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 check their records to ascertain whether or not too much Income Support or other benefit has been paid (i.e. 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 such 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 make a payment to the legatees of the amount of the legacy, or arrange for delivery of the items bequeathed, and issue a Form of Receipt, acknowledging such bequest, to be signed and returned by the person receiving the legacy.

(4) 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 assets, debts/liabilities and legacies in 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. This means that the value of the deceased’s estate has to be above the sum of £325,000 before inheritance tax is due to be paid. Between spouses/civil partners a combined threshold of £650,000 may be applied. These thresholds may be increased if the deceased owned a home, or a share of a home and the deceased’s direct descendants such as children or grandchildren inherit the home, or a share of it. The additional home allowance that may apply is as follows:-

For deaths in the tax year

2017/18 – £100,000

2018/19 – £125,000

2019/20 – £150,000

2020/21 – £175,000

The above allowances can be carried over and perhaps “doubled” for spouses/civil partners.

IHT will be calculated on all the deceased’s assets after deduction of debts and liabilities and which exceed the threshold and 40% tax will be exercised 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 the Inland Revenue 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 is retained for many years in case of any query arising in the future, regarding the estate.