An intestate estate is one in which the deceased person died without a valid will. It is possible for an estate to be partially testate (have a will) and partially intestate if the deceased person had a will which only related to part of their estate.
Appointing an executor
The procedure for administering intestate estates is slightly different than for estates where there is a will. Firstly, someone has to be appointed as the executor (or executors) of the estate and this involves a petition being made to the Sheriff Court. The person applying to be appointed executor must demonstrate to the Sheriff Court that they are legally entitled to act as executor.
The executor is the person responsible for administering the estate – they have to ascertain what is in the estate and the value of the assets, take steps to ingather the assets, settle any debts and distribute the estate to the correct beneficiaries.
Obtaining a Bond of Caution
Once someone has been appointed as executor, the next step is for them to obtain a Bond of Caution (pronounced ‘kay-shun’). A Bond of Caution provided by an insurance company is a guarantee (for the benefit of creditors and beneficiaries) that the estate will be distributed according to the Scottish Laws of Succession.
After Caution has been obtained by the executor, the next step is to apply to the Sheriff Court for a Grant of Confirmation. Confirmation is a legal document issued by the Sheriff Court giving the executors authority to uplift property belonging to a deceased person and to administer and distribute it according to law. To obtain the Grant, an application for Confirmation (being a form C1) is lodged with the Sheriff Court which includes an inventory of the deceased person’s assets. Once Confirmation has been granted, the certificates of Confirmation will give the executor title to administer the estate, in particular to close bank accounts and to sell / transfer the assets.
The value of the estate
If the value of the estate is small and doesn’t include a house, it may be possible to deal with the estate on an informal basis, without the need for the Bond of Caution or Confirmation.
The executor is also required to ascertain if there is any inheritance tax (IHT) liability for the estate. They will either complete a short inheritance tax summary (a form C5) if there is no tax payable, or a full inheritance tax account (form IHT400) where tax is payable or where the estate is complex.
Once the executor has uplifted the funds due to the estate and has settled all debts and liabilities, they are required to distribute the estate to the beneficiaries. There are rules set out in legislation which determine who is entitled to inherit the estate of a deceased person and that is determined by their degree of relationship to the deceased.