Will the new Scottish Government make big changes to the law of inheritance?

The legislation which says who should inherit when somebody dies dates back to the 1960s. The last Scottish Government wanted wide-ranging and fundamental reforms, with the new legislation being passed in Session 4. However, some parts of the farming community are worried about the possible effect of some of these reforms on the inheritance of family farms.

Policy background

The law which says who should inherit when somebody dies is called ‘the law of succession’. Much of it is currently found in the Succession (Scotland) Act 1964 (c 41).

This law is widely recognised as being overdue for reform, as society has changed significantly over the past half century. Individuals are living longer and many more people own their own homes. Family structures have changed too, with more “blended families” and many people choosing to cohabit rather than marry. Just over a third of our population is single. Scotland’s population’s is also ageing; with the percentage of those aged over 65 increasing fairly significantly (Scottish Government 2015).

What hasn’t changed of course is the inevitability of death and the need for clear and fair laws in place which reflect modern day society. In practice though, succession law tends to be a difficult area to reform. There are often very mixed views in society on how large a role governments should play in limiting the freedom of individuals to decide what should happen to their property after death. Policy debates can also rage on topics including to what extent a cohabitant of the deceased should be treated like a spouse or civil partner on death.

inherit

The previous Scottish Government’s 2015 consultation document

In 2015, the previous Scottish Government published an important consultation document proposing reforms which would effectively create a new set of laws designed for the 21st Century (Scottish Government 2015). These were based on an earlier in-depth report (Scottish Law Commission 2009) by the Scottish Law Commission.

Who should inherit when there is no will?

Most of the Scottish population do not have a will and so a very important part of the consultation document set out the proposed rules which would cover that situation. We have such a set of rules at the moment and they favour any deceased’s spouse or civil partner and any children of the deceased. However, sometimes, where there are no children, the current rules say that the spouse or civil partner must share the estate with the deceased’s parents and siblings. Instead, the previous government wanted the spouse or civil partner to inherit everything in this situation.

Should someone be able to disinherit their spouse, civil partner or children?

The consultation document also proposed very significant changes to the law where the deceased did have a will.

At the moment, a key feature of the law is that it is not possible for someone to entirely disinherit (leave nothing to) their spouse, civil partner or children. This includes their adult children. Where a will is made that tries to do this the law steps in to say that such people should nevertheless get a share of the deceased’s money and property (other than the land or buildings he or she owns).

An important policy issue that the then government had to consider was whether the law should continue to protect adult children in this way. On consultation, it proposed two options: one would further limit the freedom of an individual to disinherit their adult children; the other would enhance that freedom.

A new regime for cohabitants

Another key feature of the proposals was a significant increase in the rights of any cohabitant of the deceased. Such individuals have relatively limited rights at present and only where the deceased has not made a will. What was proposed was a new regime for cohabitants which covered all situations. It would give a cohabitant “an appropriate percentage” of what he or she would have inherited if he or she had instead been a spouse or civil partner. That appropriate percentage was to be decided in individual cases, looking at factors such as the number of years the couple had lived together.

The concerns of the farming community

For many people, the proposals were a very welcome attempt to overhaul an outdated area of law.

However, some members of the farming community were very worried by some of the proposals. At the moment, the protection from disinheritance available to spouses, civil partners and adult children does not extend to land and buildings. The consequence of this is that for many generations a farmer has been able to leave his farm to his first born son in his will, knowing that this wish would be fulfilled.

However, all this would change under one of the options the previous Scottish government proposed. In particular, all children of the farmer, as well as the farmer’s spouse or civil partner, would be able to claim a share of the farm, regardless of what any will had said on the topic. The concern was that, in practice, small parcels of land would have to be sold to fulfil such claims. This, in turn, might affect a unit’s commercial viability.

The previous government acknowledged the importance of the agricultural sector to Scotland’s economy and was sympathetic to the concerns expressed, particularly in relation to small family farms and farms where the farmer was an agricultural tenant. It sought views on the possibility of a special rule for the sector. However, the Government also stressed that there were “significantly polarised” views on this issue, with a majority of stakeholders outwith the sector not supporting such a move.

Sarah Harvie-Clark

Sources:

Scottish Government. (2015) Consultation on the Law of Succession. Available at – http://www.gov.scot/Publications/2015/06/7518 [Accessed 27 April 2016]

Scottish Law Commission (2009) Report on Succession, Scot Law Com 2015. Available at – http://www.scotlawcom.gov.uk/files/7112/7989/7451/rep215.pdf [Accessed 27 April 2016]