Intestacy - An expensive lesson
It may have surprised many to see that pop superstar Prince died last year without a Will. The ensuing court wrangles by allegedly 700 purported siblings and descendants making a claim to his estate have been sad to watch, and are no doubt racking up substantial fees for the many lawyers involved.
Unfortunately however, increased legal fees, delays and unexpected beneficiaries can be the result of any person passing away without a Will, not only those with 100 million record sales to their name. The reality is that in Scotland, the distribution of a person’s estate where there is no Will in place (known as intestacy) is determined by law, and often comes as a most unpleasant surprise to those left behind.
Given the complexity of the law, it is perhaps unsurprising that many common assumptions about who will inherit a deceased person’s estate are wrong. For instance, many married couples presume they do not need a Will in the belief that everything will go to the survivor on first death. Whilst in some cases this will be true, this is in fact dependent on the value of the estate, and in larger estates, this can mean that large sums or assets are due to children, or even to the parents and siblings of the deceased. In intestate cases, cohabitants are also in a position to make a claim to the deceased person’s estate, although they have no guaranteed rights and a short timescale of 6 months in which to make an application to the Court for an award, which is made at the discretion of the Sheriff.
In addition, the absence of a Will often results in an increase in both the cost and delay in winding up an estate. If a Will existed, executors would be appointed within the document, allowing them to proceed with winding up the deceased’s estate. As there is no appointment without a Will in place however, an application must be made to the Sheriff Court for appointment as executor, by an appropriate person. Again, the person or people entitled to apply are determined by law, and the deceased’s views about that person are all but irrelevant. In addition, in most cases, a Bond of Caution will be required, which is in essence an insurance policy to protect the estate against any inappropriate actions by the executor appointed by the Court. An annual premium is payable for this for the duration of the estate administration.
Ultimately, a Will provides the framework for an estate to be wound up as quickly and easily as possible in the deceased’s own circumstances, and in accordance with his or her wishes. Their importance cannot be overestimated. Intestacy can bring confusion and concern at the worst possible time for any family, and whilst there is change in sight for succession law in Scotland, it does not appear to be high on the agenda and may be unlikely to see the light of day anytime soon.
If you require further information on the above please contact any member of our Private Client Team.