It's the subject of many a daytime TV show, and often of personal dreams – to be contacted out of the blue and told that we are the rightful heir to an unclaimed estate left by some long lost relative that we never knew we had. It's also something to be very wary of as it could easily be a scam. On the other hand, there's an often held belief that if you don't have a will and no immediate family, everything will go to the government. But what is the reality of situations like this, and how common are unclaimed estates in Scotland?
How do unclaimed estates occur in Scotland?
There are a couple of situations in which there may be no obvious beneficiaries to a deceased person's estate. The first situation is where the deceased did not leave a will. The second situation is where the deceased did leave a will but some aspect of it has fallen into intestacy – e.g. the named beneficiaries have died and there are no default provisions within the will. In both cases, the Scots law of 'intestate succession' applies and there is a strict order of family members who can be beneficiaries.
Prior rights and legal rights- who can be a beneficiary of an estate in Scotland?
As you might expect, the hierarchy starts close and gets broader – starting with spouse/ civil partner and children or grandchildren. It then goes back up to parents, then siblings or nephews and nieces. The exact division of the estate depends to some extent on the type and value of the assets as well as the nature of the relationship of the beneficiary to the deceased. There are different types of rights – spouses/ civil partners have 'prior rights' which are distributed first. This includes the house and household contents up to specific values, as well as a cash sum. Prior rights may exhaust the entire estate, but not always. If the assets and values are such that there is estate remaining, 'legal rights' then follow (for spouse / civil partners and children) leaving what is termed the 'free estate'. The 'free estate' order starts with children, then goes back to parents and/ or siblings before the spouse/ civil partner.
If there are no known family members in these categories, the net is then widened step by step to include uncles/aunts, then grandparents, then wider family. If living relations are traced, those in the nearest class of relationship to the deceased inherit first and inherit the entire estate. Every living beneficiary in the same class of relationship shares the estate equally among them, and if anyone in this class has predeceased leaving children then their children take one share among them.
The blood relationship is key – step family are not included and have no rights, but so-called 'siblings of the half-blood' are included in limited circumstances. Cohabitants have no automatic rights to an intestate estate and must raise a separate court action to make a claim.
Although the values of prior rights have increased over the years, the fundamental law of succession in Scotland hasn't changed much since 1964 and the results of an intestate division can be quite surprising and out of sync with contemporary families. The Scottish Government has included trusts and succession in its legislative programme for 2022-23, it will be interesting to see what changes come of this.
Finding beneficiaries to avoid unclaimed estates
It's not uncommon for those acting in the administration of an intestate estate to have to instruct a search for beneficiaries to avoid the estate, or part of it, remaining unclaimed. Specialist investigators will spend time researching the family tree on both the paternal and maternal sides. This can quite quickly become complex and time consuming, wider family might be located anywhere in the world, there might be issues with missing documents and difficulties in obtaining contact details even when living relations have been identified. There is a duty to exhaust all reasonable avenues in the search for beneficiaries, even if the expense of doing so might use all of the estate funds.
Unclaimed estates list
Unclaimed estates are relatively unusual because the family net can be very wide and the searches extensive. If there are no living relatives found, and there is unclaimed estate still to be dealt with, this would then be referred to the Queen's and Lord Treasurer's Remembrancer (QLTR) as 'ultimus haeres' (ultimate heir).
These estates are added to the list of those being investigated and any entitled persons who do come forward can put in a claim. There is an initial period of 12 weeks before QLTR will then take on the administration of the unclaimed estate, and then once this administration is completed the estate will be added to QLTR's separate list of estates which remain available for claim – they remain on the list until they are claimed, for up to 20 years. Anyone can search this list, which can be found on the QLTR website, and make a claim if they can prove they are entitled. This would involve applying to the appropriate Sheriff Court for Confirmation to the estate.
Our solicitors can assist with this, and any aspect of the administration of estates, as well as writing wills and advising on succession laws. Please get in touch for more information.