Changes to Scottish succession rules
Published on
25 January 2023
December may now feel like the long and distant past, but the introduction of the Trusts and Succession (Scotland) Bill in Scottish Parliament is an important one to watch for charities fundraising for legacy gifts in Scotland.
This Bill sets out new rules for intestate succession, which could have an impact on charitable legacies.
The change to succession law sets in motion a new order for which family members inherit a person’s money or property where that person has passed away without a Will.
Currently, Scottish law dictates that spouses and children are entitled to a specific share of the estate whether or not a person has left a will. If there is no will, any remaining property will pass in its entirety determined in a set order based on who survives the deceased. If there are children of the deceased (or grandchildren where a predeceasing child), they will take the remainder. If there are no children, then the estate is shared among surviving parents and siblings. It is only where there are no children, parents or siblings that a spouse in inherits the rest of the estate. That can come as a surprise to some.
The new Bill proposes that the spouse inherits after children. A spouse will now leapfrog parents or siblings. This would mean that if someone died without a will, leaving behind a spouse, but no children, the spouse would inherit everything. But if the deceased person had any children (or grandchildren where a predeceasing child), they would inherit any assets left after the share identified under legal and prior rights.
For charities who rely on gifts in Wills, the challenge around such a system of prior rights and succession laws is that it can deter people from feeling they need to write a Will if their main beneficiaries are already accounted for when they pass on. While this may well be a more sensible order for beneficiaries, it might create the perception that it is now less important to make a will. That could reduce opportunity for legacy giving. Saying that, even with the order of succession being changed, there are many other reasons why having a will is important. It remains the case that relying on the laws of intestacy is not to be recommended.
See more in this blog from Alan Eccles at Bannatyne Kirkwood France & Co.