Wills are not just for the rich & famous

In a week where the US newspapers have been filled with the sad story of a feud between the late Robin Williams’ wife and his children in relation to his estate and speculation about what might happen to Whitney Houston’s estate should her daughter not reach age 30 and inherit, it would seem that even the rich and famous can often get in wrong when it comes to estate planning.

While dealing with the estate of a celebrity no doubt involves higher sums of money the process is the same as that for everyone else and the benefit of a carefully drafted Will can mean the difference between a straightforward process and an on-going saga for those left behind.

Two recent cases that have come across my desk remind me once again that estate planning is not only for the wealthy and that everyone should have a Will.

The two cases in question are of individuals dying suddenly without having put a Will in place. In both cases there is no surviving spouse meaning their estates will pass, under the laws of intestacy, to their children or remoter family members.

Dying without a Will is all too common and unfortunately it is not commonly known that this complicates the winding up of an estate. The family members left behind to deal with things rarely appreciate that the lack of a Will means additional cost and delays.

When an individual dies without a Will in Scotland, the family have to petition the Sheriff Court to have an executor appointed. Where there is no surviving spouse or civil partner a further hurdle arises as the executor has to obtain insurance cover known as a Bond of Caution effectively indemnifying any creditor or beneficiary of an estate against loss caused by maladministration, negligence or fraud on the part of the executor.

This process requires the completion of lengthy application forms together with payment of a premium and it is not always guaranteed that the insurers will provide cover.  In the two cases I am dealing with the individuals in question died relatively young and, as is all too common, had substantial debt in the form of a mortgage and other borrowings.  The insurance company is considering refusing to grant Bonds of Caution as they don’t wish to take on the risk of the debts not being fully covered by the assets in their estate.

Without a Bond of Caution the family will not be granted Confirmation to the deceased’s estate and, as such, any assets, including the property, cannot be realised to settle the outstanding debts.

This leaves the families in the unenviable position of perhaps having to obtain personal borrowing to reduce the deceased’s debts before they can obtain Confirmation to the estate.

While we are considering the various options for these two live cases it has brought to mind once more that this could all be avoided if even a simple Will was in place.

While the requirement for a Bond of Caution has been reviewed by the Scottish Law Commission the position will remain the same for some time to come and every individual should bear in mind the additional hurdles their family will have to overcome if they do not make a Will.

[info]

For More Information Contact:
Julie McMahon
Mobile: 07841 920094
Direct Dial: 0141 530 2021
Email: jmcmahon@gilsongray.co.uk

[/info]

The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.