Intestacy Law Has Been Reformed – Do I Still Need a Will?

The Trusts and Succession (Scotland) Act 2024 received Royal Assent on the 30^th January 2024 and this means changes are coming for Succession Law in Scotland

The new act is predominantly making changes to Trust Law but it is making a few amendments to the law of Succession, the most significant change being to the law of intestacy where it is promoting spouses and civil partners up the hierarchy of intestacy inheritance.

How Estates are Handled Without a Will

As the law currently stands when someone passes away intestate, meaning they pass away without a Will, their estate will be dealt with in three parts as follows.

Firstly, if they have a spouse or civil partner that spouse or civil partner will be entitled to their prior rights. Prior rights consist of a house up to the value of £473,000 which the surviving spouse or civil partner is using as their main residence, the furniture in that house up to the value of £29,000 and then a cash entitlement of £89,000, which is reduced to £50,000 where the deceased also had surviving children.

Secondly there are legal rights. Legal rights can be claimed by both a spouse or civil partner and by the children of the deceased. The share depends on who survives the deceased. Where both a spouse or civil partner and children survive the deceased, they are entitled to one third of the moveable estate each, the one third passing to the children being equally shared between them. When only a spouse or civil partner, or children survive the deceased then the share increases to half the moveable estate.

The remainder of the estate is known as the free estate and this passes according to the hierarchy set out in the previous Succession (Scotland) Act 1964. Top of the list are the children of the deceased, or grandchildren, if their parents have passed away. However, if there are no children or grandchildren the free estate passes to parents or siblings of the deceased, regardless of whether there is a spouse or civil partner. A spouse or civil partner will only receive the free estate in the event that there are no surviving children, grandchildren, parents or siblings of the deceased.

This has seemed unusual to many. Prior rights would suggest when the original act was put in place there was an acknowledgement by those who drafted it that the average person would want the majority of their estate to pass to their spouse or civil partner, but rules for the free estate then somewhat pass by the spouse or civil partner in the case that there are surviving children, parents and siblings. If the deceased had a large moveable estate it would result in a large share passing via the free estate, particularly if there are no children and 50% of the remaining possible estate then passes to the parents or siblings. There is also the fairly common situation where a deceased is not close with the parents or siblings and are perhaps estranged. It is particularly odd that the rules mean that the free estate passes backwards in the family to parents for it to then pass forwards again when the parent dies, this being the case if the deceased was actually survived by their parents.

Reforms for Spouses and Civil Partners – Insights from the New Act

The new act has looked to address this problem, based on the recommendation made in the Scottish Law Commission Report in April 2009. Now spouses and civil partners have been moved up the hierarchy of intestacy inheritance and where the deceased has no surviving children or grandchildren the spouse or civil partner will inherit the whole estate. 

This is definitely a positive change and will likely much better reflect the wishes of someone who dies without a Will. However, it still leaves intestacy as not the most desirable option for Succession.

Spouses and civil partners will only receive the full estate where there are no children. Although the deceased may have less issue with estate passing to children as likely everything would pass to them later down the line when their spouse or civil partner dies, it does raise some issues. In the case of a large estate it can result in the children getting the majority of the estate and they could end up “richer” than their parent. This could be a particular issue if the children are young. The other issue may be if the children are estranged from their parent. Although this situation can arise where a couple are separated but not divorced, there will often be a separation agreement preventing them from inheriting. There is nothing similar done between a parent and an estranged child, meaning the child will usually always inherit from the estate.

Ultimately the main issue with the law of intestacy in Scotland is that it is dictating what happens to an estate based on the family make up, the type of assets and the size of the estate. We can assume that the basis for the provisions in the old act and the new one are what the average person would want and what would best suit the average family. However, in 2024 what is the average family?

The only way to ensure that your estate is dealt with how you want, so that the right people inherit and the wrong people don’t, is to do a Will. The Trusts and Succession (Scotland) Act 2024 has made a positive change and perhaps intestacy law may be reformed again, but considering how long this small reform has taken it is unlikely to be any time in the near future. It would also seem unlikely that the law of intestacy will ever be able to provide a desirable outcome to every individual regardless of their circumstances. Therefore to be in control of your own estate make a Will!

Our Estate Planning Team Is Here To Help

If you would like to create a Will, our Estate Planning team at Jones Whyte will be able to assist you, providing clear and straightforward legal advice. Creating a Will ensures that your estate is handled by someone you trust and that your loved ones are provided for. For more information, please call us on 0800 292 2037 or fill out our contact form on our website.