Last year’s Succession (Scotland) Act brought in some sweeping changes. It’s important that you know what these are and take the necessary action to protect your position. What happens to your estate after you die is dealt with by the Law of Succession. In the first of a two stage process of review of the Law of Succession, we have, at long last, seen changes made with the introduction of the Succession (Scotland) Act 2016, the first major change in the law in this area since the previous Act of the same name was passed in 1964. The 1964 Act saw major changes in the Law of Succession and this new Act is the first stage in the revamp of the old legislation to bring it up to date to cater for current and, it is to be hoped, future family circumstances. The changes in this part of the legislation are wide ranging and, on the whole, uncontroversial. The changes proposed in the second stage of this review process are much more contentious and we will deal with these once that legislation has been enacted. You can read the full terms of the Act by clicking here.

The Law of Succession in Scotland has changed. In the first major overhaul in over 60 years, last year's Act brought in some sweeping changes.

The Act came into full force on 1st November 2016 and the following changes to succession law are now in place:

The effect of divorce, dissolution or annulment

There are two aspects to this part of the legislation. The first is where the testator (the person who makes the Will) names a spouse or civil partner as a beneficiary and/or executor in the Will and is subsequently divorced or the civil partnership is terminated. In these circumstances the spouse or civil partner who has been named as a beneficiary and/or executor will be treated as having died before the testator, except where that person has been appointed guardian by the Will. There is, however, provision that the spouse or civil partner may still benefit from the Will or be appointed executor if the Will expressly states that this should occur. The second aspect of this section is where there is a special destination (sometimes called a survivorship destination) in a title to a property which is held in the joint names of the parties and which provides that the spouse or civil partner would automatically inherit the whole interest in the property on the death of the testator. In the case of divorce or termination of the civil partnership, the spouse or civil partner will, again, be treated as having died before the testator and, as such, would no longer have any automatic right to inherit the testator’s interest in the property.

Power to rectify a Will

There is now provision for an application to be made to the Scottish Courts to rectify a Will, not drafted by the testator, where the Will does not properly reflect the testator’s intentions. For the Will to be rectified, the court has to be satisfied that it does not accurately express what was instructed.

Descendants to inherit

If a bequest is made to a direct descendant of the testator (i.e. a child, grandchild, great-grandchild etc.) then if that person were to die before the testator, that descendant’s share in the estate would be automatically divided between or amongst his or her direct descendants. However, the testator may include a provision in the Will expressly prohibiting this.

Common Calamity presumption removed

The 1964 Act provided that in a situation where spouses or civil partners both die at the same time and the exact time of death of each could not be established, then it would be presumed that the younger died last and the succession and the distribution of the estate would follow on that premise. This is no longer the case and neither will now be presumed to have pre-deceased the other.

Bond of Caution no longer required in Small Estates

When an intestate estate (an estate where there is no Will) is wound up, an insurance policy called a Bond of Caution has to be taken out to protect beneficiaries against any maladministration by the executor. This need to obtain a Bond of Caution has now been removed for estates where the value of the estate does not exceed the Small Estates level – currently standing at £36,000.

Additional protection for trustees and executors

In certain circumstances Trustees and Executors will be protected where they have incorrectly distributed the estate where they have done that in good faith, have made reasonable enquiries beforehand or have been ordered to proceed with the distribution by the court. As mentioned earlier, this Act is part of a two stage process to modernise the Law of Succession in Scotland. The second tranche of legislation on which the Government consulted towards the end of 2015 will be enacted in due course where it will deal with perhaps much more controversial issues such as:

  • how an estate should be divided when the deceased dies without making a Will
  • the possible extension of the Legal Rights enjoyed by children on the death of a parent who dies without making a Will
  • whose Will contains inequitable provision for the children. The Scottish Government will determine in their legislation what they regard as inequitable.

If you have any questions about how these changes might affect you or if you would like to discuss making your Will or making changes to any Will you currently have, please call us on 0141 227 2207 or use the contact link below.

 

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