People often assume that their spouse/civil partner or children will automatically inherit their estate if they die which is not always the case and there is no reason for them to make a Will. If, however, you die without leaving a Will in Scotland (known as dying intestate) there are various rights available to your spouse/civil partner and children on your estate (known as Prior Rights and Legal Rights) which are designed to protect spouses/civil partners and children from being disinherited.
Prior Rights are only available to your spouse/civil partner and these are the first call on your estate. Your surviving spouse is entitled to a property up to the value of £473,000, furniture and personal effects with a value up to £29,000 and then a cash right of £50,000 if there are children and £89,000 where there are no children.
For a number of clients, this means that their spouse/civil partner is entitled to their whole estate which means there is no provision for children. If however, this does not exhaust the entire estate then there is a further entitlement known as Legal Rights. Under Legal Rights, the spouse is entitled to a further one-third of the net moveable estate if there are children and a half if there are no children. Children have a similar claim.
Legal Rights are also available to spouse/civil partners even when there is a Will however if cannot be claimed alongside any entitlement under the Will. The option is to forego the provision in the Will and claim legal rights or take your entitlement under the Will – you cannot have both. Claims can be made for 20 years following death. There is no claim for an unmarried partner however they could make a Co-habitation claim under Section 29 of the Family Law Scotland Act depending on circumstances.
The remaining estate is then passed to the surviving children if any and in the event that there are no children in terms of the Succession Scotland Act.
The process for dealing with an intestate estate is more complicated as you need to petition the Court to have an Executor-dative appointed to deal with the estate and sometimes also the need to apply for a Bond of Caution. This is an insurance policy which safeguards the estate and requires to be put in place for all intestate estates over £36,000 where the spouse/civil partner does not take the entire estate by virtue of their prior rights.
You can take steps to mitigate the extent of a legal rights claim and by obtaining proper estate planning including putting in place a Will. This will ensure your estate passes to the people you wish to benefit and not determined by the current Law. Please note this area of succession law is under review and there may be changes in future.
Please contact one of our Private Client Team who will be happy to assist you with the preparation of Wills and carry out the relevant estate planning which you require.
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The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.