In Scotland, the only way for cohabiting couples to obtain a share of each other's estate when one of them dies where there is no Will, is to apply to the court for a discretionary financial award. There are strict requirements to be met: the couple must have been living together as if they were husband and wife (or as if they were civil partners or same sex spouses), and the deceased must have been domiciled in Scotland at the time of their death. Crucially, though, the claim must be made within six months of the date of death. The court has no power to extend this cut-off.
If the court is satisfied that all of these requirements have been met, they can make an award of a capital sum to the surviving partner. The court has total discretion over what this award should be, but it must not exceed the amount the surviving partner would have been entitled to had the couple been married/in a civil partnership. In practice, though, any sum awarded may be much less than the sum a spouse/civil partner would have been entitled to.
There are many reasons why cohabiting couples would wish to avoid this situation. Firstly, to receive any award they must apply to the court. Court actions are expensive, time-consuming and stressful at the best of times. Raising a court action less than six months after the death of a partner could feel extremely difficult.
Secondly, and importantly, the six-month deadline for lodging a claim is absolute. This strict time limit is not widely appreciated, so many surviving partners are unaware of the need to think about raising a claim very quickly after their partner's death to avoid losing their entitlement to a share of the estate.
Depending on how things have been structured, there may be assets which will pass direct to the surviving cohabiting partner outwith the estate. This only includes property in limited circumstances and depends on how the title to any jointly owned property is held. It is therefore crucial to take advice to ensure you are completely clear on who would receive what at the end of the day.
The other point to bear in mind is that while the tax legislation allows for assets to pass between spouses and civil partners completely free of inheritance tax in life and on death, this is not the case for co-habiting couples and, depending on the value of the estate (and any other assets which may be subject to tax), there may well be an inheritance tax charge which arises on the death of the first partner.
It is important to remember that the succession rules outlined above only apply where a deceased person doesn't have a Will. If they have a valid Will, then their estate will be distributed in accordance with its provisions (with only spouses/civil partners and children having additional succession rights where there is a Will in place). It is therefore crucial for cohabiting couples to have Wills in place if they wish their partner to benefit from their estate on their death. Conversely, if they don't want each other to benefit, having a Will specifying this removes their partner's right to claim a share of their estate.
If you would like some advice about succession rights, please contact us on the details below.