Your ‘right’ to inherit when your partner has died: time for reform?
27th June 2019
What you need to know
The Scottish Government recently consulted on the Scots law of intestacy. These are the rules which regulate the division of a deceased’s estate when they die without leaving a valid will. One of the drivers behind the Consultation is that it is argued that the law of intestacy does not reflect the Modern Scottish Family. The lack of an automatic right of a surviving cohabitant to inherit from their partner’s estate is recognised as a source of potential unfairness. The Government are considering ways to reform this.
Who is a cohabitant?
Under the Family Law (Scotland) Act 2006, cohabitants are those who reside together as if married or in a civil partnership. The Court will take into account the length and nature of any relationship as well as the nature of any financial arrangements in place.
What is the current position of a cohabitant on the death of a partner?
Where a person’s cohabitee dies without leaving a will then the surviving cohabitant may apply to the Court within 6 months of death, under the 2006 Act, for financial provision to be made for them out of the net intestate estate to them. This is a discretionary award and the Court is required to consider:
• the size of the estate;
• any benefit the survivor receives as a result of the death not from the estate;
• the nature and extent of any other rights or claims on the intestate estate; and
• any other matter considered appropriate by the court.
The award can include a capital sum or transfer of property. Because the award is out of the net intestate estate any IHT, prior rights and legal rights claims of any surviving spouse are paid out first. This may leave little, if anything, for a cohabitant.
Why should this change?
The current requirement of a court application is a potentially expensive, stressful process and because it usually pits cohabitant against a deceased’s other family members in Court is not exactly conducive to healthy, ongoing family relationships.
It may also be argued that the current position is simply not reflective of the Modern Scottish Family: that it could be expected that a cohabitant in a stable relationship would have wished for his or her partner to have some financial provision or security on death.
Having said that, cohabitants are not spouses. To provide automatic rights to inherit similar to spouses may impose obligations on those who may well have arranged their family lives to avoid such responsibilities to each other.
How might this change?
As part of the wider consultation, the Scottish Government is looking at different models of succession on intestacy from other jurisdictions to consider how the law might be amended. The Government has already committed to increasing the time period to make a claim from 6 to 12 months.
There has been a wide range of responses to the Consultation. The below is a summary of possible reforms emerging from some of the responses:
• A requirement of a fixed minimum period of cohabitation;
• A restricted role played by the Court (if any at all) in determining cohabitation only;
• A requirement that the deceased was not married at the time of death;
• An entitlement to a fixed sum of money (which may be reduced if there are children of the deceased);
• A complete alignment of a cohabitee’s rights with those of a spouse on intestacy;
• A division of the estate between any spouse and cohabitee calculated by the Court;
• An automatic grant of liferent (rent free occupancy for life) of the family home.
The Consultation is a welcome move by the Scottish Government. It will be interesting to see how, if at all, the law is reformed. However, whether the law is reformed or not, the best way to make sure that our loved ones inherit from our estates on our death will remain by making a valid, professionally drafted will.
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at June 2019. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.