10th September 2020

Intestacy Rules: 5 things to consider when dealing with an estate where there is no valid Will

  1. What is intestacy?

If a person does not leave a valid Will, their estate requires to be dealt with by the intestacy rules contained in the Succession (Scotland) Act 1964, as amended (“the Act”). This sets out a fallback position, providing the order of inheritance and financial limits for surviving spouses and civil partners, children and other relatives.

  1. Who are the deceased’s closest relatives?

If there is no surviving spouse or children, beneficiaries could end up being distant relatives who may not even have known the deceased during his or her lifetime. A common misconception is that a surviving spouse will inherit the entire estate, however this is often not the case depending on the size of the estate and what other relatives there are, such as children, parents and siblings of the deceased. An estate or a proportion of it could well end up being passed to relatives who the deceased did not wish to inherit.

  1. Who is entitled to inherit what?

The Act sets out financial provisions known as prior rights, legal rights* and free estate. Prior rights and legal rights are relevant for a surviving spouse or civil partner. Legal rights and free estate are relevant for any surviving children or remoter issue e.g. children of a predeceasing child. If there are no surviving spouse or children, the Act determines the order of succession depending on other surviving relatives and the proportions of the estate that these relatives are each entitled to.

  1. What are the potential additional procedures when someone dies without leaving a Will?

In addition to the usual procedures in estate administration, in cases where there is no Will, there may be a requirement for Executors to be appointed through the court – there could be potential family disputes with this and the deceased’s wishes are not reflected as they are when a Will is made where Executors are chosen by them. There is often also a requirement for a Bond of Caution, which is a type of insurance policy provided by an insurance company to protect creditors and beneficiaries in estates where there is no Will.

  1. What proposed reforms of the current law are being considered?

The Scottish Government has proposed changes to the current laws of intestacy in the past and again more recently, mainly due to the general consensus that the current system is too complex and does not reflect modern families.  It has yet to be agreed the best way forward and the Scottish Government are still at the consultation stage, but a simpler system could result in a spouse inheriting the whole estate if there are no children or remoter issue of the deceased for example, regardless of the size of the estate. The proposed reforms may also provide for cohabitants who currently are not provided for under the Act, they are only entitled to apply to the court for a discretionary award from the deceased’s estate in intestacy cases. It remains to be seen if any proposals will become law in the future.

Dealing with intestate estates can be complex and if you would like some more advice regarding this then please get in touch with our Executries team who would be happy to assist.

For more information about legal rights in estates where there is a valid Will, please refer to the article “The Intricacies of Legal Rights: 5 points to be mindful of” https://bit.ly/32bNqF3 by Megan Hainey.

Joanne Todd, Associate Solicitor
Private Client, Executries
Blackadders LLP
@ExyLawyerJo

www.blackadders.co.uk

 

 

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