When someone dies, often "probate" (known in Scotland as "confirmation"), must be obtained before the executors can deal with the deceased's money and property and distribute it to the beneficiaries. This will depend on the type and value of the deceased's assets.
Some organisations (such as banks and investment managers) will ask to see confirmation before they will release funds.
Confirmation is a legal document from the court authorising the executors to uplift any money or property. It allows bank accounts to be closed and investments and / or property to be sold or transferred. Confirmation is usually obtained from the sheriff court nearest to where the deceased lived.
How is confirmation obtained?
The key steps to obtaining confirmation are:
1. Is there a will?
The deceased's family or friends should establish if there is a valid will in place.
If there is a will, this usually names "executors". Executors are responsible for uplifting the deceased's money and property and ensuring it is distributed to the beneficiaries entitled to the estate.
If there is no will, an executor or executors must be appointed by the court. Usually, the person(s) entitled to the deceased's estate is / are entitled to be appointed as executor(s). They are usually appointed by the sheriff court nearest to where the deceased lived. If there is no will, the deceased's money and property is usually due to their closest surviving relatives.
2. Investigating the estate
Any organisations where the deceased held money or property or owed money must be contacted to advise of the death and to find out the value of any assets or debts.
It is important to check if any significant gifts were made by the deceased in the seven years before their death, as these may use up the deceased's inheritance tax "nil rate band".
3. Preparation of the application for confirmation
The information obtained about the deceased's assets and liabilities will allow the executors to prepare an inventory of assets and any liabilities. The inventory is a snapshot of the assets and liabilities at the date of death.
This inventory will form part of the executor's application for confirmation to the relevant sheriff court. The form used for the application is "form C1", which can be obtained online. The form C1 summarises the deceased's personal details and details of the executors, among other things.
If there is no will, the executor usually needs to obtain a "bond of caution", which is an insurance bond an executor must take out by law.
4. Submitting inheritance tax return and paying any inheritance tax
An inheritance tax return (form IHT400) may be required if the estate is high value, inheritance tax is payable, or if the estate is complicated / contains particular assets.
If an inheritance tax return is required, it must first be submitted to HMRC, and any inheritance tax paid, before the executors can apply for confirmation. When HMRC has received the inheritance tax return and the correct amount of inheritance tax due on the estate (if applicable), it will send a letter (containing an authorisation code) to allow the executors to submit the application for confirmation to the court.
Inheritance tax must usually be paid by the end of the sixth month after the person's death. If there is a property (or other qualifying assets, such as shares in a business), the inheritance tax can be paid in ten annual instalments. If inheritance tax is not paid within the relevant timescales, HMRC charges interest. The inheritance tax return itself is usually submitted by this point, but must be submitted to HMRC within 12 months of the end of the month in which the death occurred, otherwise penalties may be issued.
If no inheritance tax return is required, the application for confirmation can be submitted directly to the court.
A guide on when an inheritance tax return is required can be found here.
5. Applying for confirmation
The executors then apply to the sheriff court for confirmation with the completed form C1, sending the original will (if relevant) and any other relevant papers. As is mentioned above, confirmation is usually obtained from the sheriff court nearest to where the deceased lived.
The timescale to receive confirmation varies between the different sheriff courts in Scotland. The sheriff courts in Edinburgh and Glasgow typically have longer turnaround times, due to the higher volume of applications.
The sheriff court charges fees for processing applications for confirmation. The relevant fees can be found under "commissary".
Some executors decide to deal with a deceased's assets themselves without assistance from a solicitor, whereas others may ask a solicitor to deal with the estate. Alternatively, executors may deal with some of the process themselves and engage solicitors to deal with specific elements. The level of assistance required can all be discussed with your legal advisor.
If you have any questions or wish advice in relation to estate administration, please get in touch – we would be happy to assist!