Changes to Scots law make a will more vital
Brexit should not have too much of an impact on laws governing succession, writes Hannah Starritt
On 23 June 2016, the United Kingdom voted to leave the European Union. The aftermath has been characterised by uncertainty, leaving many – young and old – asking questions about their future.
Many of you have, or know someone with, a connection to Europe, either by marriage or owning a property in an EU member state. The question of whether the Leave vote will have any effect on your succession will undoubtedly be asked, but this should not overshadow the significant changes being made internally to Scottish succession law.
Scots succession law has long been in need of modernisation – the last significant change happened in 1964. The changes under the Succession (Scotland) Act 2016 are too great to do justice to here, but one which deserves recognition is the effect of divorce on a will, which applies from 1 November 2016.
A will or codicil benefitting the spouse/civil partner of the testator remains valid following divorce, potentially leading to undesired outcomes. Under the new Act, any inclusion of a spouse/civil partner will automatically cease to apply on divorce, unless the will states otherwise. This includes appointing your spouse as an executor as well as leaving them property. This rule will extend to property owned jointly by a married couple or civil partners, such as the family home. If a couple buy the property in joint names, on divorce, it no longer passes automatically to the survivor on the first death.
The rationale is that when a couple divorce, they are unlikely to want to leave anything to each other, and if they do not alter their wills, the ex could end up benefiting unintentionally. However, that is not always the case. For example, a couple who divorce and have young children may well wish to appoint each other to act as their executors so that they can look after the deceased’s property for the children.
The Scottish Government is also looking at other, more controversial proposals, including a new scheme for intestacy, protection from disinheritance under a will and extended rights for cohabit- ants. Possibly the most significant proposals are in relation to disinheritance under a will.
Currently, the spouse, civil partner and children of the deceased can claim a sum of money from the estate regardless of what is in the will. The claim is based on the value of the “moveable estate”, which basically means anything other than land and property.
The surviving spouse can claim one-third of the moveable estate and the children share one third equally between them. If there is no surviving spouse or no children this increases to a halfshare.
The Scottish Government is considering removing the distinction between moveable property and other property which would allow a surviving spouse, civil partner and child to claim against all property. In many cases, this would significantly restrict the freedom to make a will of your choosing.
On a European level, on 17 August, 2015 the European Succession Regulation became binding on EU member states except for UK, Ireland and Denmark who opted out of the regulation. Despite this, Scottish estates with a connection to the EU will still feel its effects.
Under the regulation, all EU countries bound by it adopt the same rule for deciding which law applies to the division of a person’s property on death. The rule is that the law of the country in which you are resident at your death applies. If you are living abroad, you can override this and chose the law of your nationality instead.
For example, a Scot living in France with no will stating otherwise would have French succession law apply to the division of his/her property on death. To avoid this, they should adopt Scots law in their will. That will be recognised.
The impact of Brexit on Scots succession law is relatively small, although, ironically, once the UK leaves the EU, it actually makes the position clearer as far as the European Succession Regulation is concerned.