Succession (Scotland) Bill
The Scottish Law Commission has reviewed succession law from time to time (reports in 1990 and 2009) but this area of law has remained largely unchanged since the passing of the Succession (Scotland) Act 1964. As a result, it is widely accepted that Scots’ succession law is in need of clarification and modernisation, and that process is now under way in the form of two waves of reform: the Succession (Scotland) Bill dealing broadly with the non-controversial technical amendments to the law in this area put forward by the Scottish Law Commission Reports (intended to bring additional clarity to areas of succession law that remain unclear); and a separate consultation on the Law of Succession looking at more controversial aspects of reform. Looking firstly at the Succession (Scotland) Bill, the main areas covered are:-
Under the current law, if a person revokes or destroys a current Will and a former Will still exists, that former Will can be revived and given effect. This can lead to difficulties and unintended consequences. This will no longer be the case and it is proposed that once revoked by a subsequent Will, a former Will cannot be revived.
The Bill also provides that where a legacy is given to a direct descendant of the testator who dies before the legacy vests in him, the legacy will pass to his children unless it is clear from the Will that the testator intended otherwise. For example if the legacy contains a “whom failing” clause, the legacy will pass according to the legacy clause and not to the children of the first-named beneficiary.
The effect of divorce, dissolution or annulment
It is proposed that, in the event of a testator being divorced or having his or her marriage or civil partnership dissolved or annulled (dissolution applies only to civil partnerships), the former spouse or civil partners will be treated, for the purposes of that person’s Will, as having failed to survive the deceased testator unless the Will specifically provides otherwise.
The former spouse or civil partner will therefore not receive any benefit under the Will and his or her appointment as a trustee, executor or guardian will cease to have effect. If there is a fallback appointment (typically a “whom failing” clause) in favour of a former spouse/civil partner that clause will continue to apply.
The Bill also provides that, where a couple holds title to property in joint names and in the title deeds the property passes to the survivor of them automatically on the first death, that survivorship clause will not have effect. The current wording of this provision is unclear but it will no doubt be clarified in due course.
Where there is uncertainty as to whether one person has survived another, in future each of them will be treated as having failed to survive one another. This provision will be helpful in a situation where, for example, a married couple die together in an accident. Without a provision such as this, the entire estate could pass to the party deemed to have survived and then under the “survivor’s” Will or under the laws of intestacy, meaning that the entire estate would pass only to the family of one party rather than being divided between both.
Another important clarification comes in relation to the rules surrounding forfeiture. Forfeiture is the legal rule which stops a person who is responsible for the unlawful death of another person benefitting from that person’s estate. It is a public policy rule which prevents a wrongdoer from benefiting from the wrongful act. At the moment, there is some doubt under the law as to how a forfeiting beneficiary should be treated. If he or she is treated as being barred from inheriting but he or she has children, it is uncertain whether his or her children are able to step into his or her shoes or whether that whole branch of a family is prevented from inheriting. The Bill provides that the forfeiting beneficiary shall be treated as having failed to survive the deceased person. This is an important clarification and means that the children of a wrongdoer are not punished for the unlawful acts of their parent.
It is not possible to seek rectification of a Will in Scotland, unlike the position in England. Instead, there is an unsatisfactory method by which a court is able to declare that parts of a Will shall be treated as not having been included and other parts shall be interpreted in a particular manner.
The Bill proposes that it should be possible to make an application to either the Sheriff Court or to the Court of Session for rectification of a Will that has been prepared by someone other than the testator, so this will not apply to homemade Wills drawn up by the testator himself. A person may request that the court rectifies any part of a Will and, in deciding whether to do so, the court may consider external evidence such as notes of meeting when instructions were given or even letters that were sent back and forth between parties if they contain relevant information.
Any such application must be made within six months of Confirmation (the Scottish equivalent of Probate) being granted or, in cases where no grant of Confirmation will be sought, within six months of the person’s death.
These provisions could, potentially, be very useful for dealing with clerical errors and badly-worded and competing legacy clauses, but contentious estates are becoming more common and it is important that advice is taken when documents are being prepared as well as when estates are being administered in order to reduce the likelihood of requiring court intervention.
Administration of Estates
The Bill includes a provision by which executors of an estate would be protected from liability arising from an error in the distribution of a deceased person’s estate if the error was caused by the executor not knowing of the existence of a beneficiary, provided that the executor distributed the estate in good faith and made all reasonable enquiries.
This is a useful and practical addition to the administration rules and should prevent situations where it remains uncertain whether an estate can be distributed as it may be difficult to gain information about a deceased person’s family which can lead to long periods of inactivity. It will also reduce the need for executors to seek indemnities from beneficiaries in such circumstances.
In conclusion, the Bill contains some useful and welcome clarifications to the existing law.