My Probate Partner offers support guiding locals on how to deal with someone’s estate after they die, in Scotland

When a spouse or family member dies, it is essential to deal with everything they owned on the day they died, including their home, belongings, savings and investments. This is considered to be their ‘estate’.

In this article, Mike Davis, Founder and Managing Director of My Probate Partner shares insight on how to navigate estate when someone dies in Scotland.

The immediate things

Following the death, you’ll need to create a list of all the assets and debts in the estate with their ‘date of death’ values. The easiest way to do this is by contacting all the organisations the person who died had a financial relationship with. You’ll usually need to show them a death certificate – some companies will require a hard copy in the post.

If there are a lot of companies to contact, you might consider using Settld’s free notification service.

What is ‘Probate’ or ‘Confirmation’?

In around half of all deaths, you will need to obtain a legal document to be able to deal with the assets. This is officially called a ‘Grant of Confirmation’ in Scotland, but often referred to simply as ‘probate’.

Determining whether probate is necessary will be the responsibility of the person appointed in the Will (the ‘executor’), or a close family member if there is no Will. It will also depend on what makes up the person’s estate and how certain assets are owned, including property.

If you do apply for probate/Confirmation, you’ll need to include a list of all the assets in the estate and the total of any outstanding debts. Valuing the estate will also help you determine which forms you’ll need to use to apply for Confirmation.

What is Inheritance Tax?

Usually, if the estate is worth less than £325,000, or the entire estate passes to a spouse, civil partner or charity, there is no Inheritance Tax to pay.

If the estate is worth more than the individual tax limit of £325,000, there are a few exemptions available to avoid paying tax, like using a deceased spouse’s tax allowance, or the newer ‘residence’ tax allowance if the family home is passing to children or grandchildren.

If the property is being passed to the next generation, this tax-free allowance can be increased to £500,000. If a spouse died first and their whole estate passed to the second spouse, the thresholds are doubled on the second death to a potential maximum of £1 million. Anything outside these thresholds would be liable to Inheritance Tax at 40%.

How is property valued?

If there isn’t any Inheritance Tax to pay, and you’re not near the limit, you can use a website such as Rightmove or Zoopla to obtain an estimate based on recent sales of similar properties in the area. Alternatively, an estate agent will be able to provide you with a free valuation.

If nobody is living in the property, it’s recommended to use the highest justifiable valuation. This is because if the property is sold for more than the value you submit for probate, you might have to pay Capital Gains Tax on the difference in value.

If you have Inheritance Tax to pay, or the estate is close to the limit, it’s recommended to use a chartered surveyor to produce a valuation for this purpose. In this case, it’s important to note that HMRC may still want to send their own surveyor (although this is unlikely if you used a RICS accredited surveyor).

How are personal belongings valued?

The value of items is based on what they would get on the open market, in their current condition.

If there isn’t any Inheritance Tax to pay, and you’re not near the limit, you can group all the items together and make a ‘guesstimate’ yourself. For cars, using a service such as We Buy Any Car to get an online valuation is recommended. If there are any individual items worth more than £1,500, it can be a good idea to have them professionally valued.

If you have Inheritance Tax to pay, or the estate is close to the limit, it’s best practice to get a local auctioneer to value the personal belongings and house contents, even if you’re not planning on keeping them.

How are shares valued?

For stocks and shares listed on the stock exchange, you should calculate the value using the highest and lowest prices on the date of death – here is a free guide to help you do this. If the person died at the weekend, you should use the price from the Friday before or the Monday after – whichever is lower.

For shares in private companies, you’ll need to ask an accountant to calculate the value of the shares. It’s important to note that there are exemptions that can be used to avoid paying Inheritance Tax on this type of shares.

Do I need to use a lawyer?

If there is no Will in place and the estate is worth more than £250,000, and doesn’t pass entirely to a spouse, you will need to hire a lawyer to handle the probate process (you can check who inherits the estate when there is no Will using this free government tool).

However, if this isn’t the case, you can either do probate yourself or enlist the help of a probate support service. Designed to help you navigate the challenges and pitfalls of going through the probate process in Scotland, using a dedicated probate support service provides very similar value to a lawyer in terms of knowledge and experience, but for a fraction of the cost. It will also allow you to avoid the many pitfalls of a DIY application and ensure a smooth journey.

Probate support service

To conclude, dealing with a death in the family can be a highly sensitive and traumatic experience, especially if you are also appointed as an executor of the estate. Seeking help from a probate expert can help you get your Grant of Confirmation approved the first time and support you in navigating all the other aspects of closing down someone’s financial and legal affairs.

By dealing with the estate without a solicitor and opting for the help of a probate support service, you can help alleviate some of the pressure and ensure the estate is handled correctly, saving you a lot of time and stress, not to mention a small fortune in legal fees.