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It is a common misconception for many people, that if they die while married or with children, they do not require a will as their estate will pass to their spouse or children anyway. However, this is not always the case, and dying without a will may involve time-consuming and costly procedures which could be avoided by putting in place a simple will.
The term intestacy refers to the situation where a person dies without a valid will. In Scotland, the intestacy rules are found in the Succession (Scotland) Act 1964 ("the Act"). In the absence of a will, this Act provides instructions for the division of the deceased's estate. There are various fixed entitlements with little room for flexibility. There are also a number of practical steps that must be taken when someone dies intestate, which are not required if a person dies with a will.
Who can be executor of an intestate estate?
Under a valid will, the chosen executors are appointed by the deceased and can begin to administer the estate immediately with no further formalities required. This can be useful when dealing with immediate requirements such as funeral arrangements or accessing funds to pay urgent bills or expenses. However, when someone dies intestate, an application to court is required to appoint executors to administer the estate, and prior to this it must be proven that there is no other person with the authority to deal with the deceased's estate.
To become an executor of an intestate estate you must be entitled to benefit from the deceased's estate under intestacy laws. There is a fixed order of preference of those who are entitled to be appointed as executor provided by the Act as follows:
- The surviving spouse or civil partner
- The deceased's next of kin, or closest relatives
- Other more remote relatives, in the order in which they are entitled to inherit under the Act
- The deceased's creditors if appointed
- The procurator fiscal or a judicial factor
As you can see, this may result in someone being appointed executor who may not be the deceased's choice. In an intestate estate it is normally only one executor that is appointed, whereas with a will you can appoint as many executors as you like, which can spread the administrative load.
Appointment of Executor
The first step in the process of being appointed executor is to petition the relevant court. The petition usually includes the place and date of the deceased's death, that they died intestate, and where they were usually resident. The person seeking appointment must also specify their relationship to the deceased and why this gives them the right to be appointed as executor. Once the court receives the petition, it will be publicised by the sheriff clerk and after nine days, if the petition is unopposed, the executor will be appointed. There are usually costs involved in submitting this petition including legal fees for preparation of the petition and court costs.
Bond of Caution
The executor will then be expected to lodge a "bond of caution" with the court. This is a special form of insurance and protects beneficiaries from any maladministration by the appointed executors. A bond of caution is obtained from specialist insurance companies, and a one-off premium is payable from the estate, which is based on the gross value of the estate. As a result, this can often be substantial, and is an expense that is not required where there is a will.
Division of Estate
After the executor is appointed and the bond of caution is paid and lodged, the estate administration proceeds in the normal manner and Confirmation (Scottish probate) is applied for. However, it is after the granting of Confirmation that the process of an intestate estate again diverges from that of a testate estate. Where there is a will, the estate is then divided as per the deceased's directions in their will. However, where there is no will, the estate is divided as per the Act.
For deaths after April 2024, the spouse receives the house, furniture, and cash plus a further cash right of up to one third of the estate (not including land and buildings). The children then receive everything else. If there are no children then the spouse receives everything and if there is no spouse, but children, they receive everything. If there is neither a spouse or children, then things get a little more complicated, with assets passing back up the way to parents or siblings or remoter descendants. While the directions in the Act may reflect the deceased's wishes, this is not always the case and can result in a division of the estate, which is not what they would have wanted, or assets bypassing the spouse in favour of young children.
In summary, it is always preferable for a simple will to be put in place to accurately reflect the deceased's wishes, provide for spouses, and put suitable safeguards around inheritance by children. Importantly, cohabitants do not automatically inherit under intestacy in Scotland. Step-children who have not been formally adopted also do not automatically inherit. With more blended families than ever in Scotland, it is important to note that the current intestacy rules do not automatically extend to these individuals. Adequate provision could, however, be made for co-habitants and/or step-children in a will.
Having a will in place also saves on unnecessary costs and procedure involved in an intestacy, including the extra application to the Court and putting in place the bond of caution. People often hold off putting a will in place due to not wishing to think about what will happen when they are no longer here, but it is always better to take some of the burden from your loved ones.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.