The Scottish Government has recently published its response to the Consultation on the Law of Succession. The Scottish Law Commission previously reviewed the law, and made several recommendations for reform.
In particular, three areas of law were considered for substantive reform, namely:
- The law of intestacy (i.e. where a person dies without a Will);
- Disinheritance of spouses, civil partners and children; and
- Cohabitee claims.
When a person dies without a Will, their estate is primarily regulated by the Succession (Scotland) Act 1964.
The estate is distributed in the following order (after payment of any debts):-
- Prior Rights;
- Legal Rights;
- Free Estate
Prior Rights are statutory entitlements of the surviving spouse or civil partner including:
- the house in which the surviving spouse or civil partner lived up to the value of £473,000;
- furniture and furnishings up to a maximum value of £29,000; and
- payment of a cash sum of £50,000 if the deceased also had children or £89,000 if the deceased did not have children.
If the estate is not exhausted by Prior Rights, then Legal Rights can be claimed from the estate. The Legal Right of a surviving spouse or civil partner is one-half of the moveable estate, or one-third if there is also surviving children. Similarly, children are entitled to claim one-half of the moveable estate, or one-third if there is a surviving spouse or civil partner.
The remaining estate is thereafter distributed in accordance with section 2 of the Succession (Scotland) Act 1964.
The current intestacy rules have been criticised due to their complexity.
It was proposed that the current rules could be replaced with a much simpler scheme for distribution. If a person was survived by a spouse or civil partner and no children, then the spouse or civil partner could inherit the full estate. If a person was survived by children only, then the children could inherit the full estate. These proposals were uncontroversial, and the Scottish Government has proposed to implement them in future legislation. With regard to how an estate should be divided if there are both a spouse or civil partner and children, there was a wide range of views as to how this division should occur. Given that no consensus could be reached as to how this area of law should be reformed, the Scottish Government has proposed to consult further and seek to identify a scheme of distribution which would be appropriate.
It is possible to claim Legal Rights from an estate even if there is a Will. This is designed to protect surviving spouses or civil partners and children from being completely disinherited from an estate. One issue is that such a claim can only be made against moveable property (i.e. they cannot claim against property and land) therefore attempts could be made to reduce moveable property to minimise or defeat a potential Legal Rights claim.
It was suggested that these rules could be reformed, for example removing the distinction between moveable and heritable property. This would mean that a claim could be made against a whole estate. There was support for spouses or civil partners to be protected from disinheritance, but there was no consensus as to how this would best be achieved. There was mixed views about whether children should be protected from disinheritance. As such, the Scottish Government is not proposing to proceed with any reforms in relation to this area.
The current law is contained in section 29 of the Family Law (Scotland) Act 2006 and has been subject to much criticism. A cohabitee has 6 months from the date of death to make an application to the court for a share of the estate, but only if the deceased did not have a Will. The Court has discretion as to what should be awarded to the cohabitee who makes a claim.
A two-stage process to establish cohabitee’s rights was considered. The first stage would determine if they were cohabitants, with the second stage considering the “quality” of the relationship. The “quality” of the relationship would determine the percentage of the estate that the surviving cohabitee would receive. There was a wide range of views expressed about the proposals therefore the Scottish Government shall consider matters further. They noted, however, that there was support for extending the time limit for making a cohabitee claim from 6 months to 12 months. There is no intention of extending cohabitee claims to estates where there is a Will.
It is clear that there was a lack of consensus for many of the proposed reforms to the current Law of Succession. Whilst society has changed since the introduction of the Succession (Scotland) Act 1964 and there is a need to update the law to reflect this, the Scottish Government is likely to be unwilling to proceed with reform until they have identified proposals which are supported. It shall be interesting to note the further consultations which shall take place. This is certainly something we will be keeping an eye on!
Blog by Amy Wardrop, Solicitor