When someone passes away without leaving a Will, their estate is said to be “intestate.” This can complicate matters for the surviving family and loved ones, as there is no clear instruction on how the deceased’s estate should be managed. In these cases, the administration of the estate follows a framework set out in law. Here’s what you need to know.
1. Appoint an Executor (Executor Dative)
In cases of intestacy, there is no named executor in a Will, so someone must apply to the court to be appointed as the Executor Dative. This involves submitting an application to the Sheriff Court, to grant permission for the selected person to be legally entitled to act. The court follows a specific order of preference for who can apply to be selected, which generally runs as follows:
- The deceased’s spouse or civil partner.
- The deceased’s children.
- Other relatives, in descending order of kinship.
Being an Executor is a significant responsibility. You will be accountable for establishing the estate, completing the necessary legal and tax forms, ingathering assets, settling liabilities, and distributing what remains to the beneficiaries. It’s important to fully understand what the role entails before proceeding.
2. Investigate the Estate
Once the Executor is appointed, their first task is to investigate the estate. This means gathering detailed information about:
- Assets: Bank accounts, property, investments, pensions, and personal belongings.
- Liabilities: Outstanding debts, funeral costs, and any taxes owed.
An accurate Inventory of estate assets and liabilities is essential. Missing details at this stage can lead to complications or delays later in the process.
3. Obtain a Bond of Caution
Before an Executor dative can act, they are usually required to obtain what is called a Bond of Caution (pronounced “kay-shun”). This is a type of insurance policy designed to protect beneficiaries and creditors in case the estate is improperly administered.
Bonds of Caution are typically issued by specialist insurers, and obtaining one requires providing a detailed inventory of the estate. Be aware that certain insurers may have strict criteria, and this step can take time if the estate details are incomplete or complex.
4. Settle Inheritance Tax (IHT) and Apply for Confirmation
After accounting for exemptions & reliefs, if the estate’s value exceeds the Inheritance Tax (IHT) threshold (currently £325,000 in the UK for individual estates), you will need to settle the IHT liability with HMRC before proceeding further. This involves:
- Completing the relevant IHT forms (e.g., IHT400).
- Paying any tax due. A time limit applies and sometimes negotiating payment plans can be involved if liquid funds are unavailable.
Once the IHT position is settled, you can apply to the court for Confirmation. Confirmation is the legal document that allows the executor to access and distribute the deceased’s assets.
Why Getting It Right Matters
Handling an intestate estate is a complex and often stressful process. Errors in the administration of an estate can lead to legal disputes, delays, or even personal liability for the executor.
At Blair Cadell, we’ve been supporting families in Edinburgh and across Scotland for generations. With our deep expertise and compassionate approach, we’ll guide you through the entire process, ensuring the estate is handled correctly, efficiently, and with the utmost care.