When someone dies in Scotland and you have been named as executor in the will, one of your responsibilities is to get Confirmation from the local Sheriff Court. This is a document which gives you the legal authority to administer all the affairs of the deceased person’s estate. It is possible for an individual to get Confirmation on an estate, but many people choose to employ a solicitor to do this, especially in the case of larger and more complicated estates.
If the estate has a value of more than £5,000, you will also need to deal with HMRC, reporting to them the net value of the estate. This is the value of all the assets including property, vehicles cash in banks or building societies and personal possessions like artworks, jewellery and antiques, less the total of any debts the estate has such as bank loans, credit card balances or tradesmen’s bills.
If the estate has a net value of more than £325,000 then you will need to pay inheritance tax of 40% on everything over that threshold. Jointly owned property can be excluded from the value of the estate if the joint owner is a surviving spouse or civil partner, in which case they can inherit the deceased’s share with no tax liability.
If any inheritance tax is due on the estate, this must be paid before Confirmation will be granted by the Sheriff Court. To get Confirmation you will need to fill in form C1 and send this to the court with confirmation from HMRC that either no inheritance tax is due or that it has been paid if it was due. You need to create an inventory of all of the estate’s assets and this inventory, which is part of the Confirmation application, should not deduct any liabilities, unlike the declaration of value given to HMRC.
Once Confirmation has been granted, the executor is responsible for paying any debts from the estate. All debts must be settled before the executor pays out any legacies to beneficiaries named in the will. Creditors are allowed six months after a death to present bills and failure to pay them will mean that the executor has legal liability for them.
It is the executor’s job to check what debts the deceased person may have had with bodies like banks, building societies and utility companies. If debts are greater than the assets of the estate, an executor should seek legal advice as the provisions for deciding how much each creditor will be paid are complex.
Once all the debts have been paid, the final duty of the executor is to make sure that all the beneficiaries of the will get the legacies they have been promised.
