Publication - Consultation paper

Law of succession: consultation

Published: 17 Feb 2019
Directorate:
Justice Directorate
Part of:
Children and families, Equality and rights, Law and order
ISBN:
9781787814684

We are seeking views on a new approach to reform of intestate succession and on cohabitants' rights in intestacy, as well as on a number of discrete succession issues.

52 page PDF

748.6 kB

52 page PDF

748.6 kB

Contents
Law of succession: consultation
Chapter Two - Intestacy

52 page PDF

748.6 kB

Chapter Two - Intestacy

Intestacy

2.1 A scheme for intestacy provides a default set of rules about what should happen to someone's estate when they die without a will. The Scottish Government's view is that a scheme for intestacy should reflect outcomes which individuals and their families would generally expect and on which there is a degree of consensus.

2.2. The existing law as it relates to intestacy has the potential to create unfairness. The default position therefore needs to be clear, equitable and reflective of our modern day society.

2.3. Just over three quarters of those who responded on the issue agreed that the policy aim of any scheme of intestacy should be to allow the surviving spouse or civil partner to remain in their home. This recognises that they are likely to have operated as an economic unit.

2.4. Under the current law, where a person dies without a valid will, the following scheme will apply.

Prior rights

After debts have been paid, the first call on the estate is the surviving spouse or civil partner's prior rights which comprise

  • the right to the home in which s/he is living up to a value of £473,000
  • furniture to a value of £29,000
  • the sum of either £50,000 or £89,000, depending on whether the deceased left children.[5]

Legal rights

After prior rights have been met, the next call on the estate is legal rights. Legal rights can only be claimed from the deceased's moveable property.

The surviving spouse or civil partner has a legal right to one-third of a deceased's moveable estate if there are 'issue' (children) or to one-half of the moveable estate if there are no issue. The issue share one-half of the moveable estate if there is no surviving spouse or civil partner or a third if there is a surviving spouse or civil partner.

Remainder of the estate

What remains of the estate is distributed in accordance with section 2 in the 1964 Act. In the absence of children or remoter issue this will result in surviving parents or siblings taking priority over a surviving spouse or civil partner.

2.5. The Commission criticised the current rules because of their complexity and because the types of assets in the estate affect the outcome. They proposed a simplified scheme for dealing with intestate estates as follows:

  • A spouse/civil partner should inherit the whole estate if there are no issue;
  • If there is no spouse/civil partner, issue (biological or adopted) should inherit the whole estate;
  • Where there is a spouse/civil partner and issue, the spouse/civil partner should get the first £300,000 (the threshold sum) of the whole estate and the remainder of the estate should be divided in two, one part for the spouse/civil partner and the other to the children (biological or adopted) between them;
  • Where the deceased is survived by a spouse or civil partner and issue (biological or adopted), and the net value of the deceased's right in a dwelling house which passes to the spouse or civil partner by virtue of a survivorship destination does not exceed the threshold sum of £300,000, the threshold sum should be reduced by the net value of the deceased's right.

It should be noted that currently step children have no rights to a step parent's estate nor did the proposed scheme extend inheritance rights to step children.

2.6. As already indicated at paragraph 1.3 above, there was support for the recommendations that if there was a surviving spouse/civil partner and no children, the survivor should inherit the whole estate; and where there were children and no spouse/civil partner, the children should share the whole estate.

2.7 However, there was a range of views on what an appropriate split in the estate should be when there was both a surviving spouse/civil partner and the deceased's children. There is an inherent tension in this situation because the more a spouse/civil partner is entitled to, the less that is available for children (biological or adopted) to share. It was suggested that if the parent's share is high in relation to the average value of estates in Scotland, many children may be effectively disinherited.

2.8. There was also concern about the situation where the deceased had children (biological or adopted) from a previous relationship where the survivor was not the parent of those children. If the estate passed to the survivor, the likely outcome would be that the children from the previous relationship would inherit nothing from their deceased parent.

2.9 What might be considered a typical situation is the example of a married couple with 2 children, one spouse dies and the other inherits the entire estate. At a later date the surviving spouse remarries someone who has a child of their own. When they die the second spouse inherits the whole estate and in turn when they die their child inherits their estate, which is made up substantially of the deceased spouse's estate. In this way the 2 children of the original marriage inherit nothing.

illustrated example for paragraph 2.9

2.10 Figures from the 2011 census[6] show that step families made up:

  • 8% (26,000) of married couple families and 29% (26,000) of cohabiting couple families;
  • 8% of families with one dependent child, 6% of families with two dependent children and 12% of families with three or more dependent children; and
  • Just over half of the 15,000 cohabiting couple families where the youngest dependent child was aged 12 or over.

2.11 Given that these figures were current in 2011, it is likely that the prevalence of step families will be even greater today. As mentioned above in a traditional family setting[7], most children recognise that they will ultimately inherit from their parents on the death of the second parent. The Commission's recommendations do not however address the position of step families. Whilst they considered the position of 'second' spouses/civil partners their view was that:-

"We remain convinced that no distinction should be made between different types of surviving spouse or civil partner. The succession rights of the surviving spouse or civil partner arise solely from their legal relationship with the deceased. Put another way, a spouse or civil partner does not have to "earn" the right to have part of the deceased's estate; the right arises from their status. … This is not to deny the difficulties which may arise in reconstituted families."[8]

2.12 The Commission thought that as any intestate scheme was a default scheme that the remedy for reconstituted families was to make a will. The Scottish Government entirely agrees that the making of a will is likely to be the best means of ensuring that the testator's estate is distributed in the way that they intended.

2.13 The Scottish Government also recognises that not everyone has made a will and that in general terms, the younger a person is, the less likely it is that they will have made a will. The lack of a will particularly in young families, reconstituted or otherwise can create significant difficulties because children may not be of an age where they are self-sufficient.

2.14 A large majority of those who responded to the Commission's Discussion paper agreed with the Commission that the same set of intestacy rules should apply regardless of how a family is constituted.

2.15 However, given the increasing prevalence of non-traditional families the default scheme of intestacy does need to be 'relevant to modern Scottish society and the rights of individuals and families'[9]. The main difficulty therefore is finding a rule which differentiates fairly between first, second or more families because the range of individual circumstances is infinitely great.

2.16 As a result of societal change we know that the current law of succession does not necessarily reflect the expectations of modern families but from responses it is clear that the proposed changes consulted on in 2015 do not do so either. The range of models of what constitutes modern families, all with their own particular circumstances, is in part why it is difficult to build a consensus on change. The law of succession should match, at least to some extent, the reality of family life.

2.17 It will therefore be difficult to settle on a scheme which is sufficiently nuanced to reflect all individual circumstances and the extent of the economic unit which may have persisted between a second/third etc. marriage or civil partnership. A child may have been born to a very short lived previous partnership and the second marriage could be one of a very long duration with many interdependencies. And in any or all circumstances the surviving spouse or civil partner may have contributed more to any jointly held assets.

2.18 We accept that it would not be viable for the 'quality' of any relationship to be considered on a case by case basis and be taken into account when deciding on the distribution of an intestate estate, this would involve valuable court time and would also be costly. Some natural children are estranged from their parents, some step-parents will have a very close relationship with their step children, others will not.

2.19 In an article entitled From the Cradle to the Grave: Politics, Families and Inheritance Law[10], Dr Reid discussed the impact of the existing rules of intestacy on reconstituted families and was of the view that whilst divorce, cohabitation and step-families have reshaped Scottish society, the Scottish Law Commission's Report did not address these impacts and indeed the position of step-children was specifically excluded. Nevertheless, the author considered that the proposed reforms could have the effect of step-children inheriting (indirectly) everything in an intestate reconstituted family and illustrated this potential impact with the following example: -

Take a fictional family consisting of D and C and their two sons. D dies. Her estate is worth £150,000 so that, under the proposals, it all passes to C (the boys could only claim if her estate was worth more than £300,000). At this point the sons are happy for their father to inherit their mother's assets. C subsequently marries CA, who has two daughters from a previous marriage. C and CA pool their resources, including C's inherited wealth, and jointly purchase a new home with expensive furnishings. C later dies intestate leaving an estate which is valued at £250,000 and CA inherits all, a fact which creates a degree of unease within the family. However, when CA later dies (intestate), her blood relatives (the girls) (C's step children) inherit all since CA's stepchildren (the boys) have no inheritance rights.

C's wider family is now deeply aggrieved. Had CA died first leaving an estate equal in value to C, he would have inherited all and the boys would be the lucky beneficiaries on his death, to the exclusion of CA's girls.

The allocation of assets within this fictional family demonstrates the effects of the current proposals. Depending on the arbitrary order of death of the parents, the blood relatives of the last surviving spouse will inherit all.

2.20 Dr Reid goes on to make what is described as a 'tentative suggestion' that the matrimonial property regime that applies in the event of divorce should be considered for inheritance law on the basis that it would "shortcut current efforts to prioritise a spouse's entitlement on death". It is recognised that the divorce regime set out in the Family Law (Scotland) Act 1985 has now operated for over 32 years and its operation has been largely uncontroversial. She suggests that:

"..it may represent a more rational system for apportioning family property between, for instance, the claims of a second spouse after a brief marriage in competition with children of a previous lengthy marriage which had generated most of that property."

2.21 Whilst Dr Reid has some concerns about the focus of the Commission's reforms on prioritising the rights of spouses over those of children, the example offered in the paper of the case Pirie v Clydesdale Bank plc[11] serves to demonstrate that in this particular case, looking at it through the lens of an economic partnership, the widow and pursuer was the 'loser' in comparison to the deceased's daughter. Whilst this is a testate case it nonetheless highlighted the absurdity described by Dr Reid of the spouse having "… been better off had she divorced [her husband] and gained the benefit of the matrimonial property provisions rather than sticking with him and providing the care he needed prior to death." As the judge, Lord Wheatley, commented in his decision, "…while it is easy to see that the pursuer feels that she has been the victim of a monstrous and callous injustice, it is impossible to find on the evidence that any legal remedy can be available to her."

2.22 It is clear that there needs to be a careful balancing, where a competing spouse/civil partner and children of the deceased neither 'win' nor 'lose'.

Comparative jurisdictions

2.23 Among the comments received in response to the consultation, it was suggested that regimes in other jurisdictions be considered. One was 'a community of acquests' akin to that which operates in Washington State.

2.24 The alternative suggestion was to consider the succession regime which operates in British Columbia, Canada which makes provision for children of the deceased who are not the children of the survivor by reducing the value of the survivor's share in intestacy and increasing that available for the children.

2.25 The Scottish Government therefore commissioned research[12] on these two regimes and welcomes views on the suitability of either to meet the expectations of a modern day Scotland. Further detail is set out below.

Washington State model - community property approach

2.26 In intestate succession, the surviving spouse receives a significant share of the deceased's estate and the calculation will depend on whether or not there are dependants, natural or adopted children, or a parent or natural born or adopted siblings of the deceased

2.27 The estate is split into community property which is the property acquired in the course of the marriage (including the family house, salaries) and separate property which is the property acquired by one spouse prior to marriage, or acquired over the course of marriage by gift or inheritance to the individual spouse, and the rents, issues, and profits of separate property. Where there are dependants, the spouse takes the deceased's share of the net community property and one half of the net separate property. The surviving spouse will take three quarters of the net separate property if there are no dependants but there is a surviving parent, or issue of a parent, of the deceased. If there are neither dependants nor a parent or natural born or adopted siblings of the deceased, the whole estate passes to the surviving spouse.

2.28 The system is very similar to that operating for divorcing couples under the Family Law (Scotland) Act 1985 apart from the provision relating to the rights of surviving parents or their issue to inherit.

2.29 In Scotland, for the purpose of divorce, in general terms, matrimonial property is all the property belonging to the parties (or either of them) at the relevant point, which was acquired during the marriage (or before the marriage if it was acquired for use by both of them as a family home, or as furniture etc. for that home). Matrimonial property is shared fairly (equally or in such other proportions as are justified by special circumstances).

2.30 Property which is excluded from division is property acquired before the marriage or after the point of separation and also property which was a gift or an inheritance from another party so far as such property has not been converted into matrimonial property. For example if the 'non-matrimonial' property was sold during the course of the marriage and the proceeds used to purchase something else.

"In Scots law, if an inherited asset is not "converted" to matrimonial property during the course of the marriage, it cannot be taken into account in the financial division. The certainty of this provision contrasts with the variety of approaches taken by the English courts in assessing the extent to which inherited wealth should be divided".

"In Scots law, if a pre-marital asset remains in the same form at the end of the marriage as at the start, it is treated as non-matrimonial and is excluded from division (unless a property bought pre-marriage as a family home - see above). An asset acquired post-separation (whether a lottery win, or a further employment-related bonus) is similarly non-matrimonial, and excluded. Again, the certainty of the Scottish position contrasts with the discretion left to the English judiciary."[13]

2.31 Such property is excluded because it is not the fruit of the spouses' or civil partners' efforts or income. The system in Scotland has been described as clearer and more predictable[14] than the equivalent system in England and Wales.

British Columbia model - threshold approach

2.32 The Wills, Estates and Succession Act ('Act' or WESA) deals with intestate succession in British Columbia. It came into force on 31 March 2014.

2.33 Under this statute, 'spouse' encompasses not only persons legally married to each other but also those who had lived with each other in a marriage-like relationship for at least 2 years. (Cohabitation is discussed in Chapter Three).

2.34 In British Columbia, when all children are the children of both spouses, the spouse will receive the household furnishings and a preferential amount of $300,000 of the estate's value or more. The spouse has a right to purchase the family home within a set time limit. If the children of the deceased are from a prior or different relationship, the surviving spouse's preferential amount is $150,000 with the remainder being distributed to the children.

2.35 As set out in the comparative research[15].

"The rationale for the rule is that in blended families the common children may be treated more favourably that those who are only the intestate's children. By reducing the share of the spouse, a bigger pot is left to the children of the intestate."

2.36 This regime operates on a threshold basis where if the net value of the intestate estate is below that of the spouse's preferential share then the entire value of the intestate estate goes to the spouse.

2.37 This is closer to the current regime under Scots law known as prior rights and as described at paragraph 2.4 above. If a similar regime were to apply in Scotland a view would need to be taken about the appropriate level of threshold or preferential share.

US Uniform Probate Code

2.38 In the United States of America, the Uniform Probate Code in relation to Intestacy, Wills and Donative Transfers (Article II) also makes similar threshold provisions where the intestate share of the deceased's spouse is dependent upon whether or not there are other surviving descendants or parents of the deceased and in the case of descendants, whether or not those descendants are also descendants of the surviving spouse. The provisions operate on a sliding scale basis where the surviving spouse or civil partner's share reduces where there are surviving descendants who are not the descendants of the surviving spouse.

2.39 In this code, in other jurisdictions and indeed the current law in Scotland provides for, in certain circumstances, inheritance by parents and other relatives, where the deceased is survived only by a spouse but not where the deceased is survived only by issue. Such provisions are intended to counteract the prospect of property passing out the deceased's lineal family, should their surviving spouse go on to re-marry.

2.40 It is the view of the Scottish Government that this position is not desirable and indeed the current law in this respect has caused some surviving spouses/civil partners hardship and difficulties, particularly where in life the spouses/civil partners have established a joint land-based business; where they have both contributed significantly to the performance of the business but when one dies intestate, the business has effectively passed to a sibling or other relative of the deceased. Equally a spouse/civil partner may lose their home to a relatively remote in-law.

2.41 It is worth re-iterating therefore that for the purposes of these reforms, the Scottish Government's position is as set out at paragraph 1.3, any reforms taken forward would provide that where there is a surviving spouse/civil partner (and no issue) the spouse/civil partner will inherit all and where there are surviving issue but no spouse/civil partner, the issue will inherit all.

Summary of benefits - threshold versus community property

2.42 Both of the approaches outlined above would offer some protection in situations where there are both a surviving spouse/civil partner and issue. They seem to operate in other jurisdictions without any reported difficulties.

Threshold approach

2.43 The threshold approach has some similarities to our current intestacy regime. What is dubbed the 'preferential share' in the Canadian example is similar to the concept of prior rights. In both cases the size of the preferential share or size of the monetary value of prior rights is larger where there are no children.

2.44 However, the preferential share in the British Columbia model applies to the whole of the intestate estate. Unlike the position in Scotland, there is no distinction between heritable and moveable estate. Rather there are particular rules which apply to the inheritance of the spousal home; in effect the surviving spouse may use their share to acquire the spousal home in whole or in part.

2.45 The application of this regime would therefore need to be considered in the context of the continuing distinction between heritable and moveable property. Without altering the existing prior rights threshold for heritable property downwards, perhaps considerably, it is likely that this approach would continue to result in anyone other than the spouse or civil partner not inheriting.

Community Property

2.46 Again it would be possible to adopt a similar approach on intestate death to that of the operation of the matrimonial property regime in divorce in other words the approach taken in Washington State but using the familiar terminology and application which exists in Scots matrimonial law.

2.47 In divorce some assets are specifically excluded from the pool of assets that fall to be divided between the parties - assets acquired pre-marriage and post-separation, and assets acquired by way of gift or inheritance from a third party. If a similar scheme applied in succession, the excluded assets could form the basis of estate available for children to inherit.

2.48 We know that the divorce regime is largely uncontroversial. In fairly recent research[16] into how the financial provisions on divorce have operated in the Family Law (Scotland) Act 1985, in the context of the number of decided cases arising from the financial provisions it was noted that:

"…it also reinforces the views expressed in interviews to the effect that there are no significant problems with the legislative framework, it works well and, contrary to suggestions that it is overly rigid, in fact it provides ample scope for flexible and diverse outcomes"[17].

2.49 It seems that this approach would offer flexibility. It would take account of the inter-dependencies of the marriage/civil partnership and what had been acquired during the relationship reflecting the reality of the couple's arrangements. The same research commented that the legislation is notable because of the way in which it manages to combine family law and family life and manages to "reflect a variety of models of marital and family relationships"[18].

2.50 The continued retention of the distinction between heritable and moveable property for testate purposes would not impact on this approach as a different type of property distinction would apply in intestate cases.

2.51 Whilst a move to a regime similar to the Washington State approach would represent a more radical departure in terms of succession law reform it would have the merit that it would not be wholly unfamiliar or untested albeit in the slightly different context of divorce. As such, it appears to be quite an attractive option.

Discussion

2.52 The following is intended to illustrate the potential outcomes of the different approaches:-

Scenario

A married couple Angela and Brad.

Angela is widowed and has 2 children (Cosima and David) from her previous marriage. She inherited the family home worth £300k and moveable assets with a value of £120k. When she married Brad they lived in her home as she wanted to maintain some stability for her children. Brad retained the proceeds of his house sale in a personal account. The £120k was placed in a separate account as a personal nest egg. Her salary and that of Brad were paid into a joint account. Angela dies unexpectedly and did not leave a will. Her intestate estate was made up of the family home (£300k), the household contents (£29k), her personal savings of what is now £130k and half of the joint account (£4k).

2.53 The following three examples illustrate how her estate would devolve under the current law in Scotland; under the British Columbia threshold model; and under the Washington State 'community of acquests' approach.

Scots Law

2.54 Brad would have prior rights as described in paragraph 2.4 above. He would therefore inherit the family home worth £300k; furniture to the value of £29k; and £50k in cash. The remainder of the estate would be subject to a claim of legal rights by Brad and Angela's children, but only in respect of the moveable estate. Once the prior rights are deducted from the savings this leaves £84k. Brad has a right to one third (£28k) and Cosima and David to another third (£28k), the remaining third would pass in accordance with the order set out in the Succession (Scotland) Act 1964 which would mean the remaining third (£28k) would also pass to Cosima and David.

To summarise Brad would inherit property to the value of £407k and the children £56k.

British Columbia - threshold approach.

2.55 In this illustration the preferential shares of £300k and £150k which apply in British Columbia have been applied to this example.

2.56 No distinction is made between heritable and moveable property, the value of the estate as a whole is therefore £463k. Because there are children from a previous marriage, Brad would have a preferential share of £150k. He would also inherit the household furnishings, say £29k.

2.57 Once Brad's preferential share of the estate is removed it leaves an estate valued at £284k, this would pass to Cosima and David.

To summarise Brad would inherit property to the value of £179k and the children £284k.

Washington State - 'community of acquests'

2.58 Angela's estate would be considered in terms of what was communal or shared property with Brad and what property was separate and effectively did not form part of their joint property.

2.59 Here the house contents and the money in the joint bank account would be 'community' property and would all pass to Brad. Angela had never assimilated her inherited money into matrimonial property therefore the contents of her personal savings account would be considered 'separate' property as would the house as it was acquired before the marriage and retained in Angela's name. In terms of the Washington State model, half of the separate property would pass to Brad and the other half to the children Cosima and David.

To summarise Brad would inherit property to the value of £248k and the children £215k.

2.60 In this particular scenario both of the outcomes under the threshold and 'community of acquests' models results in a larger share for the children of the deceased than under the current law in Scotland. In the main this is attributable to the property in which Angela and Brad lived being the personal property of Angela. In all models, if a survivorship destination was in place in relation to the family property, it would pass to Brad and not form part of the estate at all.

2.61 In the British Columbia example, different levels of preferential share would obviously change the balance. Similarly in the Washington State model the application of a different percentage split to the separate estate would generate a different result.

2.62 On the basis of the particular facts of the given scenario, which outcome is the fairest? It could be argued that the law as it stands provides Brad with a windfall of the house given the fact that he retained the sale proceeds from his previous home, and that windfall is to the detriment of Angela's children.

Step-children

2.63 The alternate regimes discussed above would, in different ways, address the issue of biological or adopted children of the deceased having some potential protection where their surviving parent re-marries, but do not address the issue of step-children of the deceased being treated on an equal basis with the biological or adopted children of the deceased. As noted earlier currently step children have no rights to a step parent's estate nor did the Commission's proposed scheme extend inheritance rights to step children In an article entitled A Cautionary Tale for Step-Parents and Step-Children[19] it was commented that:

"People may have different ways of defining 'family' and what being part of a family means to them. The idea that "a family is what you make it" or "families are who you love" is true enough when it comes to inheritance if you make a will. But the assumption that each of us can define family for ourselves is not true if we die without a will…. then the law will define our family for us…. [and] there is the possibility that the people they considered family will not inherit from them."

2.64 The article examined the fall-out from the case Peters Estate (Re)[20] where Ileen Peters died intestate in 2013. Her husband of 43 years, Lester, had pre-deceased her in 2009. They had one biological son together and Lester had four daughters from a previous relationship. It was noted that "The children (step and biological) all assisted both financially and otherwise in the maintenance of Lester and Ileen Peters. They functioned as a family unit for many years and all five of the adult children worked together to provide for Ileen. They assisted Lester and Ileen when they were petitioned into bankruptcy. When Lester Peters died intestate, the five adult children agreed that Ileen Peters should receive all of their father's estate."

2.65 Ileen Peter's son was appointed to administer her estate and one of the step-daughters applied to the court for a direction to have the estate divided equally amongst all five children. Because the four step-daughters were not blood relatives the court found that the sole beneficiary was the son. The step-daughters appealed the decision to the Alberta Court of Appeal on the basis that the current law in relation to succession 'has failed to recognise the need to protect blended (step) families'. The Court of Appeal concluded[21] that the law has historically excluded step-children from inheriting the estate of an intestate step-parent and that as the law was clear they were bound to follow it although they also acknowledged that in this case the result was unfair.

2.66 The only jurisdiction that has been identified which allows step children to inherit directly from their step parents is California as provided for in the California Probate Code. The Code provides a two-part test on which to establish whether a parent-child relationship subsisted for the purposes of intestate succession. Certainly the second part of the test would seem to set quite a high barrier, the two-parts being:

(1) the relationship began during the child's minority and continued throughout the joint lifetimes of both the step child and step parent; and

(2) the step child has established the clear and convincing evidence that the step parent would have adopted the step child but for a legal barrier.

2.67 As set out in paragraph 2.11, the Commission did not make any specific recommendations with regard to step children. They considered that to do so would over complicate the law and were not convinced by the argument that sometimes complex situations need complex law. In their view ultimately provision can be made in a will for a step child or through the process of adoption.

2.68 In British Columbia, neither did WESA make any provisions in relation to step-children. As part of the work carried out by BIICL, practitioners in British Columbia were contacted about this issue and reported "that there does not seem to be any appetite for the recognition of un-adopted stepchildren and fictive kin as successors in intestacy…"[22]

2.69 When the results of the Public Attitudes Survey carried out in 2015 was compared with those of 2005, there was a marked decline in support for stepchildren inheriting from a step parent and also being treated on an equal basis with biological or adopted children.

2.70 The numbers of respondents who 'didn't know' what should happen in these circumstances also increased. Perhaps this points to more personal experience of the complexities of reconstituted families and awareness that the issues are not always clear cut with views perhaps being dependent upon the individual circumstances within a reconstituted family. Perhaps conjecture, but for example, a respondent knows 2 reconstituted families the Smiths and the Jones. They are clear that in the case of the Smiths that the step children should inherit but in the case of the Jones thinks they shouldn't, the conclusion is that they don't know what should happen as a general rule.

Ultimus Haeres

2.71 However, as already explained, in Washington State succession law distinguishes property according to whether it is joint/marital property or personal property. This model also serves to provide some limited inheritance rights for step-children but only where it would avoid ultimus haeres - the estate passing to the State.

2.72 The provision applies where a parent (A) leaves property to their spouse B (who is their second spouse) and A also has children from a previous marriage. If when B dies they have no children of their own then the portion of their estate which was inherited from A can pass to A's children i.e. the step-children of B. If B had their own children then the property would pass to them and A's children would not inherit.

2.73 Other states such as Ohio, Iowa, Kentucky and Arkansas have similar provisions where step children (issue of a pre-deceased spouse) may inherit to avoid ultimus haeres.

2.74 When the Succession (Scotland) Act 2016 was completing its parliamentary passage there was some discussion about the role of the State as ultimus haeres in the context of survivorship in the event of a common calamity. A number of the witnesses and indeed the Committee[23] themselves were not supportive of the Crown being the ultimate heir. It should be noted however that the number of estates which ultimately fall to the Crown are small in number. In the first instance, unclaimed estates are advertised and investigated by the National Ultimus Haeres Unit (NUHU) and most estates are claimed during that period by relatives. Unclaimed estates are passed to the Queen's and Lord Treasurer's Remembrancer (QLTR) for administration. But again they are firstly advertised and most are claimed. The number of estates subject to administration are generally in the low double figures.

Conclusion

2.75 None of the above would be intended to reflect the strength or other intricacies of any given step family relationship - this would need to be provided for in a will - it only provides a simple and clear means of recognising the increase in reconstituted families in Scotland today. It will still result in some unfairness.

2.76 The Scottish Government would like to determine if it is possible to identify intestacy reform which would deliver outcomes which would fair and be more in line with the expectations of modern day Scots and their families.

Questions

1. Do you agree that the current approach to intestate succession needs to be reformed?

Yes/No
Reasons

2. Do you agree that the aim of any reforms should be to reflect outcomes which individuals and their families would generally expect?

Yes/No
Reasons

3. If you favour a different approach, would you prefer to model that change on the regime in Washington State or British Columbia or neither?

Washington State/British Columbia/Neither
Reasons

4. Which of the Washington State or British Columbia models delivers outcomes which most closely reflect what modern Scottish families (with all their many permutations) might expect to happen on the death of a spouse/civil partner?

Washington State/British Columbia
Reasons

5. If the Washington State model ('community of acquests') is your preferred model, do you think that the Family Law Act (Scotland) 1985 financial provisions on divorce could be readily applied to intestate estates?

Yes/No
Reasons

6. If the British Columbia model (threshold) is your preferred model, what do you think should be the appropriate threshold levels in Scotland?

Comments

7. Should step-children have a right equivalent to that of biological or adopted children to inherit in intestacy?

Yes/No
Reasons

8. Should step-children be able to inherit in order to avoid a step parent's intestate estate passing to the Crown?

Yes/No
Reasons


Contact

Email: Frances MacQueen succession@gov.scot