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After death - dealing with an estate

This advice applies to Scotland

How to deal with the estate of a person who has died

When someone dies there are a lot of practical things to do and it can be difficult to know where to start. Some people get a solicitor to sort out all the property and possessions and for some estates this may be wise especially if there is a privately owned home or land and shares and investments.

You may be able to deal with some matters yourself.

For example, you will probably need to:

  • arrange the funeral - find out more in Arranging a funeral

  • sort out the belongings and property of the person who has died - this is known as their estate

There’s a full list of what to do in What to do after a death in Scotland on the Scottish Government website

You might be named in a will to sort out the estate or you might be the nearest relative of the person who has died and you need some guidance. This page may help you to decide what you can do yourself and what you may need help with from the court or a solicitor.

What is in an estate

Everything owned by a person who has died is known as their estate. The estate may be made up of:

  • money, both cash and money in a bank or building society account. This could include money paid out from a life insurance policy
  • money owed to the person who has died
  • shares and investments
  • property, for example, their home
  • personal belongings, for example, their car or jewellery

If the person who died owes money to other people, for example, on a credit card, for fuel, for rent or a mortgage, this comes out of the estate.

The estate of the person who has died is usually passed to surviving relatives and friends. This is done either according to instructions in the will or if the person died without leaving a will, according to certain legal rules. Find out more about Wills.

For information about the rules when there is no will, called rights of succession, see What to do after a death in Scotland on the Scottish Government website.

Check if there is a will

The will usually contains instructions about what the person who died wants to happen to their estate. Often this includes who they want the executor to be. Normally it provides details of what the person who has died wanted to happen about their property and belongings.

When there is no will or it can’t be found it means the person died 'intestate'.

Find out more about what happens if someone died without a will or a will that isn’t valid on the Scottish Government website. If you need more help contact your local Citizens Advice Bureau.

Who deals with the estate

Executors

An executor is the title of the person who will be in charge of sorting out the estate. All estates need an executor and if there isn’t one the court will appoint one. Often they are named in the will. It could be a solicitor, member of the family or a friend. There can be more than one executor. They have to agree about how to deal with the estate. If they can't agree a court may have to be asked to make a decision about certain issues to do with the estate. It will always be cheaper if the executors can take decisions without having to go to court.

If there is no executor one can be appointed by applying to the sheriff court. You may need a solicitor’s help to do this or the sheriff clerk in the local sheriff court might help you to apply to court. The court is likely to agree to you becoming the executor if you are the married partner, civil partner or next of kin.

An executor may have to apply for a special legal authority before they can deal with the estate. This is called confirmation.

It is usually against the law for anyone to start sharing out the estate or to get money from the estate, until you have legal permission to do so.

If someone lived and died elsewhere in the UK there are different rules and processes that apply.

Sorting out the estate

Step 1 - Valuing the property and possessions

The first step is to find out the value of all the property and belongings of the person who has died.

Depending on the size of the estate there are different procedures to use to have it valued. An executor has to make up a complete list of all the property and possessions called an 'inventory' and in many cases then apply for 'confirmation'. There is detailed guidance on the HMRC website about applying for confirmation.

Look first for any special valuations mentioned in any insurance policies. When someone has valuable goods they may have been added to the insurance policy as specific items.

If the estate is worth £36,000 or less

You may already know roughly what the value of the property, any land and belongings are.

If the person who died didn’t own any property or land, you should check if they had possessions worth more than £36,000. There is a special process for estates worth £36,000 or less. An estate of that value is called a 'small estate'. You can go to the sheriff court to apply for 'confirmation'. You have to make an appointment with the sheriff clerk to help you to draw up the list of belongings and other valuables and money of the person who died.

You must take all the relevant information with you to the court including:

  • details of who died including the original death certificate

  • names and addresses of the executors

  • original will and any related papers - like updates to the will (called codicils)

  • bank and building society account details with statements and balances

  • details of property owned - for example, a small property, garage, parking space, boat, car or timeshare

  • cash value found in the home

  • furniture and personal effects listed with an estimated value - if there are any valuable items you may need to have them assessed for value by an auctioneer

  • insurance policies

  • other savings - for example, with a local club or workplace, for a special purpose

As long as the total value is less than £36,000 and all the other documents are valid and correct you can get a certificate of confirmation fairly quickly.

You can then use that certificate to release the funds from all the places they are being held and distribute the money or possessions according to the will and pay any debts due. You usually need to wait 6 months before you can do this in case there are other people or organisations that are due funds from the estate.

There are more details and guidance about dealing with a small estate on the the Scottish Courts and Tribunal service website.

In some cases you might have to fill in another form to make sure that no inheritance tax is due. This is to check that the small value of your estate is officially correct and the estate is an 'excepted' estate (exempt from paying inheritance tax) because of its low value.

If the estate is worth over £36,000

If you are the executor of an estate worth more than £36,000 and you know that there are some difficult issues to be dealt with you should get legal help. Sometimes the estate itself is very straightforward but there can be family disputes about possessions that a solicitor may be able to help with. You can however probably start to list the value of all the property and belongings to start the process of 'confirmation'.

You have to be very careful if you are acting as the executor on your own without legal help. If you make a mistake and miss out some details about the property, money and belongings owned by the person who died, you could be held liable and have to pay a financial penalty.

As executor you should make sure you have access to all the papers and accounts of the person who has died, including those that might exist digitally on websites.

Make sure you have some copies of the death certificate to send as proof of identity to the places where there are assets that need to be released.

You may also need copies of the will that names you as executor.

Check how to order copies of death certificates on the National Records of Scotland website

You have to check if the person who died had financial or other assets like:

  • bank or building society accounts - ask for details of standing orders and balances. A joint account has different rules from an account only in the name of the person who died

  • a car - estimate value from age of car. You could ask the insurance company for an estimated value

  • personal belongings - you may need to use an auctioneer for any valuable items, for example, jewellery, paintings or antiques

  • season tickets and rail cards - you might be able to get a refund

  • cash - estimate value in sterling of any foreign currency

  • employee benefits - write to employer to check about in-service benefits, holiday pay and occupational pension

  • foreign assets - you will need legal help to value and retrieve foreign assets

  • gifts granted to others - this is complicated and you may need advice. It is about money, property or assets given away in the seven years before death deliberately to avoid inheritance tax

  • investments - you may need help from a stock broker or accountant to estimate the value of investments. This may mean you have to pay a fee

  • insurances - you may need to carry on paying some of these, for example, building insurance but others may supply a refund

  • income tax - get in touch with HMRC with proof of death (you may be able to use Tell Us once) and ask for advice if you are unsure what to do next

  • life assurance policies - get a balance of the value but do not include the value of any policies with a named beneficiary as they do not form part of the estate for the purposes of assessing inheritance tax due

  • national savings - send evidence of certificates and if the value is low they may be paid straight to you. May be complicated if there is interest due

  • state and private pensions - check all personal pensions and state pensions from the DWP. There might be a survivorship clause that names a beneficiary on a private pension. Its value might still need to be listed for confirmation but it would be paid out to the beneficiary

  • premium bonds - these can be cashed in and are easy to value as no interest is due. They are face value bonds

  • property - you can check equivalent properties in the area for an estimated value. If there is a joint owner with a survivorship destination clause this is not valued as part of the estate on the confirmation application. It does have to be listed on tax statements Form C5 or IHT400. You might need legal help for what to do with a property

  • social security benefits - any payment books must be returned with a copy of the date of death in case there has been an overpayment. The Tell us Once service can let these agencies know someone has died. A funeral support payment may need to be paid back if there are funds from an insurance policy paid out on death

  • subscriptions - check if there are any in addition to standing orders or direct debits from the bank account

  • TV licence - ask for a rebate if possible

Joint bank accounts

Account in joint names of married or civil partners

If a joint account was held by spouses or civil partners, and both contributed to it, it is presumed that the money is held by them equally. Half the balance on the date of death is therefore presumed to belong to the person who died. Most banks allow the surviving account holder to have access to funds in the account.

If only one person contributed to the joint account, the balance would be held to belong to that person.

A surviving joint account holder might have to prove that they had paid in all the money in the account, for the account to be excluded from the estate of the other account holder who has died.

Account in joint names of holders who were not married or in a civil partnership

If an account is held in joint names of people who weren’t married or in a civil partnership:

  • the executor must establish how much of the joint account belonged to the person who died. This doesn't affect the surviving owner's right to withdraw money if a bank mandate allows it. The information is needed so that the estate can be valued for inheritance tax and if the surviving account holder is not the executor there may be problems if the account holder uses a lot of the funds before the estate has been settled and valued

  • if there are more than two surviving account holders, the bank will ask them for a new mandate authorising future transactions through the account

  • the bank will stop transactions on the joint account if the balance is overdrawn and part of this debt will become a claim on the estate

  • the surviving account holder can continue to write cheques and draw on the account, if the account mandate at the bank provides for this. If there is no mandate, the bank will stop transactions on the account and payment will only be able to be made on the authority of the executor, acting along with the surviving account holder

Step 2 - Executor pays any debts due from the estate

When a person’s estate is being sorted out, once it’s clear how much money and property they had, their debts need to be paid. Everyone will have some debts from things like rent, mortgage, phone and energy bills.

Many people organise accounts and bills for services on their mobile phone.

Write to or email as many people and organisations that had contact with the person who died and let them know about the death. These contacts are known as creditors. Ask for final balances on any accounts. Also ask for evidence of why it is due, for example, the person who died may have had an arrangement for paying a debt monthly but still owe a large part of the original sum.

Check if a carer or other relative has been helping with this. Check if they owed money for:

  • credit agreements - like hire purchase, credit cards or payday loans

  • council tax

  • electricity or gas

  • mortgage, rent or factors fees

  • store cards or shop accounts

  • telephone and mobile phone

If you are the executor keep a note of all the money that may be due to be paid out of the estate. 

If any creditor starts harassing you for the debt, find out what action you can take to protect yourself.

Step 3 - Paying inheritance tax and filling in tax forms

Some estates are 'excepted estates'. This means that no inheritance tax needs to be paid. Even if the value of the whole estate is less than the threshold for paying inheritance tax you still might have to complete the relevant HMRC tax form.

When the estate is worth £36,000 or less the sheriff clerk can help you to work out if you need to complete a form for HMRC. This could be, for example, because the person who died gave away a lot of assets and money within seven years of their death. In some cases this may be viewed as deliberately getting rid of assets to avoid paying tax.

Step 4 - Applying for confirmation

There are specific forms that have to be completed to apply for confirmation when you think the total value of the estate is worth more than £36,000.

These are:

  • Form C1 called the 'inventory'

  • Form C5 or IHT400

If you plan to complete these forms on your own you must be careful to include all the assets and property and possessions of the person who died. Even if a person has given away their home to someone else to live in you must include its value on this form.

There is guidance on how to complete these forms on the GOV.UK website.

These forms are specifically for someone who lived in Scotland.

There are different forms and a different process for settling the estate of someone who lived in England and Wales.

If you have a solicitor who normally deals with the legal affairs of your family they may be prepared to check what you have managed to complete as the executor. This might mean that you can negotiate a lower fee for their guidance as opposed to the cost of them acting as executor.

After confirmation

Once a certificate of confirmation has been granted the executor can bring together all the assets and property to start the process of distributing the estate. When a property has to be sold it is wise to use a solicitor to complete that process.

The executor has to wait for at least 6 months after a death before distributing the possessions and assets. This is because it can take some time before it is clear who the person who died owed money to for household bills and other commitments.

If there is a will

An executor may be able to complete their tasks by distributing what the will says is due to the beneficiaries.

In Scotland married or civil partners or children of the person who died can challenge the will if they don't agree with what it says. They can do this by exerting their 'legal rights'. If this happens the executor should get a solicitor’s help.

There is more information about legal rights and what happens next on the Scottish Government website.

If there is no will

If there is no will there are complicated rules about how to distribute property and belongings after death. They are called the rules of succession. There is more information about the rules of succession on the Scottish Government website

Demand from the Department for Work and Pensions or Social Security Scotland for overpayment of benefits or tax credits or funeral support payment

In some cases the executor may receive a letter from the Department for Work and Pensions (DWP) or Social Security Scotland asking for repayment of overpayments of benefits or tax credits or funeral support payment. The executor may consider they already have settled any outstanding debts to the DWP or Social Security Scotland. It is possible that arrangements made between these agencies and the person who has died have been overlooked or were not complete at the time of death.

An executor who receives a letter from the DWP or Social Security Scotland asking for reimbursement should get advice from their local Citizens Advice Bureau who can help to assess the claim and what, if anything, may be due.

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