How to deal with bereavement
The death of a loved one is never easy to bear. Thankfully, most of us experience death in an intimate way on only a few occasions during our lifetime. At this point, many find solace in“keeping busy” with practical considerations, while for others this is a necessary but tortuous task. For those in this position it can be useful to have a guide to help navigate the road ahead.
Registering the death
Once a medical death certificate has been produced by the attending physician it will be necessary for the death to be registered. For deaths occurring in Scotland, this is to be done at any local office of the Registrar of Births, Deaths & Marriages within eight days of the death.
During the Covid 19 pandemic, it is not possible to register deaths in person at the Registrar’s Office. Instead, the process must be completed remotely. You should let the doctor providing the medical death certificate know which Registration Office you wish to use and they will arrange to email a copy of the medical death certificate both to you and to the Registrar. You should then contact the Registrar by telephone to begin the official registration process. You should have at hand, if possible, copies of the person’s birth and (if applicable) marriage certificates. This is so that the Registrar can identify the correct individual on the register and information regarding the death can be recorded accurately.
Many Registrars operate a “Tell us Once” service whereby they will notify various government agencies of the death, such as the DVLA, DWP and Council Tax office. If you wish to use this service you should additionally take details of the person’s National Insurance Number, their passport and driver’s licence.
It should be noted that the death must be registered before the funeral can go ahead and so it is wise to attend at the Registrar’s office as soon as possible.
Arranging the funeral
Many individuals will have given thought to their preferred funeral arrangements during their lifetime and this is always to be encouraged. Decisions regarding the funeral usually have to be made very quickly following the death and it is helpful if the deceased has left some guidance as to their wishes for those left behind. A statement of whether cremation or burial is favoured is useful as well as more detailed provision regarding the nature of any service to be held. It is important to make contact with the deceased’s solicitor as there may be a Will or other paperwork which covers these points. At present, due to the rules on social distancing to prevent the spread of Coronavirus, only a small number of close family or household members can attend a funeral. If there is no family or household member available then a friend may attend in their place. These rules are subject to change and up-to-date guidance on funeral services can be found on the Scottish Government’s website.
In most cases, the deceased’s bank accounts will be frozen once notification of the death has been given to the bank. However, the bank will release funds to settle the funeral invoice and this can be presented to them for payment provided there are sufficient funds in the account.
As well as providing details of funeral instructions, the deceased’s Will should also specify who is appointed as the Executor. The Executor may be a family member, a close friend of the deceased, or even a professional person such as a solicitor, or a combination of these. It is the responsibility of the Executors to find out what assets the deceased owned, to pay any debts due, and to distribute the estate to the beneficiaries as directed in the Will. The Will may leave legacies of particular items such as pictures or jewellery (called “specific” legacies) or of money (called “pecuniary” legacies) to one or more individuals or charities before stating how the remainder of the estate is to be distributed. The beneficiaries who receive the remainder (or “residue”) of the estate are called the “residuary” beneficiaries.
If there is no Will then the estate is “intestate” and the law provides rules to determine who is entitled to be appointed as Executor and how the estate is to be divided. Where the deceased is survived by their spouse and/or children, one or more of these relations can be appointed to act as Executor and this is done by making an application to the local Sheriff Court. In such circumstances it will also usually be necessary for the Executor to obtain a Bond of Caution (pronounced “Kay-shun”) which is an insurance policy taken out to protect the estate beneficiaries and creditors in the event that the Executor does not distribute the estate properly. There are detailed rules governing who is entitled to an intestate estate and the surviving spouse will not necessarily inherit everything under these regulations. Whether there is a Will or not, it is helpful at this stage to obtain some guidance from a solicitor who will be able to advise what action is required in order to administer the estate to ensure that this is done in accordance with the law.
Dealing with the estate
In many cases, and depending on the nature and value of the estate assets, access to the deceased’s money and property is suspended, and their accounts frozen, until such time as the Executors obtain “Confirmation” to the estate. Readers may be more familiar with the term “Probate” which is heard widely in the media and refers to a similar process followed in England & Wales. Confirmation acts as a link between the person who has passed away and their Executors. Obtaining Confirmation allows the Executors to actually deal with the estate assets including ingathering funds from bank accounts, having life policy proceeds released, and selling or transferring shares or property.
The process of obtaining Confirmation can be complex and time-consuming – even a straightforward estate is likely to take between six months and one year to deal with, and more complicated estates can take much longer. The potential for delays in the process is greater during the Covid 19 pandemic as businesses and courts adapt to different ways of working. It is for this reason that many Executors choose to use the services of a solicitor who is familiar with the procedures involved. In order to apply for Confirmation it will be necessary to prepare a complete Inventory of the deceased’s assets and their value as at the date they passed away. This will involve writing to banks, insurance companies and fund managers in order to investigate the estate. Similarly, any debts due by the deceased should be identified so that these can be repaid once the Executors have access to estate funds. The Executors should also ascertain whether the deceased made any gifts within the seven years prior to their death as these will require to be taken into account when completing the estate tax forms. Once all this information has been gathered, the Confirmation forms and estate tax return can be completed and an application submitted to the Sheriff Court for Confirmation to the estate .The relevant Sheriff Court will be the Court in the area where the deceased person was domiciled (in most, but not all, cases this will be the same as their place of residence). The Sheriff Court provides a bound Confirmation document together with individual Certificates of Confirmation for each asset forming part of the estate.
Thought must also be given as to whether the estate is liable to Inheritance Tax and to ensure that any relevant reliefs are applied for. Under the Inheritance Tax rules, where an individual leaves their estate to a spouse or charity, no Inheritance Tax is payable. In other circumstances, a married couple can ultimately leave up to £650,000 of assets to children or other beneficiaries before there is a liability. New Inheritance Tax rules were introduced in April 2017 meaning that, where a married couple leave their home to direct descendants, an additional Inheritance Tax allowance is available (this is currently £350,000 per couple and it will increase in line with the Consumer Prices Index from April 2021). The new rules are complex and outwith the scope of this article but it is recommended that professional advice is sought in relation to their application.
As part of the process of dealing with the estate, it will also be necessary to bear in mind the question of legal rights. Legal rights are the rights that children have in the estate of a deceased parent, even if the Will states that the whole estate is to pass, for example, to a spouse or other individual following the death. These rights are enshrined in the Succession (Scotland) Act 1964 and they state that, where someone is survived by a spouse and children, the children are entitled to claim a one-third share of the net moveable estate amongst them. The share increases to a one-half of the net moveable estate if the person is survived by children only. In most cases, net moveable estate means the whole estate except for any flat or house owned by the deceased, after deduction of any funeral expenses and other debts due. Children have twenty years in which to claim their legal rights and so it is sensible to address this issue earlier rather than later in the course of the estate administration.
Ingathering the estate
Upon obtaining Confirmation, the Certificates of Confirmation can then be sent to thedeceased’s bank, any life assurance company, investment provider, or other asset holder, together with authority to close the accounts and to either ingather the funds held or to transfer assets such as shares to the beneficiaries. It is very important that all estate money is kept separate from the Executors’ own personal funds. However, it is not necessary for Executors to open a separate bank account if a solicitor is dealing with the estate for them. Once any debts due have been paid and there are sufficient funds to do so, any pecuniary (financial) legacies can be settled, and the remainder of the estate distributed. However, the Executors should not pay out the estate until a period of six months has passed since the death took place. This is because creditors have six months within which to make a claim against the estate for unpaid debts. In the event that a claim is made and the Executors have already distributed the estate, they may find themselves personally liable to pay the sums due.
Accounting to the beneficiaries
Executors have a duty to account to the residuary beneficiaries for the way in which they have dealt with the estate. In practice, this means producing accounts showing the estate assets that have been ingathered, any debts that have been settled, or legacies paid, as well as the costs of the administration process, including court and solicitor fees. It is important that the residuary beneficiaries can clearly see from the accounts the amount that is due to them at the end of the day. The accounts should be approved by the residuary beneficiaries before the final amounts owed to them are paid.
Dealing with the administration of the estate of a family member or close friend can add to the stress of an already difficult and emotionally draining time. Much of the burden can be relieved by asking for the help of a solicitor with expertise in the field who can guide you through the legal processes with kindness and efficiency.
For further information contact Amy Watson