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The Changing Nature of Estate Planning

Many people have a very pre-set idea of what it means to plan for a time when they pass away, or ‘estate planning’ to use traditional legal terminology. They will know that this will involve bringing together an index of their property that they own and setting down in their will what is to happen to this when they pass away. For most people, this fairly simple idea of estate planning is as involved as they will need to get, and as complex as their will needs to be. However, for some people, they will have more to consider and this will need to be included in the terms of their will. The issue is that the idea of a ‘modern family’ has changed significantly over the past many years. As a result, estate planning has developed to keep pace with this.

In this blog post, the team at Wilson & Fish highlight the continuing importance of estate planning and identify some different familial situations that can warrant careful attention in terms of inheritance planning.

The mechanics of modern succession law

Succession law in Scotland has only gone through minor changes in recent history, but these do not alter the underpinning framework within which estate planning is organised. Traditionally in Scotland, the law grants priority in terms of succession/ inheritance to those members of your family that are closest to you e.g. your spouse or a blood relation. The way these rights operate is as follows:

  • Prior rights are granted to your spouse – your spouse has a legal right to a share in your home, furniture and money that you leave behind;
  • Legal rights are granted to both your spouse and any children you have – your spouse and your children will be granted a share in your ‘moveable’ estate (everything other than land and buildings);
  • Your family (ranking in terms of some closest to you) with then be able to inherit what remains of your estate following satisfaction of the rights mentioned above.

These rights operate independently of any provision you make in your will. It is wise to ensure that they are observed in its terms, lest your estate could be subject to a legal challenge by your spouse/children with a view to satisfaction of their rights. The result would be that the terms of your will would be overridden, and the rights mentioned above satisfied according to a pre-established legal formula that ignores your wishes. In the knowledge of how the laws of succession work, there are certain issues that warrant careful handling when planning the organisation of your estate in your will.

Reconstituted families

It has been acknowledged by many authorities in recent years that so-called “reconstituted families” or those families that involve someone that has a previous marriage and/ or step-children are considered a normal occurrence in the UK. Notwithstanding the number of people that fall within this category, reconstituted families can present a series of challenges in terms of estate planning.

The law as it stands does not cater for any legal entitlement to your estate for step-children. If you do have step-children following entering into a second marriage, and you intend for them to benefit from your estate when you pass away, you would need to expressly provide for this in your will.

The reconstituted family presents a series of challenges in the event that there is no will. If you pass away following a second marriage without a will, your spouse will inherit your estate under the laws of intestacy – the rules that operate when someone passes away without a will. If your second spouse has a child from another marriage, and notwithstanding their caring for children you had from a previous marriage, passes away without a will then their child would inherit the entirety of their (your) estate, leaving your children with nothing. This is why it is incredibly important to ensure that step-children are included in the terms of your will that you intend them to benefit under.

The ‘other’ family members

Another common issue that comes up from time to time in modern families, while often not discussed, is that they tend to have a different kind of family member that may not necessarily be human: their pet. Historically pets are something that were often forgotten in estate planning. However a significant number of families recently recorded as being every 1 in 2 households (see here) have a pet. If you do have a pet you will need to set down some instruction as to what happens to them in their will, and who will take ownership and responsibility for them. The law in Scotland is quite crude in that it classifies household pets as property falling within your estate when you pass away. The difficulty is that, if you pass away without a will, the courts will need to decide on how best to find a home for your pet according to the laws of intestacy – a decision which may otherwise not have agreed with.

Estate planning can be a tricky process, especially if attempted without the assistance of an expert lawyer. It is impossible and undesirable to classify every family as having the same needs when it comes to estate planning: every family is different. While it is true that you should take the time to consider creating a will, you should decimate some thought to your exact needs and intentions for your property and its inheritance by your family.

Tailored assistance from expert lawyers

At Wilson & Fish, we believe in proving our clients with legal advice that is tailored to reflect their individual needs and address their unique legal issues. Our team is composed of some of the leading private client lawyers in the field, and we have vast experience in assisting clients in organising their affairs properly, regardless of the size or complexity of their holdings. If you would like to speak to our team about designing a will that reflects your own particular needs, contact us today.

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