Inheritance and Legal Rights SCOTS LAW

[C0NNIE]

This is a question about Scots Law

Id be grateful for any information on this general question. I understand it’s not legal advice.

John has been married to Janet for 20 years, they have three high school aged kids. John leaves his wife for Emma, his affair partner, and divorces Janet.

John was able to conceal his assets in the divorce ( he has a very smart accountant ) so he ends up with £4M of the matrimonial assets of £5M.

A few months after the divorce, he marries Emma and makes a will in her favour, which leaves her everything.

A year later, John dies. His children anticipate some inheritance through their legal rights, but they discover that his estate is as follows;

£1M in property ( his share of the £2M matrimonial home owned with his wife Emma )
£0.5M in a trust in favour of Emma’s adult children ( not John’s children)
£1.5 M in a pension where Emma is named as the beneficiary.

Do the children ( all still in FT education ) have a chance of getting any money from their father’s estate ?

From a quick Google search, children of any age in Scotland are entitled to one third of the movable estate by law and cannot be disinherited. So basically a third of everything that isn't property or land must go to his own children. John can bequeath a trust fund to Emma's children, but that comes out of the remaining two thirds of moveable estate. The heritable property (house and land) belongs to the surviving spouse.

It's a third in total by the way, not a third each!

Moveable estate is everything that isn't property or land, so his pension fund is very much included in the valuation. Trusts are a way of keeping money out of specific pots, but the over-riding principle in Scots law is that children cannot be disinherited. So I'd say the children are entitled to one third of two million pounds to be shared between them.

You need the estate accounts and good legal advice.

And by the way, legal rights don't depend on the children's age. They are valid for 20 years of death but that clock only starts running when they hit 18. We had a legal rights issue in our family for a 60 year old.

A clarification please, what happened to the other £1 million (he got 4 in the divorce, and you only list 3). Or did he buy a £2 million house and put it in joint names with Emma?

John set up the trust fund for Emma’s children before he died. So I don’t think thats part of his estate.

I think John has no movable estate . apart from things like his share of the household effects, or perhaps a couple of thousand pounds in a joint account that he shares with Emma. No doubt that will get used up on his funeral.

How is his pension on the estate if he nominated Emma as his beneficiary? Surely that’s why people leave their pension in trust - to keep it out of his estate and so there’s no inheritance tax.

Got it in one. He leaves his half of their joint house to Emma.

The reason I mention the children’s ages is I wondered if the children have grounds to contest Johns pension nomination with the trustees of the person fund. On the basis that they were technically dependents of their father and Emma wasn’t. Also that she is other well provided for ( she has his £2M house ) and the children inherit nothing.

He's moved cash into trusts and pensions in order for Emma to be able to say 'there is no moveable estate' but this is potentially challengeable. As I say though, you need a good lawyer on this. The pension trustees won't look at any change of beneficiary, that's really not their call, no matter how old the children are.

He has had very good legal and financial advice, the only way to change this is for the children to engage very good legal and financial advice of their own.

Thanks . I wondered if the pension trustees might consider his children are dependents. Although he didn’t support them financially after he left their mother. You won’t be surprised to know that he was clever enough to avoid paying child maintenance by all the usual methods.

As the children are students they don’t have the money to pay any for legal or financial advice themselves, let alone to raise an action against the estate.

Thank you to those of you who commented.

Just to update you, the children have instructed a solicitor who says that that the will seems to be competent under the Writing Scotland Act 1995. I don’t know if it’s worth getting an opinion from counsel?

The children are devastated, especially by the news that their father provided for Emma’s children ( who are older , they are graduates with good Jobs ) and their future children but nothing for his own children.

Emma is laughing all the way to the bank with her £4M from her one year marriage. And a couple of years of adultery of course.

I wish I could tell you it’s just an example but it’s real, Janet is someone very close to me. I’m sure many people won’t feel sorry for her with her £1M, but that’s basically her house ( for her and three kids ) and her pension . She’s not wealthy.

All details changed to protect the innocent of course, amounts of £ are roughly correct.