Succession Law Reform 2016 – Stage One principal proposals
The Bill intended to commence the radical changes to Scottish succession law has been published. What are the main effects likely to be?
Section 1 – Effect of divorce, dissolution or annulment on a Will
In a case in 1976 Lord Stott narrated that in a Will Mr Cooper had bequeathed his estate to “my wife Mrs Dorothy Cooper” and the question to be decided by him was whether Mrs Cooper was entitled to receive the bequest notwithstanding that Mr Cooper had divorced her. He went on to say:-
“One might have supposed that long ere this the law would have found a simple answer “Yes” or “No” to that question but, with the exception of one Outer House case, it appears there is no direct authority on the point.”
Regrettably, Lord Stott, in his inimitable way, did nothing in that case to provide us with a definitive answer, nor has any Judge subsequently.
There are differing views as to the position now. In the explanatory notes to the Bill, it is stated that a Will which makes provision for the spouse or civil partner (‘CP’) is still valid following the breakdown of that relationship by divorce, dissolution or annulment. In our opinion the position is less certain, and although it is up to the other potential beneficiaries to prove that the bequest to the divorced spouse/CP has lapsed, each case would be decided on the terms of the Will, and the decision is likely to turn on whether it can be established that the Will is in the nature of a family provision. If it is a family provision, the other beneficiaries may succeed to the estate.
At last this uncertainty will be removed, as under Section 1, for any domiciled Scot, all provisions in a Will in favour of a former spouse/CP would be treated as having been revoked when the relationship came to an end, unless the Will expressly states that the provisions are to subsist even if the relationship is terminated. Importantly, the former spouse/CP is to be treated as having failed to survive the testator (a legal fiction) which will mean that the subsequent provisions in the Will should become effective, rather than the estate falling into intestacy; most subsequent provisions come into effect only “in the event of my said husband/wife/CP predeceasing me” so, although that will not have happened in real life, it will be deemed to have happened for the purpose of the Will.
Section 2 – Effect of divorce, dissolution or annulment on a special destination
Special destinations are included in about two-fifths of joint property titles, and are a menace, as in the past they have given rise to unjustified and inequitable results. Most commonly, the special destination provides that on the death of the first spouse/CP, his/her share of a house/flat passes to the survivor, and in a contest with any Will, the special destination rules. There is no doubt that, as the law is now, if there is a divorce or the like, the special destination continues in effect.
Section 2 of the Bill proposes that a special destination of property in favour of a former spouse/CP will be revoked on divorce or the like. This provision is to be extended to apply to ALL property in joint names, not just houses and flats.
Sections 3 and 4 – Rectification of a Will
People often make mistakes, and Section 3 is intended to enable a Court to rectify a mistake in a Will, where the Will “fails to express accurately what was instructed” by the deceased. To take advantage of this, the following conditions must be met:-
- The deceased was domiciled in Scotland;
- Someone other than the deceased prepared the Will on the deceased’s instructions (for example, a family friend, an incompetent financial adviser or solicitor);
- An application to rectify the Will is made within six months from the date of Confirmation, if applicable, or otherwise the date of death. The period can be extended on cause shown; and
- The Court is satisfied that the Will fails to express accurately what was instructed.
This could be a useful provision, particularly where a Will gives rise to Inheritance Tax liabilities which could have been avoided by a different approach being taken in the Will. HMRC will have an interest in any such proceedings.
Section 5 – Revocation of a Will
Under the current law, an earlier Will (Primus) which is then revoked by a subsequent Will (Secundus), automatically revives if that later Will (Secundus) is then revoked by a new Will (Tertius). However, under section 5 of the Bill, Will Primus is only to be revived automatically if the testator either re-executed it, or makes a new Will (Quartus) on the same terms as Primus which had been revoked by Secundus. Go figure!
Section 6 – Death of certain beneficiaries in a Will before the testator.
In some circumstances a beneficiary of a legacy in a Will dies between the Will being executed and the death of the testator. Under the present law, in some cases the beneficiary’s issue would “step into the shoes” of the beneficiary and inherit the legacy as a substitute, unless the Will expressly precludes this. This applies to legacies bequeathed to the testator’s children, or nieces or nephews where the provision is one where the testator has made a provision such as a parent would have made.
Section 6 restricts the class of potential legatees to whom this applies to the deceased’s descendants only.
Section 9 – Uncertainty of survivorship
The current rules of survivorship stipulate that where spouses/CPs die in a common calamity, it is presumed that neither survived the other. In all other cases, the younger is presumed to have survived the older. Going forward, when the Bill is enacted, in all cases where two people die in these circumstances, each is to be treated as having failed to survive the other, even if they are spouses/CPs.
These are minor issues when compared to the proposed extension of what might be described as forced heirship to all assets and changes to the rights of cohabitants now subject to further consultation.