Julie McMahon: Help loved ones by making a will

The late Robin Williams. Picture: Getty
The late Robin Williams. Picture: Getty
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With media reports of a sad 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, it would seem that even the rich and famous can often get it 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 for everyone – regardless of whether you can see the Hollywood Hills or Arthur’s Seat.

In short, it all reflects how a carefully drafted will can mean the 
difference between a straightforward process and an ongoing saga for those left behind.

As a tax and succession planning lawyer, I see constant examples of how estate planning is not only for the wealthy and that everyone should have a will.

Two current cases involve 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 has 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 these two cases, 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.

So while death is never the happiest of subjects, everyone should bear in mind the additional hurdles their family will have to overcome if they do not make a will.

Julie McMahon is senior associate at Gilson Gray