There are many ways that couples might choose to formalise their relationship, whether that involves cohabitation, getting married or entering a civil partnership. The law in Scotland has recently changed to allow different sex couples to enter into a civil partnership. (See our previous blog, Mixed civil partnership). In light of this development, couples may wish to give some consideration to the differences in the treatment of these approaches in the law of succession.
There is no material difference between a marriage and civil partnership for the purposes of succession. Couples who are married or in a civil partnership have an automatic claim to a proportion of their spouse or partner’s estate. This is regardless of whether they are named in your Will or not. If your spouse or partner has not adequately provided for you in their Will, you will be able to claim part of their estate known as ‘legal rights’. The amount that can be claimed is connected to the so called “moveable” estate which broadly consists of non-heritable assets such as bank balances and share portfolios.
If you are married or in a civil partnership and you die without leaving a Will, the law makes provision for your surviving spouse or partner. Your spouse may be able to claim both prior rights and legal rights. The outcome of this depends on the size of your estate, with a claim for prior and legal rights potentially exhausting your estate.
The Inheritance Tax Nil Rate Band is transferable between married couples and civil partners, providing tax free inheritance for most estates left to spouses or civil partners.
When you live with your partner but you are not married or in a civil partnership, the rules are very different. If your partner passes away without leaving a Will, you do not have an automatic right to a share in their estate. Their estate will be distributed according to the laws of intestacy.
You can apply to the court within six months of the death to claim a share in your partner’s estate, but this is not guaranteed. The best way to ensure that your estate passes to a cohabiting partner, is to use an experienced solicitor to draft a Will tailored to your wishes and circumstances.
If you and your partner are not married or in a civil partnership, you may need to pay inheritance tax on any money or property you inherit from them. To read more, please refer to our previous blog.
Making a Will needs careful thought in order to consider how to protect your family and loved ones. The relatively small amount of time and cost invested now into putting a Will in place will ensure that you can be confident that when you do pass away your family will be well looked after financially, and will not face the additional burden of avoidable court procedures to receive these benefits.
Murray Beith Murray Partner, Peter Shand, is head of our Asset Protection group and is a specialist in succession and estate planning. If this article has raised any questions or you would like to speak to one of our specialist lawyers, then please get in touch using our enquiry form or call on 0131 225 1200.
Murray Beith Murray was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.