Who gets my stuff when I die? – Urban myths explored
Who gets my stuff when I die? – Urban myths explored
Taking things for granted – it’s easily done. We read the press and listen to horror stories but do you REALLY know what will happen to you property, assets, savings, children, pets…the list goes on…Are you and your family truly protected?
Most of us with families are too busy to give a second thought as to how our affairs would be handled if something unexpected happened. Assumptions are often made about how the law would deal with your family and assets, and these assumptions are not always correct. Two questions are particularly common:
- 1) Do you really need to have a Will?
- 2) What rights does cohabiting give you?
We explore some urban myths…
Wills
Urban myth: My spouse (or civil partner) will always get everything if I die.
Reality: This is not guaranteed. Scottish succession laws will state where your estate passes when you die without a Will. If you have children, parents or siblings who survive you then your spouse/civil partner will only receive a certain proportion, and the rest will fall to these other beneficiaries. You can appreciate the difficulties this may bring in a modern family situation, especially where there are older children and a second or third spouse! A Will ensures that your other half is provided for.
Urban myth: My step-children will be treated as if they were my own children.
Reality: If you don’t have a Will, only your biological or adopted children are entitled to receive a share of your estate. These legal rights do not apply to step-children and it is only by providing for them in your Will that they will benefit.
Urban myth: The family will look after my children on my death.
Reality: If your spouse (who is the parent of your children) survives you then they will automatically be legal guardian of any children you had together. However an unmarried father will not automatically become the child's guardian unless the mother has appointed him. Also if both parents have died, then there may be doubt or friction between the families as to who should look after the children. For your own peace of mind it is best to have a Will appointing a guardian.
Urban myth: Any money that passes to my children will be looked after for them until they are “old enough”.
Reality: Without a Will (which would include a trust), any child benefitting from your estate will receive their share outright once the law considers them to be an adult. This means that at age 16 your children will have “free reign” over what they inherit. Can you really picture your 16 year old being in control of thousands of pounds? It also means that, for those under 16, the guardian alone will have control over their share until they reach 16. Putting a Will in place allows you to provide that any of your estate falling to a young beneficiary will be held in a trust, with the trustees looking their interests in line with your wishes. Only when they have reached an age that you feel comfortable with will the estate become theirs absolutely.
Urban myth: My family will just deal with everything, without the need to involve anyone else.
Reality: The individuals who you expect to deal with your affairs on your death will not be able to do so until they are appointed as executors in your estate. Without a Will in place appointing these executors, a petition needs to be made to the court, involving additional delay and costs which will be met from your estate. Your family may not agree on who the best person to do this is.
As you can see, by putting a Will in place you can ensure your estate will be distributed as you intend it to be, and will also save your family from additional stress and paperwork at a difficult and upsetting time.
Cohabitation
Many unmarried couples who live together feel their relationship is akin to marriage, especially if they have been together a long time. However, contrary to popular belief there is no such thing in Scotland as “common law marriage”. The following assumptions are often made, but they do not reflect the true legal position:
Urban myth: If I separate from my partner, I have the right to continue to live in our home.
Reality: If you own your home with your partner, then yes you have a right to continue living there following your separation. However, if your partner alone owns the home you live in then, unlike married couples, you do not automatically have occupancy rights, even if you have children. You can apply to the Sheriff Court to have occupancy rights granted to you.
Urban myth: If I separate from my partner, I am entitled to claim financial support from them.
Reality: Whilst spouses/civil partners have a mutual obligation of financial support, no such obligation exists for cohabitants. On separation, it will be open to either of you to apply to the Sheriff Court (within one year of the termination of the relationship) for financial support from the other in the form of a lump sum payment (but not an ongoing allowance). You can only make this application if you can show that you were financially disadvantaged by the relationship, whilst your partner gained an economic advantage.
These issues can be addressed by a cohabitant agreement setting out your intentions in the event of you and your partner separating.
Urban myth: If my partner dies without a Will then I will receive their whole estate.
Reality: If you are living with your partner but are unmarried then you have no automatic rights to their estate on death. In these circumstances, you can make a claim on your partner’s estate by application to the court within six months of their death. However, certain criteria must be satisfied and such claims may compete with other claims on your partner’s estate. Further, the level of benefit you will receive is uncertain, and you will not do any better than a spouse/civil partner would have done. The only way for your partner to know that they have provided for you on their death is to prepare a Will. Although, if they are still married, they will need to remember that their estranged spouse can make a claim on their estate.
Urban myth: I will automatically receive my partner's pension and death in service life assurance on their death.
Reality: This will only happen if your partner has nominated for their pension or death in service life assurance to pass to you. However, if they have not put a nomination in place, the pension trustees will want details of surviving family members to allow them to decide who the benefits should be paid to. As an unmarried partner effectively competing with family members, it is not certain that the benefits will be made over to you. A nomination form should therefore always be in place for peace of mind. When your family circumstance change you should always amend your nomination if needed.
The law has tried to give cohabitants some rights in the last few years to recognise that a significant number of people are cohabiting. These rights are, however, limited. Whatever your family circumstances, where you have dependants who you feel responsible for, the sound advice is to get your affairs in order and plan ahead for the future whatever life may throw at you. What you need may actually be quite simple and you will then have the peace of mind of knowing that you and your family are protected.
Morton Fraser has an expert team who can help you with any aspect of making a Will. It’s often easier than people think. You do not need to know all the answers – simply discuss your current circumstances with a lawyer and they will look at your situation and provide options for consideration, where you need to make decisions.
If you would like any further advice on the any of the above points then please contact Sarah McKinlay, Partner in the Private Client Division at Morton Fraser on sarah.mckinlay@morton-fraser.com or 0131 247 3150.
