Intestacy in Scotland

Everyone knows that they should have a Will. Whether or not they have done one is a different story.

But what happens when someone dies without a Will?  It’s commonly thought that the estate goes straight to ‘the Crown’ automatically, but is that correct?

The Laws of Intestacy in Scotland provide the framework for the distribution of the estate when someone dies without a Will. The personal circumstances of the deceased are important in determining who the estate is distributed to and in what proportions. In addition, an executor is appointed by the court but, broadly speaking, can only be someone entitled to receive a share of the estate.

Looking at the rules more closely, if the deceased was married or in a civil partnership at the time of their death, their spouse/civil partner gets the first bite at the cherry. They are entitled to ‘Prior Rights’, which are:

1. The deceased’s share of the ownership of the matrimonial home, up to the value of £473,000;
2. The deceased’s share of the furniture located in the matrimonial home, up to the value of £29,000; and
3. If the deceased had children, the spouse/civil partner also receives £50,000. Where the deceased had no children, the surviving spouse gets everything else.
4. Where the deceased had children, the surviving spouse is also entitled to Legal Rights in the estate, comprising 1/3 of the deceased’s non property assets, after deduction of debts and funeral expenses. Then, the children get everything else.

There are obviously situations where someone will be unmarried and have no children at the time of their death. In those circumstances, there is a ranking order which directs the way in which the estate is distributed.  Parents and siblings rank equally at the top and grandparents, then aunts/uncles and their descendants, follow next on the list.

In the unusual circumstances that someone dies intestate with no surviving family members at all, the Crown will receive the estate as ultimate haeres (i.e. last heirs).

So far, so good. Although the surviving spouse or civil partner may feel aggrieved at not receiving more in a larger estate, in an ideal world, this can be remedied by reaching agreement between the individual family members.

However, we do not live in an ideal world and there can be situations where the Laws of Intestacy can produce unexpected results.

• Cohabitation – Cohabitees have no automatic rights on the estate of a deceased partner and have to make a claim to the executor. If the deceased cohabitee had a Will, no matter how out of date it is, the surviving cohabitee cannot claim anything. And, where there is no Will, the surviving cohabitee only has 6 months from the date of death to make their claim.  Legislation has been put in place to extend this to 12 months but is not yet in force.
• Separation – If a Separation Agreement has not been signed, or if the Agreement does not mention succession, a surviving spouse/civil partner may still be entitled to a share of the deceased spouse/civil partner’s estate. The surviving spouse/civil partner would not be able to have any claim on the matrimonial home or the furniture in that home if they no longer live there but would still be entitled to the cash sum.

And then there are the cost implications of dying intestate. If you have not prepared a Will, you have not officially chosen your executor.  The court does not know whether the person they appoint as executor is trustworthy and therefore insist that the executors are backed up by an insurance indemnity policy. There is a one-off insurance premium to pay for the policy and it is priced according to the size of the estate. Therefore, the bigger the intestate estate, the more the policy will cost!

To take control of the distribution of your estate after your death, and avoid unnecessary costs or surprises, contact the Private Client team at VMH for an appointment