Posted on Feb 17, 2017 in Family Law
Our society has changed over the past 50 years, from welcoming the introduction of same sex marriages and civil partnerships to cohabitation becoming the new norm. It may therefore come as a surprise that until recently there has been no update to the laws of succession since the mid-1960s.
Succession is the law which governs the division of a person’s assets following their death. Overdue legislative amendment was made to this law by the Succession (Scotland) Act 2016 on 1 November 2016. So how does this legislation affect Family Law?
What Happens to a Will on Divorce?
Prior to the amendment a divorce or dissolution of civil partnership would have had no impact on a person’s Will in Scotland. Accordingly, following the termination of a relationship the former spouse or civil partner could still receive the benefit or power of appointment left to them in an earlier Will. This meant that separating couples needed to consider whether or not they would still want their ex-partner to benefit under their Will in the event of their death. If they did not (as is often the case) then they needed to update their Will.
In contrast, this new legislation drastically changes the position by treating the former spouse or civil partner as having failed to survive the person who made the Will. In essence, any provision for the ex-spouse or partner within the Will now automatically falls on divorce or dissolution, provided that two elements are satisfied:
Firstly, the deceased must have been domiciled in Scotland after 1 November 2016. Secondly, the divorce or dissolution must be obtained from a court in the United Kingdom, the Channel Islands or the Isle of Man or is otherwise recognised in Scotland.
Undoubtedly this legislative amendment will spell good news for the majority of divorcees. However, it is essential that separating couples are made aware that there will be a period prior to the divorce or dissolution when the provision in the Will still stands despite their separation. In order to prevent a divorcee from falling into this trap, this period can be covered off by way of an amendment to their Will. Further, when a person leaves an inheritance to their children in their Will, the child is only entitled to take what is due to them if they are aged 16 or older. Accordingly, if they are under 16 years old this inheritance would be paid to the surviving parent, who is potentially the ex-partner. Many people may not wish for their former partner to have any control over the children’s inheritance so it is essential to highlight that this default position can be amended, but it requires specific action to be taken.
Let us now turn our attention to the other side of the spectrum. Although it may be uncommon, it is not unfathomable that some people may wish their former spouse or civil partner to still derive the benefit left to them in their Will. This often happens when a couple have young children together. In that situation a document called a codicil can be drafted into the Will in order to displace the operation of this new law.
Jointly Owned Property
The new legislation also impacts on joint property. Often the title deeds to a jointly owned property will include something called a Special Destination or Survivorship Destination. This will typically provide that each person owns a one half share in the property and in the event of one person dying, their one half share will automatically pass to the other. Previously such Destination remained intact following an individual’s death, meaning the matrimonial property would automatically pass to the surviving party despite the couple having divorced. The law was amended in 2006 to provide that a Special Destination would automatically be revoked on divorce, with this only relating to heritable property. Under the new law, any Special Destination is automatically revoked on divorce or dissolution for both heritable property and moveable property, for example shares and investments. Again, as with the new provision for wills, if a person does not want the Destination to be revoked on divorce then they need to take action to prevent this, for example by making specific reference to this within the title deeds to the property.
As each family’s situation is different to the next, it is important to seek specialist Family Law advice from the outset to ensure certainty going forward. Elaine Goodwin is a trainee solicitor in our Family Law team. We are always delighted to talk without obligation about whether we might meet your needs. Call Elaine Goodwin on 01382 229111.