The law of Scotland provides that your spouse and children will automatically benefit from your estate, regardless of whether or not you left a Will. This is due to the system of Legal Rights, which is unique to Scotland in the UK.
Legal Rights can also override how you, as a Testator, would like to dispose of certain assets in your Will. It is therefore important to understand the doctrine of Legal Rights and how it could apply to you.
Legal Rights is a form of forced heirship. The principle behind the doctrine is that although a person has the right to leave their estate to whom they wish, they have a duty to provide for their spouse and surviving children.
Legal Rights are automatic. The only reasons for them not applying are:
Legal Rights are rights to the payment of the calculated value of the deceased’s net worldwide moveable estate, rather than a claim on any specific asset. However, with the consent of all the beneficiaries, assets can be given to the claimant in satisfaction of Legal Rights.
All worldwide net moveable objects in an estate, such as money, shares, cars, furniture, and jewellery can be claimed under Legal Rights. Heritable estate, which includes land and buildings is excluded from Legal Rights claims.
An exception to land not being part of the net moveable estate is if it is held in partnership. The deceased’s share of the partnership can be claimed under Legal Rights. One of the most common situations in which this occurs is when agricultural land is held in partnership. To avoid having to break up a farm to satisfy Legal Rights claims, it is best practice to draw up a Partnership Agreement.
If the deceased has surviving children, a surviving spouse or civil partner can claim one-third of the deceased's worldwide net moveable estate. If there are no surviving children, a spouse or civil partner will be entitled to one-half of it
The children are jointly entitled to one-third of the deceased's worldwide net moveable estate if the deceased’s spouse or civil partner is still living, or to one-half of it if the deceased left no spouse or civil partner. Each child has an equal claim. Adopted children are treated the same as biological children for the purposes of Legal Rights.
As soon as the Testator dies, the spouse and/or children can claim Legal Rights. Interest accrues from the date of death to when the payment is made. Should the claimant die before payment is made, their Executor takes ownership of the Legal Rights. For example, if a husband and wife are in a car accident and the husband dies instantly, his wife can claim Legal Rights immediately. However, if she dies some weeks later in hospital, those rights pass on to her Executor.
If their parent dies without claiming their Legal Rights, a grandchild of the deceased can ‘step into the shoes’ of their mother or father and inherit their claim.
If one of the claimants has received advances from the deceased whilst they lived (for example, money for a deposit on a home), then this does not negate their ability to claim under Legal Rights. However, it is important that the distribution of payments under Legal Rights is fair; therefore, the amount they receive may be reduced.
The age of legal capacity in Scotland is 16 years. Therefore, if the deceased died leaving a spouse and young children, the Executor needs to consider that if they pay the entire estate to the surviving husband or wife, the children may have a claim when they come of age. To protect their best interests, the Executor should ask the surviving spouse to grant them an indemnity against any future claims.
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