Look after the one you love
Advises Gregor J Mitchell, Partner at Maclay Murray & Spens
Buying a new home is a costly and time consuming exercise. It is easy to overlook matters that seem unimportant in the welter of "to do" lists, but there are certain things you should consider when your circumstances have changed in such a dramatic manner and which your solicitor will help you to finalise.
Something many people neglect is protecting the future of their loved ones through lack of understanding about the law or simply unwillingness to face their own mortality. It is however vital that you check - do you have an up-to-date Will? Circumstances can have changed dramatically from the date a Will was made to the date that it is put into effect. Worse still, if you have no Will, it is not guaranteed that everything you possess (for example a new house - probably your single biggest asset) will pass to those you might intend. Especially relevant is a situation where you have just completed the purchase of this substantial asset with your spouse or partner.
If you do not leave a Will (i.e. if you die 'intestate'), your estate will be governed by The Succession (Scotland) Act 1964, which sets out the entitlements of the surviving spouse or civil partner, descendants and other members of the family and these differ from many people's misconceptions, for example that 'my partner will get everything anyway, so why should I make a Will?'
The spouse or civil partner is entitled to a "relevant interest" in a house but only up to the value of £300,000. Any value beyond that figure is not part of the entitlement. If the estate comprises two or more properties, the surviving spouse or civil partner must elect within six months of the death in which of
them he or she is going to take the entitlement.
They have a further entitlement in the "furniture and plenishings" of a house up to the value of £24,000 - so if you have even a few antiques, works of art or paintings, that limit will soon be reached. The Act provides that where the intestate estate comprises the furniture and plenishings of two or more such dwellinghouses, the surviving spouse or civil partner must once again make an election within six months.
However, we do not live in a society where marriage is a foregone conclusion for couples who live together. The myth of the "common law marriage" still leads many to believe they will be treated just like a spouse or civil partner if their loved one dies. While the Family Law (Scotland) Act 2006 has improved the situation for "surviving cohabitants" (i.e. partner) somewhat, there remain some simple steps all such couples should consider to properly secure their financial future.
One of the main reforms introduced by the new law, which came into force last May, set out the rights of a surviving cohabitant, whose partner dies without making a Will. Before 4 May 2006, those who were not in a marriage or civil partnership had no automatic right to inherit any of their partner's assets - including the shared home.
Under the new law, in the absence of a Will, a cohabitant can apply to the court to claim a share of the deceased partner's estate. If successful, they may receive money, or a transfer of property from the estate.
However, this decision is entirely in the hands of the court, which will take a number of factors into consideration. These include the size and nature of the deceased's estate and any other benefit received by the survivor, such as pension schemes and life policies. The claim of a partner will also be weighed against other claims to the estate, including those of children and other relatives.
An important point to note in such a situation is that you can only receive capital or property from the estate after any surviving spouse or civil partner has received the share to which they are entitled. In addition, if the deceased was still married or had a civil partner when they died, the rights of the surviving spouse or civil partner would take priority. In such situations, the estate has often been exhausted by the time it comes to calculating the cohabitant's share, leaving them with nothing.
Even where this is not the case, the court is not permitted to award you more than you would have received if you had been a spouse or civil partner of the deceased.
Anyone wishing to make a claim of this kind to the court must apply within six months of their partner's death. This six month time limit means acting quickly at what will be an emotionally difficult time. The family of the deceased can also oppose such an application, which may result in the court process becoming protracted and expensive.
Therefore, although surviving cohabitants now have the opportunity to inherit, there are certain limits to these rights and the process is far from simple.
It is also worth reiterating that a claim can only be made when your partner has died without a Will. If a Will exists, the entire estate will be distributed according to its terms, even if you are not provided for.
The best advice for everyone is to make arrangements now. By making a Will - or ensuring any existing Will is up-to-date - the costly and stressful procedures or court processes can be avoided entirely. As unromantic as all this may seem, without this simple document, you risk leaving the one you love less than you intended, or with nothing at all, after you are gone.
To find out more, contact Maclay Murray Spens
t 0141 248 5011
www.mms.co.uk
THE MYTH OF THE "COMMON LAW MARRIAGE" STILL LEADS MANY TO BELIEVE THEY WILL BE TREATED JUST LIKE A SPOUSE OR CIVIL PARTNER IF THEIR LOVED ONE DIES.
The spouse or civil partner is entitled to a "relevant interest" in a house but only up to the value of £300,000.
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