THE LAW on succession in Scotland is about to change, writes John McArthur
To tell people that I write wills for a living is often met by a barely stifled yawn. Mention tax and the eyes cloud over, but wills and their consequences for families and taxation continue to be a matter of great fascination, drama and contention. It doesn’t take too long to convince even the most sceptical that a well-constructed will can save a small fortune in tax and other costs.
If you want your intentions to be carried out without causing any drama, it is wise to plan ahead sensibly and take cognisance of upcoming changes in legislation.
Poet Ted Hughes has been accused of dire cruelty by cutting his children from his will. His former wife, however, disagrees. Writing to the Times in defence of the accusations arising from a new biography, she wrote that the action was taken to protect them. The poet trusted her to ensure the children received their inheritance fairly, which they did.
The latest highly public controversy over a will is taking place in Los Angeles, where the death of Sam Simon, one of the creators of The Simpsons, has triggered a row over a $140,000 yearly legacy for the upkeep of Columbo, a rescue dog whose trainer says he requires £2,400 a month for acupuncture as well as training, grooming, a gluten-free diet and his own enclosure.
In the UK, we’ve just had the extraordinary case of a child omitted from her mother’s will awarded a £164,000 inheritance in what could prove to be a landmark ruling. Heather Ilott went to court after her mother Melita Jackson left her £486,000 estate to animal charities when she died in 2004. The Court of Appeal has ruled she should receive a third of the estate.
That could not have happened had Mrs Ilott died in Scotland as her daughter could have claimed her legal rights to a one-half share of her moveable estate.
As a solicitor who has acted for clients in more contentious executries than I care to remember, the Scottish system of legal rights has much to commend it – simplicity, certainty (mostly!) but with the odd quirk to keep one on one’s toes. Yes, misunderstandings do occur, disagreements happen, and huge legal battles can take place, but with careful planning and preparation these can be largely avoided.
Making a well-drafted, constructed and thought-through will is the best way to ensure your wishes are carried out. Keeping it up to date and choosing executors wisely are crucial aspects.
It is also important to think about children, appointment of guardians, legacies and whether you protect assets with a trust. Equally, having a will which complements the tax system and uses the correct type of trust assists the beneficiaries at a trying time of life.
The consultation period on part of the latest proposed changes on the Scots Law of succession has just finished, the crux of which relates to how much the state trusts its citizens who choose to write a will to decide what is best with regard to who inherits their estate.
In my experience the vast majority of parents want to do what is best for their children. Problems arise when one child has been immensely successful and other children have not, where one child has borne the burden of care for a parent, where there is a disabled child or where there is a business which would be unviable if taken over by more than one child as it could not produce sufficient income to maintain the workforce and the owner. Generally these can be addressed by a family discussion to avoid surprises when a parent dies. But what if the law then prevents these being implemented?
That is the danger we face in Scotland if our government sets the “legal share” a child can claim too high. The review of our succession system is long overdue as is the review of trust law. Succession and trusts go hand in hand, partly because of tax but primarily because a well drafted will has to consider how a young or disabled child’s share of an estate is looked after until they reach a suitable age to inherit.
• John McArthur is head of tax at Gillespie Macandrew www.gillespiemacandrew.co.uk