May 2014 – “Legal rights”: where there’s a will there’s not always a way

Author: Mitchells Roberton
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Introduction and background

  • It is a distinctive feature of Scots law that, on death, a person’s surviving spouse and children have automatic entitlements to a certain cash amount from the deceased’s estate. These entitlements are called “legal rights”. They apply no matter what the deceased’s will may say.
  • The surviving spouse and children do not have to take these entitlements. They may give them up (“discharge”) their rights and, instead, accept whatever the deceased’s will provides. For example, as is common enough, a deceased’s will may say that if their spouse survives s/he gets everything and the children nothing on the first death. Often in such a case the children are happy enough to give up (discharge) their legal rights so that the surviving parent gets everything. The children may well be happy enough to take it that they will inherit on the second death.
  • “Legal rights” have been around for a long time. It has been said that: “[t]he origins of legal rights are shrouded by the mists of time, but they have functioned in Scots law for at least seven centuries…” So the subject hardly appears to qualify as a “bullet point update”. But there have been moves for reform in relation to legal rights and the rights are, in any event, controversial. Indeed, a recent article (“Legal rights: a little discretion required” by Douglas J Cusine) in the Scots Law Times touched on various criticisms of the system.
  • The aim of this Note is (1) to outline what “legal rights” are, (2) to indicate the different set-up that applies in England, (3) to mention the reforms proposed by the Scottish Law Commission and (4) to focus on one particular example covered in the Scots Law Times article mentioned above.
  • In this Note references to a “spouse” include a civil partner and references to “children” include adopted children and any born outside marriage. (If a child dies before the deceased leaving children or remoter descendants of his or her own then they are entitled to the “legal rights” instead. But that aspect is ignored for the purposes of this Note.)

(1)          What “legal rights” are

 

  • As the law stands, the surviving spouse is entitled to a sum of money equivalent to one-third of the deceased’s “net moveable estate” if there are surviving children and one-half if there are no surviving children. Broadly speaking, the “net moveable estate”  means the value of all property to which the deceased was entitled at death – except for any house(s) and land – less the deceased’s relative debts.
  • Correspondingly, the children are entitled, equally amongst them, to a sum of money equivalent to one-third of the deceased’s “net moveable estate” where there is a surviving spouse, and one-half where there is not.

(2)          The different set-up in England and Wales

 

  • In England and Wales there is no similar pre-determined fixed entitlement for spouses and children (or anyone else). Instead, the spouse and children (and certain others) may apply to the court if they feel that the provisions in their favour under the will are “not such as to make reasonable financial provision” for them. In other words, matters are left to the court’s discretion rather than there being clear fixed rules applying regardless of the circumstances.

 

(3)          Reforms proposed by the Scottish Law Commission

 

  • The Scottish Law Commission (“SLC”) when reviewing “legal rights” considered the pros and cons of having fixed rules which apply come what may as against the scope for having discretionary provisions as in England and Wales (and elsewhere). In the end they opted for retaining a fixed and certain system (albeit subject to various reforms) rather than introducing the uncertainties of court applications for discretionary awards.
  • (Nothing more is said here about the proposed reforms given that they are still only proposals and, if enacted at all, are not likely to be so for quite some time.)

(4)          Focus on certain of the criticisms of the system covered in the Scots Law Times article

 

  • Fixed rules have a decided attraction: they are (relatively) certain in application and, in principle, everyone knows where they are. They should generally avoid the need for what may prove lengthy and expensive court applications. Nevertheless they can apply harshly in certain cases. The example below is derived from an actual case met in practice by the author of the Scots Law Times article mentioned.

The deserting wife

 

  • Mr X married and had two children. When the children were very young, Mrs X left him and the children.
  • Mr X’s religion did not permit him to get a divorce, but after his wife left, he met and lived with someone who was thought by all who knew the couple to Mrs X (here called “Mrs X2”).
  • Mrs X2 brought up the children and they regarded her as their mother.
  • When Mr X died, he left virtually his whole estate to Mrs X2; the children were grown up by then and Mr X left them each a small legacy.
  • As is not uncommon in practice, Mr X’s solicitors advertised for claims against Mr X’s estate.
  • In response Mr X’s solicitors got a letter from the first Mrs X to say she would claim her “legal rights”.
  • It was only when this letter was drawn to the attention of the children that Mr X’s solicitors discovered that Mrs X2 had not in fact been married to Mr X.
  • The children were furious that a woman, with whom they had not had any contact for over 30 years, was entitled to claim anything at all – let alone a cash sum equal to the value of one-third of the “net moveable estate”.
  • For cases such as these the discretionary system adopted in England and Wales can look preferable to the rigid system we have here.

Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Neil Mackenzie: email njm@mitchells-roberton.co.uk

 

 

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