In a recent Supreme Court decision the Court upheld the wishes of a mother who decided not to make provision for her daughter in her Will. Upholding a testator's freedom of choice may seem uncontroversial, but it is important to note that this case relates to English law only. In Scotland we have the important concept of "Legal Rights" which prevents children from being disinherited in the way that can take place in England.
What are Legal Rights?
Where someone dies domiciled in Scotland, Legal Rights are designed to protect spouses/civil partners and children from being disinherited. Legal Rights cover the deceased's "net moveable" estate". The right to claim is automatic, the spouse or child is deemed to be a creditor on the estate, and a claim can be made at any time during the 20 years following the deceased's death.
Who can claim and what can be claimed?
Surviving Spouse/Civil Partner
A surviving spouse or civil partner can claim 1/3 of the net moveable estate if there are surviving children or 1/2 of the net moveable estate if there are no surviving children.
Children of the deceased are entitled to 1/3 of the net moveable estate among them if there is a surviving spouse. This is increased to 1/2 if there is no surviving spouse.
It is important to note that if the deceased had a predeceasing child and that child had children of their own, those grandchildren are entitled to claim their parent's share of the estate.
Moveable estate generally comprises any estate that is not classed as heritable property, e.g. bank accounts, shareholdings, cars, personal belongings etc.
Heritable property, e.g. a house, flat or land, does not form part of the moveable estate. The exception to this rule is where land is held by a partnership. The deceased's interest in the partnership is considered moveable estate, and therefore will form part of the Legal Rights fund. This sometimes occurs in farming where agricultural land is held by a partnership. Where a claim is made, land may need to be sold to fulfil a Legal Rights claim. However, it is possible to contract out of this through a correctly drafted Partnership Agreement.
Can you benefit from both Legal Rights and the terms of the Will?
A beneficiary cannot claim their Legal Rights and take any benefit conferred under the Will.
Can a Legal Rights claim be defeated?
There is no way to defeat the right to claim Legal Rights, although it is possible to take steps to affect the value of the claim e.g. since the claim can only be made over moveable estate you can minimise it by investing in heritable property or by placing assets in trust.
Get in touch
If you do not wish your spouse or children to be able to claim a significant part of your estate through Legal Rights then you should get in touch. Each case should be looked at individually so as to tailor it to the particular circumstances of that case, as well as considering the tax implications of any steps taken.
Our offices in Glasgow, Edinburgh, Inverness, Lerwick and Thurso ensure that our experienced and approachable team is on hand to discuss your wishes in a sensitive and efficient manner.