13th April 2017

‘Ilot’ to think about: Legal rights and the ability to disinherit

The majority of people tend to assume that, through their Will, they have complete control over who will inherit their estate.  Accordingly, they are often surprised to find out that they actually live in a country that has laws of “forced heirship”, where a person’s children or spouse claims cannot be fully disinherited.  Scotland is markedly different from England in this regard.

The position in England is in the national news just now due to the decision by the Supreme Court in the case of Illot v The Blue Cross and others.  The decision is the final chapter in a legal saga which started in 2002, when a Mrs Jackson left a Will disinheriting her daughter Mrs Illot.  She then died in 2004.  Mrs Jackson strongly disapproved of Mrs Illot’s personal life, and so decided to leave almost all of her £486,000 estate to three animal charities.  She also left a letter making it very clear that she would be strongly opposed to her daughter receiving anything from her estate.

The English system did not give Mrs Illot any immediate financial entitlement, though it did allow her to apply to the court for “reasonable financial provision”.  That was exactly what she did, beginning a 10 year rollercoaster which saw her fortunes rise and fall dramatically.

The Supreme Court ultimately gave weight to Mrs Jackson’s wishes, helped by the good work that the charities would do with the money. It seems to mark the end of an uncertain period for English observers, with something like a return to the traditional position, whereby the courts will take a cautious approach in interfering with the deceased person’s wishes.

There is no need to look to the courts to understand the equivalent position in Scotland.  Here, children have what are known as “legal rights”, which allow them to claim part of their parent’s estate, whether or not the parent left a Will.

The legal rights claim is for a fraction of the parent’s “moveable estate”, which includes cash, shares, cars, furniture and jewellery etc., but excludes land and houses.  The size of that fraction depends on whether the deceased left a surviving spouse, and whether they had other children.  Where there is no surviving spouse and no other children, the child would be entitled to claim half of the parent’s moveable estate.

In this respect, if Mrs Jackson had died living in Scotland, it would have been fairly straightforward to value Mrs Illot’s claim – though without knowing what kind of assets were in Mrs Jackson’s estate, i.e. heritable or moveable, we cannot say whether her daughter would have been better or worse off.  She certainly would have saved a lot in legal fees.

Look at it this way:

  1. If Mrs Jackson’s estate was mostly “moveable”, then Mrs Illot would have had quite a large claim – potentially half of the moveable estate. She would likely have been better off than what she got through the English system.
  1. If Mrs Jackson’s estate was largely “heritable” i.e. her money was tied up in property, then the “moveable estate” would have been more modest, and so the claim for legal rights would have been much less valuable – perhaps meaning that Mrs Illot would be worse off than what she received in England.

The Scottish system at least makes it easy to calculate the child’s claim, though it is often criticised for the way in which it produces greatly different results depending on whether a person’s estate is mostly heritable or moveable.  It is an area where the law may change in the next number of years.

Whether you are dealing with England or Scotland, the message is clear:  by having a Will in place, you are taking a big step towards ensuring that your estate will go to the people that you intend.  The position is very different where you die without a Will – but that’s a story for another day!

Blackadders’ Private Client Department is highly experienced in preparing Wills, as well as assisting clients with a wide variety of other succession issues including planning for legal rights claims. If you need to speak to somebody regarding these matters, please do not hesitate to contact us.

Stewart Dunbar & Michael Rossi 
@LawyerStewartD
www.blackadders.co.uk

 

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