Susanne Batchelor is a Partner and Iona Clark is a Trainee Solicitor, both at Brodies LLP.
One of the most important recent developments for executors, trustees and practitioners, the Trusts and Succession (Scotland) Act 2024 received Royal Assent on 30 January 2024. The legislation is the most significant review of the law in relation to trusts and succession in over 100 years. None of the substantive provisions of the 2024 Act are, as yet, in force. Most provisions will be brought into force through a series of Scottish Statutory Instruments in due course.
The 2024 Act is split into two parts – the first part updates trust law and how trusts are administered and managed, and the second deals with succession. This article discusses the key changes made to the law of succession. With the exception of the Succession (Scotland) Act 2016, which introduced some important but limited reform, there has been no major changes to succession since the Succession (Scotland) Act 1964.
Intestate succession to free estate
The 2024 Act amends key rules on intestate succession, where a person dies with a spouse or civil partner but no children. In those circumstances, the surviving spouse or civil partner will now be entitled to the whole of the deceased's estate. These provisions are due to come into force at the end of April 2024.
Until this change is brought into force, the surviving spouse or civil partner ranks behind parents and siblings under the existing intestacy law in Scotland. This is in relation to the free estate only, which is the part of the estate that remains after prior rights and legal rights are satisfied. Prior rights provide a surviving civil partner or spouse with rights to a specific value of the house, household contents and cash. Legal rights give a surviving spouse or civil partner and children the right to a fixed share of the moveable estate. The remainder of the estate is the free estate.
The position here is not widely known amongst families – it is a common misconception that when a person dies without a valid will, the surviving spouse or civil partner will inherit the whole estate.
This is a fundamental change to intestacy rules. Its effect can be seen, in particular, in relation to couples who have separated but who are still married or in a civil partnership. Even where a couple have separated, if one of them does not have a will in place and they pass away leaving no children, the surviving spouse or civil partner will inherit the whole of the estate on death. While it is important for anyone to have a will in place, it is even more important for a will to be prepared where a couple have separated but may still be married or in a civil partnership, to ensure their assets are going to those who they now wish to benefit.
Special destinations
Of particular importance is a change introduced in relation to special destinations (also known as survivorship destinations). In Scotland, a special destination is a clause often found in title deeds for a property which is owned in joint names (for example, a married couple or civil partners). Where the title deeds include a survivorship destination, the deceased's share will automatically transfer to the survivor of the owners, regardless of the terms of the deceased's will.
The 2016 Act sought to deal with the scenario where a marriage or civil partnership had come to an end, by divorce or dissolution, and the title deeds of the deceased automatically left their share of a property in favour of their ex-spouse or civil partner. Previously in Scotland, the share would still automatically pass to the survivor. The 2016 Act served to disinherit the surviving spouse or civil partner from benefitting from the survivorship destination, where the relationship had come to an end by the time of the death.
The new amendment introduced by the 2024 Act makes clear that the presumption that the ex-spouse or civil partner has predeceased (and will, therefore, be disinherited) will only apply in relation to the deceased's interest in the property. It will not apply to other interests which may be held by other parties. Without this amendment, the effect of the 2016 Act would have been for the whole of the property (including the surviving ex-spouse or civil partner's share, for example) to be taken to the beneficiaries of the deceased's estate. The amendment provides clarity to the law and ensures it is only the deceased's share of the property that will be taken into account here.
Killers prevented from acting as executor
Killers will now be prevented from acting as an executor on their victim's estate. Under the 2024 Act, the courts must refuse to appoint a person as executor who is being prosecuted for (or who has been convicted of) murder or culpable homicide, where the deceased has died intestate. The courts are also given powers to remove someone convicted of or prosecuted for murder or culpable homicide from a previously appointed role of executor. While a person was already unable to benefit from the estate under the 2016 Act where they have received such a conviction, there was previously a loophole in the law which meant that the person could remain in charge of the estate as executor. The 2024 Act now closes this loophole.
Cohabitants' claims on intestacy
Lastly, the 2024 Act extends the time limit for cohabitants to make a financial claim on intestacy on a share of the deceased's estate from six months to twelve months. This is a welcome change, as the six-month time limit was often an incredibly challenging deadline for a cohabiting partner to meet, during an already difficult time.
The change introduced to the intestacy rules outlined above, where the deceased passes away leaving a spouse or civil partner but no children, will also be important for cohabitants' claims. When making a claim on death, the maximum amount a cohabitant could be awarded is what they would have been entitled to had they been married to or in a civil partnership with the deceased. Where a person dies intestate leaving no children, the change introduced by the 2024 Act will see the survivor inheriting everything – meaning that a surviving cohabitant could also, in theory, inherit everything too. However, the amount actually awarded will of course be down to the discretion of the courts.
Changes to the law of intestate succession and special destinations will come into force at the end of April 2024. We await confirmation from the Scottish Government as to when the remaining provisions of the 2024 Act will be coming into force.
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