Cohabitation Right to Claim Part 2
Scots Law has long recognised the right of a Spouse (and, more recently, a civil partner) to a share of his or her predeceasing spouse’s or civil partner’s estate. Now, as a result of The Family Law (Scotland) Act 2006, non-married and non-civilly enpartnered co-habitees have, in certain circumstances, a right to claim from the estate.
The opportunity to claim on a deceased partner’s estate, within six months of the date of death, is only available where the partner died without leaving a Will, and immediately before the death, he or she was domiciled in Scotland.
Assuming that co-habitation is found to have existed in the eyes of the Court, what can be claimed, and what can the Court award? Subject to one limitation, the amount of the award is left very much to the Court’s discretion.
The overriding limitation is that a claimant can never receive more than the amount to which a surviving spouse or civil partner would have been entitled.
The current level of the various Prior Rights of a surviving spouse on intestacy is such that many estates are entirely taken up by those Prior Rights, and so it is possible that a surviving cohabitant could receive most or all of the estate, if the estate were modest.
The maximum amount to which a surviving spouse or civil partner could have been entitled will vary, depending on whether or not the deceased had children, and to some extent on the nature and composition of the estate, but can readily be calculated when these facts are known.
The award can only be met out of the deceased’s net estate. That means the estate after payment of (a) inheritance tax, if any; (b) debts and funeral expenses; and© the Prior and Legal Rights of any surviving spouse or civil partner of the deceased. This last point will be significant in cases where the deceased was separated, but not divorced, or was civilly enpartnered, at the time of his or her death.
The cohabitant can therefore never trump the surviving spouse or civil partner, at least to the extent of that spouse’s or civil partner’s Prior and Legal Rights.
The award to the surviving cohabitant may however take precedence over the Legal Rights of the deceased’s children and any residuary entitlements, whether of a surviving spouse or civil partner, children of the deceased, or other relatives. The Legal Rights of children will only be capable of calculation after the amount of any award to a surviving cohabitant has been determined, and by reference to the estate net of that award.
In considering what to award, the Court is required to take into account:
- the size and nature of the deceased’s intestate estate;
- any benefit which the surviving partner has received, or will receive, as a result of the death, from somewhere other than the deceased’s net intestate estate – e.g. the proceeds of a life assurance policy; pension scheme death benefits; etc.;
- the nature and extent of any other rights against, or claims on, the deceased’s net intestate estate – e.g. children’s Legal Rights; and
- any other matter which the Court considers appropriate!
The guidance leaves the Court an extremely wide discretion. This is deliberate, and necessary, to enable the Court to address the wide range of different ways in which contemporary domestic relationships are organised, but makes it difficult for solicitors to advise as to what a claimant is likely to be awarded. Such advice will be important, not simply to claimants, but also to the deceased’s Executor, and to other heirs.
Eventually, decided cases will produce clearer guidance as to how the Courts are interpreting and applying their wide discretion, however this may take some time.
The existence of these new rights means that the administration of many intestate estates will be delayed, certainly for months, possibly years, while it is determined whether or not a cohabitant’s claim is available and any such claim is pursued through the courts. Executors will need to make suitable enquiries regarding any relationship in which the deceased was involved when he or she died, and should not distribute any of the estate before the six month period within which claims can be made has elapsed.
While these new rights are welcome, as bringing the law more into line with public perceptions of fairness in our now more variously organised domestic relationships, they are capable of creating uncertainty and delay at a time of bereavement. They should not be regarded as any substitute for a suitable Will and/or Cohabitation Agreement. It is always better to determine for oneself what will happen to one’s estate after death, rather than to leave that to the discretion of courts in perhaps contested court proceedings after the event!
If any of these issues affect you, please seek independent professional advice.
Article compiled by Pamela Niven
Posted by Sharon Clift on May 06, 2008
