24 Dec 2014

Analysis: Succession Law

Analysis: Succession Law

 

Graham Scott, Partner, analyses the proposed changes to succession law.

New Succession Bill

The Scottish Government has announced its legislative programme for the coming year and it is expected this will include a new Succession Bill. It is understood that many of the recommendations made in the Scottish Law Commission Report published in 2009 will be implemented in an effort to make the law “fairer, clearer and more consistent”. Much of the current law dates back to the Succession (Scotland) Act 1964, which itself implemented recommendations first made in 1950. It is fair to say that the law of succession is due for an overhaul.

Report Recommendations

The Scottish Law Commission Report made a large number of recommendations, including a proposal to abolish the distinction between moveable property (cash, investments etc) and heritable property (land and buildings) for the purposes of legal rights. It appears that the Scottish Government plans to consult further on this proposal, but it is clear that the intention is for the distinction to be abolished. If that happens, it will have a very significant effect on the matters individuals will need to take into account when considering their Wills. At the moment, spouses and children can choose to claim legal rights in place of any provision made for them in a Will.  However, legal rights amount to a proportion of the deceased person’s moveable estate only. Given that for most people their most significant asset is a house, it is likely that legal rights will form a much larger part of an individual’s estate in future.

In the meantime, the Succession Bill is likely to include measures which will:

  • Remove the requirement for executors to obtain a bond of caution. Caution is an insurance policy which Executors require to take out in intestacy;
  • Close a number of jurisdictional gaps so that where Scots law is the applicable law, the Scottish courts will have jurisdiction;
  • Reform how Wills may be rectified by the courts;
  • Reform how survivorship should operate; and
  • Clarify the effect of divorce, dissolution or annulment or the birth of a child on a Will. At the moment, divorce, dissolution or annulment normally has no effect on a Will. However, if a child is born after the signing of a Will and no provision is made for that child, he or she is entitled to have the Will reduced.

Conclusions

There is still a long way to go before we know precisely how far the Scottish Government will go in implementing the proposals of the Scottish Law Commission, but there is little doubt that we are likely to see radical changes over the next year or so

A well drafted Will is still the only way to ensure that your estate passes in accordance with your wishes and in a tax efficient way. Any changes in the law, however radical, will not change that.  

Graham Scott, Partner


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