Private client and family lawyers beware

Private client and family lawyers beware – important changes in the Trusts and Succession (Scotland) Act 2024

The succession provisions in the Trusts and Succession (Scotland) Act 2024 feel rather tacked-on, since the reason for the legislation was to update trust law. Nonetheless, the small number of changes to succession are significant and come into force on 30th April 2024. The new trusts provisions, on the other hand, will not take effect until a date to be announced.

Order of intestate succession: a new trap for separated couples

The most notable change is to the order of intestate succession, where a person dies leaving a surviving spouse or civil partner but no children. Section 77 of the 2024 Act amends the hierarchy of succession in section 2 of the Succession (Scotland) Act 1964, inserting paragraph ‘(ab)’ below:

• Subject to the following provisions of this Part of this Act–
• where an intestate is survived by children, they shall have the right to the whole of the intestate estate.

(ab) where an intestate is survived by a husband, wife or civil partner, but is not survived by any prior relative, the surviving spouse or civil partner shall have right to the whole of the intestate estate; …

This is much more generous to spouses and civil partners than the current situation where their rights are limited to prior rights and the relict’s right, and a claim on the free estate only where there are no close blood relatives who rank above them in section 2.

In particular, the dwelling house right (up to £473,000 of residential property) and plenishings rights (£29,000) are currently subject to the requirement that the surviving spouse or civil partner was living in the dwelling house as their “ordinary residence”. Removing this restriction means that large estates, which previously might have gone partially to blood relatives such as parents or siblings, nieces or nephews, will now pass entirely to the surviving spouse or civil partner.

This change may be welcome where the deceased and the survivor were still in a relationship at the time of death. However, it also means that where the couple had separated prior to death, but not formally divorced or dissolved the relationship, the survivor will take everything. Some representations were made to the Scottish Parliament during the consultation stages that this would often be the last thing that a separated person might wish to happen. It was suggested that there should be a requirement that couples were cohabiting at the time of death, but this was rejected.

This change makes it more important than ever for separated individuals to execute a will as a matter of urgency.

There is no change to intestate succession where there are also surviving children, so the prior rights limits and ordinary residence requirement would still apply in those circumstances.

Changes for cohabitants

One side effect of the change to section 2 is that cohabitants could be awarded a larger sum under section 29 of the Family Law (Scotland) Act 2006. Section 29(4) limits their award to an amount not exceeding “the amount to which the survivor would have been entitled had the survivor been the spouse or civil partner”. Of course, this is a discretionary provision and a judge may choose not to be so generous as to award the entire estate to a cohabitant.

The other welcome change is that section 78 of the 2024 Act extends the time limit for cohabitants making a claim from six months to 12 months.

Killers disqualified from being executor of their victim’s estate

A rarer situation is tackled in section 80 of the 2024 Act, which adds section 6A to the Confirmation of Executors (Scotland) Act 1858. This instructs sheriffs to refuse the confirmation of an executor where that person is being prosecuted, or has been convicted, for the murder or culpable homicide of the deceased. Professor Roderick Paisley pushed for this sensible change after a high-profile case.

Special destinations

A further minor change is contained in section 76 of the 2024 Act, which makes an amendment to section 2 of the Succession (Scotland) Act 2016. The change is intended to clarify the law, thought to be incorrectly drafted, and ensure that survivorship provisions will be successfully evacuated when the marriage or civil partnership has ended, but only to the extent of the deceased’s interest in the property.

Further succession reform

The new provisions are important, but much more could be done to implement the work of the Scottish Law Commission (SLC) and to thoroughly modernise succession law. Work is ongoing in the background, in particular an SLC project on cohabitation and a survey of public attitudes to succession. However, there will be no time for significant reform of succession law within the current parliamentary term. The 1964 Act will be 60 this year. Let us hope it does not have many more milestone anniversaries.

Written by Yvonne Evans, Dundee University.