Inheritance and Wills in Scotland
Scotland v England. No, it’s not football, or even - Heaven help us - politics. I am talking about the law – wills in particular.
Most of us are aware that Scotland is a separate jurisdiction from England – or England and Wales technically. Northern Ireland has its own setup.
Some laws cover the UK – most tax (of which more later), employment law and benefits.
But Scotland has its own system for wills and inheritance. That’s important, because if a person picks the wrong jurisdiction for a will, it can lead to disaster – and too late to fix, if they are, well, dead by the time the problem emerges.
It may seem obvious – I live in Scotland, I will contact a Scottish solicitor and take advice on making a suitable will. That is right and routine for many. But there can be complexities. Where you live is only part of the story. You may have assets overseas or even in England. You may be English but just living in Scotland. Or you may go online and use a web will service that does not understand the finer points of law that are relevant and important.
Where you live is not the only reason to make a local will. If you regard yourself as Scottish, intend to retire to Scotland after working down south, or indeed spend time in both jurisdictions but feel “at home” in Scotland, you may be “domiciled” here – and the correct will is a Scottish one.
It is not all or nothing. English and Scottish wills are recognised in each other’s jurisdiction – but only if they conform to the rules of will drafting and execution. One crucial example: in Scotland a will must be signed on each page (not each sheet – you can use both sides of a bit of paper and only sign one side). So if the will is more than a single A4 – as many wills are - if it is to be effective in Scotland it has to be signed at the foot of each page. It also should be signed by a witness as well, but that at least is common between England and Scotland.
The language of wills is different. For land and houses, Scots talk of joint ownership pro indiviso, and survivorship destinations, whereas in England it is joint tenancy, and tenancy in common – also more generally their meanings and ours are slightly different. In Scotland if a couple buy a home together with a survivorship clause in the title - i.e. when one dies the other automatically inherits the deceased’s share no matter what a will says – this needs to be taken into account when creating wills. It is a risk making a will in the wrong jurisdiction, as the meaning of a word or phrase may be different north and south, taking the will away from what was intended.
There are wider issues underlying Scottish wills. Our law provides a set of legal rights within the family that cannot be overwritten by will. Children have rights known as legitim (from the old days when an illegitimate child had no rights at all in parental estates – prejudice long gone). It means children have a right to a share of each parent’s estate no matter what the will says – even if it expressly disinherits. It is not challenging the will to overturn it, but legal rights are embedded in Scottish law so a claim can be made against the executor and will be upheld – there should be no need to go to court.
That legal claim, although automatic and unbeatable, is only against the moveable property, i.e. money, shares, insurance, cars and paintings etc.. It is not against heritable property – land and buildings – so when being advised on making a will, it is important in Scotland to get a full account of the what’s in the estate, possessions and wealth of the client, as well as the family setup. Advice should be given on making the will but also how the estate will be divided if legal rights clams are made. A beneficiary, whether a child or a surviving spouse, after the death has to elect whether they take the legal rights or the legacy left to them in the will. Usually they will go for whichever is higher.
In England there is none of that, but there if a dependant is excluded from the will, or not sufficiently provided for, the law provides for that individual to make a claim reasonable provision out of the estate. Typically, a dependent is someone who lived with, and was financially supported by the testator, for instance, a partner, adult child or disabled relative.
Although I am highlighting differences, one principal remains consistent between the two countries. Any adult (in Scotland age 16, in England age 18) should take advice on making a will. Most of us by the time we die have something to leave, a home, savings, insurance, even a car. In the absence of a will, the rules of intestacy apply – including those legal rights claims.
In Scotland intestacy provides a fixed scheme of division among surviving spouse/civil partner and children (or parents, siblings and wider family if no-one closer survives) gets landed on top of the estate no matter what you want, or indeed said. Only a written, meaningful, signed will can meet your wishes. And you cannot donate a bequest to charity or to a loved one or friend without making a proper will.
I come back to tax. Inheritance Tax covers the whole of the UK, though Scottish court procedures are different – everyone knowns the word Probate, but that is the English term. In Scotland we have Confirmation, administered through the sheriff courts (which they also don’t have in England) and its procedures are very different from elsewhere. But HMRC is still the body to be satisfied with estate arrangements – again, if the will made does not work in the correct jurisdiction, it may be disregarded, and the executor may have a whole lot more tax to pay out of the estate, money that could have gone where it was intended, family or friends.
The bottom line is that everyone should at very least take advice on making a will if they haven’t done so already – or revise a will made if it is more than a few years ago since it was created, or there has been a substantial change in life circumstances. In particular, people forget to update their will when they separate from a partner, and that can lead to catastrophe – a spouse not seen for 20 years can fetch up at the funeral and legally demand a share of the estate.
Scottish wills are flexible, reassuring, cost-effective and make up an important element in legal life. Make sure you are covered, and in particular, make sure you choose the right jurisdiction, lawyer and will.