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Scots Succession Law: Changing to Reflect the Modern Day Family

Scots Succession Law: Changing to Reflect the Modern Day Family

The Scottish Government has launched a further consultation on the Law of Succession – picking up on the substantive issues which were set to the side when the more technical aspects of reform were dealt with in 2016 – with responses having to be submitted by the 10th May.

The Scottish Government has launched a further consultation on the Law of Succession – picking up on the substantive issues which were set to the side when the more technical aspects of reform were dealt with in 2016 – with responses having to be submitted by the 10th May.
So what are these substantive issues?  Intestate succession is the main issue under review. Scotland’s system of forced heirship, legal rights, was another topic previously included in the wider consultation, however, the Government has now confirmed that no changes to legal rights will be made.
The law in connection with intestate succession has not changed since 1964 – generally, due to a lack of consensus as to how to proceed, but with the continual changes to the landscape of a modern family, it is now time for changes to be made here to meet the needs of a changing society.  
This article will be written in two parts: Part 1 will cover intestate succession where there is a surviving spouse and/or children and Part 2 will cover intestate succession for cohabitants.
Intestate succession provides the rules on how someone’s estate should be distributed when they die without leaving a Will.  As this is an area that affects everyone there must be some consensus on the reform and what outcome will match the public’s expectations in a modern society.  This involves a very careful balancing act of aligning different views and trying to reach a position whereby a beneficiary is seen as neither winning or losing but instead reaching a fair outcome (so far as possible).
What is the current law?
Where the deceased is survived by a spouse or civil partner and/or children the following provisions apply in the order set out below:
Prior Rights – A surviving spouse or civil partner will have the right to the following once all debts have been paid: (a) the home that they are ordinarily living in (up to a value of £473,000) (or if the deceased had owned two or more houses the survivor has six months from the date of death in which to elect a choice of house); (b) the furniture (up to a value of £29,000); and (c) a lump sum (£50,000 if the deceased has surviving children or £89,000 if there are no surviving children).
Legal Rights – if there are still assets in the estate after prior rights have been met then legal rights may be claimed.  Legal rights can only be claimed on the deceased’s moveable property i.e. generally everything with the exception of houses or land.  If the deceased is survived by both a spouse or civil partner and children each would be entitled to make a claim for one third of the moveable estate whereas if the deceased is only survived by either a spouse or civil partner or children then the claim would be for one half of the moveable estate.
Remainder of Estate - once both of prior and legal rights have been dealt with the remainder of the estate passes in accordance with a list of priority set out in the Succession (Scotland) Act 1964.  It should be noted that children take priority under this list, followed by siblings/parents, with both of these categories taking precedence over a surviving spouse or civil partner.
Proposed Changes
The Scottish Law Commission criticised the current scheme due to its complexity and the fact that the type of asset (i.e. moveable or heritable) had a large impact on the outcome.  It has been confirmed that the Commission’s proposals from the previous round of consultation whereby if a deceased is survived by just their spouse/civil partner (no children) then the whole estate will then pass to the surviving spouse/civil partner – shall be made law (at a date to be confirmed).  However, the contention arises when the deceased is survived by both a spouse/civil partner and children - and there were a range of responses as to what should happen in that situation, reflecting the difficulty of finding a consensus to this situation.  
The Government has put forward two different schemes to be considered, one based on the model that operates in Washington State and the other from British Columbia (BC).  
The Washington State law model takes a “community property” approach and is similar to the system that operates for divorcing couples in Scotland in ascertaining whether the property was acquired during the marriage or separately.  The share of the property that each party receives is then determined as to whether it is community property or separate property and whether or not there are dependents, natural or adopted children, or a parent or natural born or adopted siblings of the deceased.   
The British Columbia model is not dissimilar to the one that operates in Scotland at present with one of the main differences being that it takes into account whether the deceased had children from a previous relationship and also provides a wide definition of spouse that includes cohabitants that have been in a “marriage-like” relationship for more than 2 years.  The preferential share that the spouse inherits under this model is dependent upon whether the deceased is survived by a spouse and children or a spouse or children, it also depends upon whether the children are from the same relationship.  
It will be interesting to see which model will come out on top in the consultation and possibly makes its way into Scots Law or at least heavily influences the changes that are to be made. With the Government already committing to a surviving spouse/civil partner inheriting the whole estate where the deceased left no children, any model would need to take that into account.
What can be said it that the only way your succession can be more certain and reflective of your own wishes, is by putting in place a Will.  
To discuss Wills further please contact a member of the Private Capital Team.Scottish Government has launched a further consultation on the Law of Succession – picking up on the substantive issues which were set to the side when the more technical aspects of reform were dealt with in 2016 – with responses having to be submitted by the 10th May.

So what are these substantive issues? Intestate succession is the main issue under review. Scotland’s system of forced heirship, legal rights, was another topic previously included in the wider consultation, however, the Government has now confirmed that no changes to legal rights will be made.

The law in connection with intestate succession has not changed since 1964 – generally, due to a lack of consensus as to how to proceed, but with the continual changes to the landscape of a modern family, it is now time for changes to be made here to meet the needs of a changing society.

This article will be written in two parts: Part 1 will cover intestate succession where there is a surviving spouse and/or children and Part 2 will cover intestate succession for cohabitants.

Intestate succession provides the rules on how someone’s estate should be distributed when they die without leaving a Will.  As this is an area that affects everyone there must be some consensus on the reform and what outcome will match the public’s expectations in a modern society.  This involves a very careful balancing act of aligning different views and trying to reach a position whereby a beneficiary is seen as neither winning or losing but instead reaching a fair outcome (so far as possible).

What is the current law?

Where the deceased is survived by a spouse or civil partner and/or children the following provisions apply in the order set out below:

Prior Rights – A surviving spouse or civil partner will have the right to the following once all debts have been paid: (a) the home that they are ordinarily living in (up to a value of £473,000) (or if the deceased had owned two or more houses the survivor has six months from the date of death in which to elect a choice of house); (b) the furniture (up to a value of £29,000); and (c) a lump sum (£50,000 if the deceased has surviving children or £89,000 if there are no surviving children).

Legal Rights – if there are still assets in the estate after prior rights have been met then legal rights may be claimed.  Legal rights can only be claimed on the deceased’s moveable property i.e. generally everything with the exception of houses or land.  If the deceased is survived by both a spouse or civil partner and children each would be entitled to make a claim for one third of the moveable estate whereas if the deceased is only survived by either a spouse or civil partner or children then the claim would be for one half of the moveable estate.

Remainder of Estate - once both of prior and legal rights have been dealt with the remainder of the estate passes in accordance with a list of priority set out in the Succession (Scotland) Act 1964.  It should be noted that children take priority under this list, followed by siblings/parents, with both of these categories taking precedence over a surviving spouse or civil partner.

Proposed Changes

The Scottish Law Commission criticised the current scheme due to its complexity and the fact that the type of asset (i.e. moveable or heritable) had a large impact on the outcome.  It has been confirmed that the Commission’s proposals from the previous round of consultation whereby if a deceased is survived by just their spouse/civil partner (no children) then the whole estate will then pass to the surviving spouse/civil partner – shall be made law (at a date to be confirmed).  However, the contention arises when the deceased is survived by both a spouse/civil partner and children - and there were a range of responses as to what should happen in that situation, reflecting the difficulty of finding a consensus to this situation.

The Government has put forward two different schemes to be considered, one based on the model that operates in Washington State and the other from British Columbia (BC).  

The Washington State law model takes a “community property” approach and is similar to the system that operates for divorcing couples in Scotland in ascertaining whether the property was acquired during the marriage or separately.  The share of the property that each party receives is then determined as to whether it is community property or separate property and whether or not there are dependents, natural or adopted children, or a parent or natural born or adopted siblings of the deceased. 

The British Columbia model is not dissimilar to the one that operates in Scotland at present with one of the main differences being that it takes into account whether the deceased had children from a previous relationship and also provides a wide definition of spouse that includes cohabitants that have been in a “marriage-like” relationship for more than 2 years.  The preferential share that the spouse inherits under this model is dependent upon whether the deceased is survived by a spouse and children or a spouse or children, it also depends upon whether the children are from the same relationship.  

It will be interesting to see which model will come out on top in the consultation and possibly makes its way into Scots Law or at least heavily influences the changes that are to be made. With the Government already committing to a surviving spouse/civil partner inheriting the whole estate where the deceased left no children, any model would need to take that into account.

What can be said it that the only way your succession can be more certain and reflective of your own wishes, is by putting in place a Will.  

To discuss Wills further please contact a member of the Private Capital Team.

Claire Bruce
Solicitor

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