Discussion Paper on Succession August 2007 DISCUSSION PAPER No 136 This Discussion Paper is published for comment and criticism and does not represent the final views of the Scottish Law Commission. EDINBURGH: The Stationery Office £25.00 NOTES 1. 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Telephone enquiries about Click-Use Licences should be made to OPSI, Tel: 01603 621000. ISBN: 978-0-10-888202-9 ii The Scottish Law Commission was set up by section 2 of the Law Commissions Act 19651 for the purpose of promoting the reform of the law of Scotland. The Commissioners are: The Honourable Lord Drummond Young, Chairman Professor George L Gretton Professor Gerard Maher, QC Professor Joseph M Thomson Mr Colin J Tyre, QC. The Chief Executive of the Commission is Mr Michael Lugton. Its offices are at 140 Causewayside, Edinburgh EH9 1PR. The Commission would be grateful if comments on this Discussion Paper were submitted by 31 December 2007. Please ensure that, prior to submitting your comments, you read notes 1-3 on the facing page. Comments may be made on all or any of the matters raised in the paper. All non-electronic correspondence should be addressed to: Dr David Nichols Scottish Law Commission 140 Causewayside Edinburgh EH9 1PR Tel: 0131 668 2131 1 Amended by the Scotland Act 1998 (Consequential Modifications) (No 2) Order 1999 (SI 1999/1820). iii Contents Paragraph Page Abbreviations viii Part 1 INTRODUCTION Background 1.1 1 Advisory group 1.5 2 Outline of the discussion paper 1.6 3 Legislative competence 1.14 5 Part 2 INTESTATE SUCCESSION Overview 2.1 6 A: SURVIVING SPOUSE OR CIVIL PARTNER AND OTHER RELATIVES The pre-1964 position 2.6 7 The current position 2.8 8 Prior rights 2.9 8 Legal rights 2.13 9 Free estate 2.15 9 1). Deceased survived by a spouse or civil partner but not by issue 2.17 10 Proposals for reform 2.18 12 2). Deceased survived by a spouse or civil partner and by issue 2.27 14 Options for reform 2.33 16 All to surviving spouse or civil partner 2.33 16 Liferent to surviving spouse or civil partner, fee to issue 2.40 19 The Dutch system 2.41 19 Sharing the estate between spouse or civil partner and issue 2.46 20 Proposals for reform 2.49 21 B: SEPARATED SPOUSES OR CIVIL PARTNERS The present position 2.58 25 Options for reform 2.61 26 C: SPOUSE OR CIVIL PARTNER NOT PARENT OF ALL THE CHILDREN The present position in Scotland and some other jurisdictions 2.65 27 Options for reform 2.68 28 D: STEPCHILDREN AND ACCEPTED CHILDREN The current law in Scotland 2.71 29 Should it be changed? 2.73 30 E: EFFECT OF TESTAMENTARY PROVISIONS ON INTESTATE SHARES The present position in Scotland and some other jurisdictions 2.81 32 iv Contents (cont'd) Paragraph Page Proposals for reform 2.83 32 F: OUR 1990 RECOMMENDATIONS 2.87 34 Part 3 PROTECTION FROM DISINHERITANCE Introduction 3.1 36 A: SURVEY OF CURRENT SCHEMES The present position in Scotland 3.4 37 Defects of existing Scottish legal rights 3.11 39 Other jurisdictions 3.15 40 Court-based 3.15 40 Rule-based 3.27 43 The schemes compared 3.33 45 B: PROPOSALS FOR REFORM Preliminary 3.35 46 1). Surviving spouses and civil partners 3.37 46 Fixed share or discretionary award? 3.38 47 The amount of the legal share 3.41 47 Renunciation of the legal share 3.49 51 Entitlement to aliment 3.53 51 The former matrimonial or family home 3.56 52 2). Cohabiting partners 3.58 52 Overview 3.58 52 Proposals for reform 3.63 54 Entitlement to aliment 3.76 59 3). Children and issue of the deceased 3.78 60 An alimentary scheme for dependent children 3.80 60 Fixed shares for children 3.92 65 Should adult children have a claim? 3.94 65 Legal protection for all children 3.102 68 Court-based discretionary system 3.103 68 Fixed legal share 3.104 69 Accepted children 3.111 73 Grandchildren 3.113 74 4). Other relatives and other persons 3.114 74 C: EXCLUDING CERTAIN KINDS OF PROPERTY FROM LEGAL SHARE 3.120 76 v Contents (cont'd) Paragraph Page Part 4 MISCELLANEOUS Overview 4.1 78 A: ANTI-AVOIDANCE PROVISIONS AND COLLATION Introduction 4.2 78 1). Anti-avoidance provisions 4.3 78 The current position in Scotland 4.3 78 Should anti-avoidance provisions be introduced? 4.5 79 General 4.5 79 Arguments in favour of anti-avoidance provisions 4.10 80 Arguments against anti-avoidance provisions 4.14 80 Form of anti-avoidance scheme if introduced 4.17 81 Possible refinements 4.24 83 2). Collation inter liberos 4.25 83 The present law 4.25 83 Proposals for reform 4.29 85 B: TIME LIMITS The present law 4.36 87 Proposals for reform 4.45 90 C: PRIVATE INTERNATIONAL LAW Introduction 4.50 91 1). Jurisdiction 4.54 92 The general rules 4.54 92 Cohabiting partners 4.65 96 Dependent children 4.70 98 2). Choice of law and renvoi 4.75 99 General 4.75 99 Intestate succession 4.80 100 Spouses, civil partners and children 4.80 100 Cohabiting partners 4.87 103 Protection from disinheritance 4.90 104 Spouses, civil partners and children 4.90 104 Cohabiting partners 4.100 106 3). Anti-avoidance provisions 4.101 107 Jurisdiction 4.102 107 Choice of law 4.105 107 D: EXECUTORS AND BONDS OF CAUTION Introduction 4.107 108 1). Bonds of caution 4.113 109 The current position in Scotland and other jurisdictions 4.113 109 Should caution be abolished? 4.116 110 Should caution be retained for some cases only? 4.119 112 Caution for executors-nominate? 4.124 114 vi Contents (cont'd) Paragraph Page Civil partners 4.128 115 2). Refusal to appoint or confirm executors 4.130 115 Executors-dative 4.131 116 Refusal to confirm executors 4.135 117 Part 5 LIST OF PROPOSALS AND QUESTIONS 119 APPENDIX A OTHER JURISDICTIONS 127 APPENDIX B ADVISORY GROUP ON SUCCESSION 152 vii Abbreviations Anton with Beaumont A E Anton with P R Beaumont, Private International Law, (2nd edn, 1990) Currie and Scobbie J G Currie and E M Scobbie, The Confirmation of Executors in Scotland (8th edn, 1995). Family Law Report Scottish Law Commission, Report on Family Law, (Scot Law Com, No 135, 1992). Johnston D Johnston, Prescription and Limitation, (1999). McLaren The Hon. John McLaren, The Law of Wills and Succession, (3rd edn, 1894). Meston Michael C Meston, The Succession (Scotland) Act 1964, (5th edn, 2002). SOCRU Succession Survey Scottish Office Central Research Unit, Succession Report Scottish Law Commission, Report on Succession, (Scot Law Com, No 124, 1990).