Weir Law is focused on making the complex simple. When it comes to your personal and financial concerns, accessing expert legal advice should be easy.
Perhaps you’ve been thinking about making a will. You might have been asked to deal with someone’s estate and it may feel daunting. Maybe you’re concerned about an inheritance or protecting your home, or it could be that you’re finding it difficult looking-after an elderly relative. Whatever the issue, Weir Law gives you the advice you need to protect you and your family’s future.
We provide legal assistance across a broad range of services, but here are some of the core areas we focus on:
Most people know what a will does – it sets down in writing your instructions for your money and possessions when you die. What a lot of people don’t realise, however, is what happens if you die without having make a valid will in Scotland.
If you die without a will, the Scottish rules of intestacy are applied. This means that your money and assets on death will be distributed according to complicated and inflexible rules that often result in unintended consequences.
Even before your estate can be distributed, a court-based procedure will need to be followed to appoint someone to deal with your estate. This can be an expensive and time-consuming process – something easily avoided with a valid will.
Here is a brief overview of some of the potential pitfalls of dying without a will in Scotland.
If you live with someone but aren’t married or in a civil partnership, your partner will not be entitled to anything if you die without naming them in your will, unless they raise a court action through the local sheriff court.
Remarriage and disinheritance
Unless a professionally written will has been created, there is little that can be done for couples harbouring concerns about future relationships, remarriage or a change of heart in the event of a death. Without a valid will, couples in that situation are putting at risk their intended beneficiaries’ inheritance.
Leaving something to a vulnerable beneficiary
If you would like to leave money (or an asset) to an adult with a disability, this can create serious problems for that beneficiary unless you create a will with appropriate trust provisions included. Without a valid will, a disabled adult who inherits outright from your estate faces a host of potential problems when you are no longer around. Not only can a vulnerable beneficiary lose their entitlement to claim means-tested benefits in such a circumstance, an outright inheritance may first require a guardianship order to be obtained from a sheriff court.
Confirmation / Probate in Scotland
When a friend, colleague or family member passes away, it can be both daunting and overwhelming for the next-of-kin to deal with the daily tasks of administering the estate in accordance with the laws of Scotland. This can be an even more exhausting and time-consuming task if the person who has died did not make a will during their lifetime.
If you find yourself in the situation where you are dealing with a deceased’s estate, it is essential that you are made aware of your rights and responsibilities as executor of the estate. Without legal guidance, you run the risk of a claim against you – by a disappointed beneficiary or even HM Revenue & Customs.
If you decide to administer the estate yourself, it is worth bearing in mind the following:
If there is no will, you must apply to the court to be executor
Unless you are named in the deceased’s will, you do not have the automatic right to act as executor of the estate unless you have petitioned the sheriff court nearest to the deceased’s home address. There are strict rules for such a petition, and in many cases you will be expected to obtain an insurance policy (known as a bond of caution) before the sheriff court will entertain your application.
Where the deceased owned a property, you will need to see the title deeds
This is critically important, since it is often the case that the deceased’s house is the most valuable asset in their estate. The title deeds may be held by a solicitor or the mortgage company. If you are having difficulty tracing the whereabouts of the title deeds, you can obtain electronic copies within a few days via the Registers of Scotland website. A thorough examination of the title deeds and the nature of the deceased’s ownership of the property is essential.
Obtaining confirmation requires attention to detail
If you have been asked by a bank or third party to provide confirmation (also known as probate or letters of administration in England and Wales), this means that you will need to complete and submit a set of official forms that detail the deceased’s assets, personal circumstances and those of the executor(s). The confirmation document contains an inventory, which must be populated to include all assets forming part of the deceased’s estate. In some cases, assets such as insurance policies written into trust or an employer’s death in service benefits may not form part of the estate, so it is important that you are able to distinguish estate from non-estate assets.
You will need to contact all potential beneficiaries
As executor, you have a responsibility to account to all potential beneficiaries of the estate. This means that all children (including formally-adopted children but excluding stepchildren) must be contacted following the death to inform them of their right to make a claim on the estate – even where the deceased’s will states otherwise. The law of Scotland allows all children of a deceased parent the right to claim on the estate, and this right does not extinguish until 20 years following the death. If, during that time, the executor has not provided the potential claimant with their entitlement, the executor may be personally sued by the claimant for the amount they were due from the estate.
You must keep accurate and transparent financial accounts
For the sheriff court and HM Revenue & Customs’ purposes, you will need to obtain the date of death valuations of the deceased’s assets. For complete accounting, you must also ingather the final values of these estate items, together with all interest that may have accrued. Once the legal protocols have been followed to conclusion, the executor must produce a final estate account – showing the amounts received, tax due, professional fees paid, liabilities deducted and amounts to be distributed. This account can be requested by third parties so you are advised to ensure full and diligent accounting.
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Power of Attorney
Have you ever paused to consider what would happen to your money, your house, your personal welfare if you were robbed of your ability to make clear decisions? If you are involved in an accident or have a stroke or are diagnosed with dementia, who would take care of your financial and welfare concerns if you lost the ability to think clearly?
If you think that your partner or spouse or family would simply step into your shoes on your behalf, you’re wrong. The law does not take into consideration any verbal agreements you may have made previously. If you want someone you trust to make decisions for you, you will need to sign and register a power of attorney document.
Put simply: if you don’t already have a registered power of attorney document, you are putting your cash, assets and personal welfare at risk.
Here are some important issues to consider before making your power of attorney:
Your attorney is the person who will make your decisions for you
If you lose the ability to make rational decisions in the future – be it through accident or ill-health – only the person or persons named in your registered power of attorney document will have the legal authority to make decisions on your behalf. If you have named more than one attorney, you will have to specify whether your attorneys can act independently of each other or if they must reach a decision between or among them.
Your attorney should be aware of your financial and welfare matters
It makes sense to appoint as your attorney someone whom you trust, someone with the ability to deal with your finances and health decisions with due regard to your wishes and expectations. It is advisable to consider appointing attorneys who live within easy travelling distance, so that they may attend to any pressing matters quickly and efficiently.
Your power of attorney is completely separate from your will
Your power of attorney ends on your death. If you have named someone as your attorney – to carry out your decision-making in the event of incapacity, this attorney will cease to have any powers over your estate once you have died. A power of attorney is not a substitute for a will, and you are advised to create both a will and a power of attorney to ensure that you are protecting matters now and after you have died.
Creating A Living Will
A living will (more commonly known in Scotland as an advanced directive) is entirely different from an ordinary will. For the avoidance of confusion, the rest of this a document listing your wishes for refusing medical treatment if you become terminally ill, or if you lose the ability to make decisions for yourself in the future.
So long as you have the mental wherewithal to make your own decisions, you have the absolute right to refuse medical treatment if you so decide. However, where a doctor has assessed you as having lost the mental capacity to make decisions, a specific piece of Scottish legislation will determine your treatment – but your attending doctors and nursing staff must give due consideration to your past and present wishes.
For that reason alone it is prudent to create an advance directive, as it sets down in clear terms your instructions for your treatment.
An advance directive is persuasive of your wishes
For example, if you are admitted to hospital in an unconscious or incapacitated state, your advance directive is a useful document to inform your medical and nursing staff of your wishes and preferences at a time when you are least able to communicate these.
If you subsequently became ill those treating you can review your advance directive and act accordingly, however your wishes can be overruled if those in charge of your care determine that you are at risk, or if compulsory treatment must be pursued.
Your advance directive is persuasive of your intentions and wishes, and it is advisable to create an advance directive now to record your wishes for future care.
Trust Advice and Creation
Trusts are often regarded as complicated, but they really don’t have to be. At its simplest, a trust holds assets on behalf of people who cannot or perhaps should not own them outright themselves.
With a professionally drafted trust you can go a long way to protecting your cash, assets and family members. There are a host of financial and welfare benefits to creating a trust, but financial advice must be sought if you are considering a trust – as there are many tax and financial implications you must be made aware of before creating a trust.
There are many forms of trust you can make now or that can be set-up in the event of your death. The type of trust that fits your wishes will depend on your personal circumstances, preferences and financial situation. Each type of trust comes with its own requirements and tax implications – be it Capital Gains Tax, Income Tax, Inheritance Tax or any other tax regime.
A Discretionary Trust gives your trustees absolute discretion regarding the administration of the trust – including how the income (i.e. interest) and capital is to be distributed. This means that the trustees you name in the trust deed will have the right to determine which person or persons receive anything from the trust – and at whichever frequency they so decide. You can provide your trustees with guidance in the form of a letter of wishes, but your trustees themselves will have the final say.
This is a simple version of a trust, most commonly used to hold personal injury compensation money. In a bare trust, one or more beneficiaries has an absolute entitlement to both the trust income and capital. There is no discretion afforded to the trustees, as the identity of the beneficiaries is explicitly stated.
This is most commonly created in a will. If you own a house with someone else and you’re concerned that your surviving co-owner may sell or transfer the house to someone other than your family or loved-ones in the event of your death, you can state that your surviving co-owner can occupy and use your share of the house but not obtain the legal ownership of that share.
The property is held by your trustees on behalf of the surviving co-owner, who is entitled to use and enjoy the property. On the co-owner’s death (or other event specified by you), the property will pass to the beneficiaries you have named in your liferent trust.
Vulnerable persons trust
It is often the case that substantial assets or sums are to be passed to someone who is incapable of safeguarding these assets or sums by themselves. In certain circumstances, a vulnerable person’s trust can protect such a beneficiary from financial embarrassment, however eligibility for a vulnerable person’s trust is predicated upon strict criteria, as there are substantial tax benefits available for this type of trust.
Care Home Planning
Even if you have no immediate need for residential care, it is important that you understand how care home fees are calculated and how your own capital and assets will be treated should your circumstances change in the future.
Depending on where you live in the UK, residential care can cost up to £2,000 per week. It comes as no surprise, therefore, to learn that many people in Scotland are forced to sell their home to be able to cover the cost of their long-term care.
Many people underestimate how much their long-term care will cost and are left in difficult financial positions during a time in their lives when they should be relaxing, enjoying their retirement and spending quality time with their friends and family.
There are many misapprehensions and incorrect assumptions regarding care costs in Scotland. Don’t rely on friends’ and neighbours’ advice on what to do with your assets –
Will I have to pay for all of my care home costs?
If you need to go into care, your personal capital will be assessed. If you have savings and capital (i.e. a house and cash) with a total value of £28,000 or more, you will likely have to pay all of your care home fees until your capital reduces to this limit.
Can I just get rid of my money or transfer my house to my son/daughter?
If you have deliberately gifted away or sold your assets to reduce your capital, the value of these gifted or sold assets can still be included in the assessment capital assessment. This is known as notional capital and without legal input you may fall foul of the rules on deliberate deprivation of capital.
How far back can the council look?
Many people mistakenly believe that councils can only go back as far as seven years for the purposes of their financial assessment. In reality, your local council can examine any transaction in anticipation of going into care, so long as the council’s assessor considers it reasonable to do so.
If you have official documents or papers that require to be countersigned or notarised by an authorised official, you will need a registered notary public to assist you.
A notary public is typically a legally qualified individual who holds an internationally recognised status that permits the official certification of a broad spectrum of documents.
Notaries public play an important legal role in Scottish life where the legal validity of a document requires the swearing of an oath. Only solicitors/notaries in possession of a practising certificate issued by the Law Society of Scotland can act as notaries in Scotland.
The smooth-running of many straightforward matters – such as a house purchase or sale, a formal job acceptance form or the completion of foreign legal papers – can be impeded by the requirement of a notarial signature. Often it can be difficult and expensive to make an appointment with a notary public to ensure the documents or paperwork can be submitted and delivered on time.
Weir Law is a specialist Scottish law firm, providing you with essential personal legal services in a clear and straightforward way.
We help people throughout Scotland make important decisions regarding their future. From our office in Glasgow, we cover the whole of Scotland. And as a modern law firm, we provide you with the advice you need at a time and in a manner that suits you best. So, whether you are at home in Greenock or at work in St Andrews, you can access our legal know-how entirely at your convenience.