Law of succession: consultation

Chapter 4 - Additional Matters

4.1 Temporary aliment

4.1.1 In circumstances where the deceased has owed the obligation of aliment to an eligible person, that person may be able to claim temporary aliment, payable by the deceased's executor. Such aliment is treated as an ordinary debt on the estate.

4.1.2 The Commission recommended that it "should be abolished on the basis that if the estate is clearly solvent, payments to account of the recipient's share of the estate are sufficient"^[35].

4.1.3 In the 2015 consultation the Scottish Government also asked if the right at common law to claim temporary aliment should be abolished. Forty-three per cent agreed that it should be abolished, thirty-nine per cent disagreed, and 17 per cent said that they didn't know.

4.1.4 It was pointed out that it can deal with practical cash flow difficulties that a recipient of aliment from the deceased might experience immediately after death and before the settlement and distribution of the estate. It was proposed that it should only be available up to 6 months from the date of death.

4.1.5 The Scottish Government set out in its response to the 2015 consultation that on the basis that the right has some practical utility it would not be abolished but that instead further views would be taken on the setting of a time limit.

Questions

16. Do you agree or disagree that there should be a time limit for claims for temporary aliment?

Agree/Disagree
Reasons

17. If you agree, should that time limit be 6 months?

Yes/No
Reasons

18. If you do not agree, what time limit would you suggest?

Reasons

4.2 Equitable compensation

4.2.1. In the 2015 consultation, we asked if the doctrine of equitable compensation should be abolished. We set out that Section 13 of the Succession (Scotland) Act 1964 ("the 1964 Act"), in relation to wills executed after 10 September 1964, provides that a beneficiary cannot claim a share of the deceased's estate and legal rights at the same time unless there is express provision to the contrary. Prior to the 1964 Act coming into force, a beneficiary could claim legal rights without necessarily forfeiting their legacy. In such a situation, the principle of equitable compensation was applied so compensation could be due to beneficiaries disadvantaged by a claim for legal rights being paid out of the estate.

4.2.2. It had been suggested that the case of Munro's Trustees v Munro 1971 SLT 280 cast doubt on the interpretation of section 13 and that the effect is that there may be equitable compensation for other beneficiaries adversely affected by a claim for legal rights. Professor Gretton summarised as follows:

"The doctrine of equitable compensation provides that when a testamentary provision is forfeited in order to obtain legal rights, then that provision is to be applied to compensate those persons (if any) who have been prejudiced by the claiming of legal rights."^[36]

4.2.3. The effect is that executors or testamentary trustees are required to retain the forfeited testamentary provision and to accumulate the resulting income, to provide a fund for compensation. As such, it can only operate in certain situations - where a liferent terminates otherwise on the death of the liferenter and the fee does not vest at that point and in relation to annuities or similar arrangements.

4.2.4. Fifty per cent of those who responded agreed that it should be abolished, nine per cent disagreed and 41 per cent said that they didn't know. The doctrine was described as 'ill understood'. It was suggested it would benefit from further research. Those who disagreed suggested that the doctrine still served a purpose and should therefore not be abolished. Since the consultation, section 7 of the Succession (Scotland) Act 2016 now provides that where a liferent terminates early, the fee should vest at that point. This should have the effect of reducing the application of the doctrine of equitable compensation.

4.2.5 In light of the fact that whatever mischief arose from the continued existence of the doctrine has now been largely removed we do not intend to legislate in this area

Question

19. Do you agree that the implementation of section 7 of the Succession (Scotland) Act 2016 has reduced the potential application of the doctrine of equitable compensation to the extent that no further change is required?

Yes/No
Reasons

4.3 Executors

4.3.1 An executor is responsible for ingathering the property of the deceased and then distributing it to the beneficiaries. If an executor is appointed in the will they are an executor-nominate but if there is no will the court may appoint an executor known as an executor-dative. The function of the executor is to represent the deceased and is fiduciary in nature - an ethical relationship of trust.

4.3.2 Currie on Confirmation^[37] states that "if a person who has been convicted of killing the deceased has been appointed executor-nominate, he will be entitled to act, though it will often be more appropriate for him to resign office". By way of example the case Hunters Executors, Petitioners^[38] is cited where the deceased's husband was convicted of her murder but the husband declined the office of trustee and executor nominate.

4.3.3 Since the Scottish Government last consulted on succession law reform, it has been made aware of a situation where a convicted murderer was named in their victim's will as executor.. The case with the distress to the family has been well documented in the press and is also the subject of a Change.Org petition entitled 'Remove/Prevent convicted Murderers from being Executors of the person they murdered [sic] estate'.

4.3.4 Whilst this is an unusual occurrence the Scottish Government in response to a Parliamentary Question about the matter undertook to consult on whether or not such a person should be able to act as executor in these circumstances. Whilst it is currently possible to apply to the court to have an executor removed in certain circumstances, this could delay the winding up of an estate and has a cost. Under Scots law a murderer cannot inherit from their victims' estate.

4.3.5 The Scottish Government met with the family concerned in this case and they were able to describe the personal toll that the lack of closure on the matter of the will had taken on their health, wellbeing, family life and finances. They are very keen that others, in what is already an extremely tragic circumstance, should not have to undergo a similar experience. The family considered applying to the court to have the executor removed but the costs involved proved to be prohibitive. At the time of writing and some 3 years after the executor was convicted for the murder and 4 years after the murder itself, confirmation to the estate has not been completed.

4.3.6 In practical terms and given the likely time lapse between a date of death and any conviction it may be necessary, so that confirmation is not delayed, to disqualify someone who has been charged with the murder or culpable homicide of their benefactor. Consideration could be given to the appointment of a judicial factor, on an interim business or otherwise, until such time as a conviction is confirmed.

Questions

20. Should a convicted murderer be allowed to be executor to their victim's estate?

Yes/No
Reasons

21. Should someone convicted of culpable homicide be allowed to be executor to their victim's estate?

Yes/No
Reasons

22. Should conviction automatically prevent/disqualify someone convicted of either murder or culpable homicide from acting as an executor on their victim's estate?

Yes/No
Reasons

23. Should a conviction for any type of crime which results in imprisonment automatically disqualify an executor from acting?

Yes/No

Reasons

24. Do you agree that someone who has been charged with the murder or culpable homicide of their benefactor should be disqualified from becoming the executor until the outcome of a trial determines whether or not the disqualified executor is guilty or innocent?

Yes/No
Reasons

25. If you agree, should consideration be given to the appointment of a judicial factor, on an interim business or otherwise, until such time as a conviction is confirmed?

Yes/No
Reasons

4.4 Non-disclosure of sensitive information in a grant of confirmation

4.4.1 Another issue which has been raised through correspondence with the Scottish Government is a concern that once confirmation on an estate has been granted to an executor, the Inventory of the estate which accompanied the application for confirmation is publicly available. The concern being that the inventory may contain information which may compromise the security of joint accounts which the survivor may wish to continue operating

4.4.2 A view was sought from the Scottish Courts and Tribunal Service (SCTS) and they confirmed that they had also been made aware of concerns being raised in relation to this issue and more generally about what information is publically available.

4.4.3 More specifically, the SCTS are aware of concerns being raised by some executors about the disclosure of personal details such as bank account numbers etc. in an inventory of the person's estate - whilst these personal details related to a deceased person(and any joint account holder), there is a concern that the release of such information into the public domain together with the executor's own details could potentially lead to a fraud being attempted.

4.4.4 The SCTS also considered that there is some concern from executors about any of their personal details being shared in the public domain too, and a potential issue about the extent to which personal bequests in wills should really be in the public domain and how that plays with privacy rights.

4.4.5 The Scottish Government shares the view of SCTS that these concerns would benefit from further consideration and consultation.

4.4.6 Taken from Currie on Confirmation of Executors^[39] an example of the information which should be included in the Inventory (and therefore placed in the public domain following confirmation) is set out below.

Bank and building society accounts

10-159

If these are to be treated as estate in Scotland, they must be specified as being at a Scottish branch, for instance:

Item No.	Description	Price of shares	£
2.	Barclays Bank plc, Aberdeen Branch
	Current account Number…		£x

Any interest accrued to the date of death should be shown (see paras 10-72-10-74). With the exception of an ISA (Individual Savings Account), where the interest accrued on the account to the date of death is quoted gross, income tax at the basic rate for the tax year in which the death occurred should be deducted:

Item No.	Description		Price of shares	£
3.	Lloyds TSB plc, West End, Aberdeen Branch
	Deposit account Number …	£10,000.00
	Add: Interest accrued to date of death (gross)	£60.00
	Less: Basic rate tax thereon at 20%	(£12.00)		£10,048.00

4.4.7 The contents of a will can of course be a rich seam of information for researchers, historians or genealogists - they provide information about family relationships and about how people lived. The Inventory sets out an overall valuation of the deceased person's possessions and can be very detailed with the value of every item listed. Such items might include furniture, clothes, jewellery, books, papers, livestock, farm equipment, cash and investments.

4.4.8 A paper in the Cambridge Law Journal^[40] examined the legal rule enabling the contents of a will to be available for inspection by any member of the public, albeit in the context of the system of probate which operates in England and Wales. The author highlights the positive of such access as being the potential to alert beneficiaries to the existence of the estate. They conclude however that such access is 'disproportionately wide' when balanced against the 'legitimate ends served by disclosure'.

4.4.9 Whilst views will vary on whether public access to the level of detail contained in the Inventory is warranted and whether public access serves a purpose beyond a general social interest, there are legitimate concerns about whether the detail available around bank accounts which may still be open and the personal details of the executors could lead to concerns about fraudulent activity, or has the potential to compromise individuals.

Questions

26. Are you aware of any difficulties which have been encountered as a consequence of public access to the details provided in an Inventory?

Yes/No
Reasons

27. Does the current process of making the Inventory (and all the attendant information contained therein including bank account details) publicly available have the potential to create difficulties for beneficiaries, executors, the deceased's family or other individuals?

Yes/No
Reasons

28. Do you agree that information which may compromise the security of joint accounts/assets for the survivor should be redacted?

Yes/No
Reasons

29. What sort of information contained in the Inventory should not be publicly available?

Reasons

30. Should it be possible to redact information from the inventory of an estate which may compromise the security of another individual's assets?

Yes/No

Reasons

31. Would delaying the public availability of inventories for a year provide the necessary protections for individuals for whom the security of their assets may be compromised?

Yes/No
Reasons

32. Is there another means of providing the necessary protections to individuals who may be compromised?

Yes/No
Reasons

33. Should personal details of a beneficiary in wills be in the public domain?

Yes/No
Reasons

34. Should it be possible to redact personal details of a beneficiary from a will?

Yes/No
Reasons

35. Would delaying the public availability of a will for a year address concerns about sharing personal details of a beneficiary?

Yes/No
Reasons

4.5 Small Estates Limit

4.5.1 The Confirmation to Small Estates (Scotland) Act 1979 allows an executor to obtain confirmation by simplified court procedures in cases where the value of an estate is below a specified level. Within these procedures, the sheriff clerk is required to prepare the inventory, the declaration and do all that is necessary for confirmation. There is normally no need for the applicant to obtain the services of a solicitor and where there is no will, the executor dative requirement to obtain a bond of caution (indemnity insurance) has been removed.

4.5.2 The amounts are updated periodically. The current limit of £36,000 was set in 2011 replacing the limit of £30,000 set in 2005. In 2011, the small estates limit was set by reference to the increase in average nominal income between 2004 and 2009 which took account of both the inflationary price increases, and also the changes in the standard of living from economic growth - allowing the relative lifestyle to be maintained across time. The limits were then rounded to the nearest £1k.

4.5.3 The exercise usually includes the uprating of intestacy prior rights limits. We do not plan to uprate the prior rights limits at present until we are clear how and when substantive succession reforms might be taken forward after this consultation but in the meantime we are minded to review the 'small estates' limits.

Question

36. Do you agree that it would now be appropriate to review the 'small estates' limit?

Yes/No
Reasons

4.6 Executors, beneficiaries and timeshare contracts

4.6.1 From time to time the Scottish Government receives correspondence about the apparently perpetual nature of some timeshare contracts, or the absence of clauses in contracts covering the circumstances under which consumers might bring the agreement to an end.

4.6.2 We are aware that a significant number of these contracts were agreed before the coming into force of the Timeshare Act 1992 or the former Timeshare Directive which applied.

4.6.3 In 2011 new Timeshare, Holiday Products, Resale and Exchange Regulations 2010 came into force to give effect in the UK to a new European Directive. This provides improved protections for consumers buying and selling timeshares and other long-term "holiday club" memberships including provision for consumers to withdraw from the contract. This legislation can be found at http://www.legislation.gov.uk/uksi/2010/2960/pdfs/uksi_20102960_en.pdf.

4.6.4 Whilst consumer issues are reserved to the UK Parliament, the law of succession is devolved.

4.6.5 In view of the concerns, we are seeking information about how frequently these types of timeshare contracts in perpetuity arise and create difficulties for executors administering the estates of which they form part. Beneficiaries can of course refuse to accept a bequest hence we assume that this is most likely to be an issue for executors. We would also be interested in what solutions are possible in these situations.

Questions

37. How many executry cases are you are aware of where there has been a difficulty created by a timeshare contract in perpetuity?

38. What are the issues in these cases for beneficiaries?

39. What are the issues in these cases for Executors?

40. What are the solutions?

41. Are there similar contracts in other areas which create difficulties for executors and beneficiaries?