During the festive period, you may spend time with family and loved ones that you don’t often see throughout the year. This can provide a valuable opportunity to have important discussions regarding personal affairs with those closest to you.
We understand these conversations can be difficult and not necessarily in keeping with the festive atmosphere, but it is important that your family is aware and understands your wishes should the unexpected happen. It is also key to plan ahead in order to protect your family should you fall ill or no longer be around.
By having, sometimes difficult, discussions with family and friends about your wishes, and putting arrangements in place, you can ultimately ease the burden on them, prevent any unnecessary additional upset and distress, as well as ensuring your wishes are followed.
Wills and Succession Planning
In Scotland there are few limits on testamentary freedom, which means you can essentially distribute your assets as you wish – although many people will be aware that legally you cannot disinherit your spouse/civil partner or your children. However, what you may not be aware of is the way in which the law will determine the division of your assets if someone dies without a Will, and of the very limited succession rights for unmarried couples.
Where a person dies without a Will in Scotland, the law provides for their spouse or civil partner to inherit certain elements of their estate, but in many instances, this does not mean they will inherit all their assets. Ahead of a spouse/civil partner the balance will pass firstly to children, parents, siblings and even nieces or nephews.
A person who jointly owns property with their partner, to whom they are not married, should be aware that in the absence of a Will, the law does not ensure they inherit their partner’s share of that property automatically on death. In fact, the unmarried partner has no legal entitlement whatsoever to automatically inherit anything from their partner – they can however be provided for by putting in place a Will which sets this out.
Children have automatic legal rights to inherit from their parents regardless of their age. A Will, however, can provide for a child’s inheritance to be held in Trust and looked after for them until they are able to manage their money for themselves, otherwise assets will be given to them at age 16 without any protective provisions.
The law does not take into account stepchildren, who have no legal rights in the estate of a stepparent. However, leaving assets to stepchildren by a Will (where someone has no natural children) can allow for additional Inheritance Tax allowances to be claimed.
Beyond the distressing stories of unintended consequences that can arise in the absence of a well drafted and up to date Will, a Will is also the best way of recording your wishes for example, of who you would like to act as guardians for your young children.
If you have a business, it is important to consider how this will operate should something happen to you. A farmer, for example, will need to work out who will look after their livestock, who should inherit their tenancy, as well as a number of other things. Many of these matters require to be addressed in accordance with strict timescales after death.
Powers of Attorney
If for some reason you become incapacitated, even temporarily, no members of your family have legal authority to make decisions for you. The simple solution is to grant a Power of Attorney when you have capacity to do so. This is a relatively inexpensive document to put in place and allows you to give powers to those you wish to make decisions for you. The alternative is a potentially lengthy and expensive Court process, which may ultimately result in someone you may not have chosen having power to make decisions for you.
We understand these may not be discussions you would perhaps plan to have during the festivities, but with families getting together now may just be the time to have those difficult conversations with your parents, your partner, your children and your friends, to provide peace of mind that you have planned ahead and protected those closest to you.
*This article originally featured in The Scotsman on 19 December 2022