Murray Beith Murray LLP is a leading Scottish private client law firm.
For 175 years we have specialised in meeting the legal, financial and administrative needs of individuals and families, family trusts, charities and private companies.
Murray Beith Murray LLP is a leading Scottish private client law firm.
For 175 years we have specialised in meeting the legal, financial and administrative needs of individuals and families, family trusts, charities and private companies.
Estate planning for blended families can be extremely challenging. When a new family is created from different relationships, it is important to understand the entitlement children who do not have the same two parents have to share in their parents’ estates. In a blended family, there are usually children from a previous relationship of one or both of the partners. This can raise issues about who gets what when one or both die(s).
If you need help or advice to plan your family’s future, contact our expert team today here.
Whilst rules of succession in different countries differ, in Scotland, children have an automatic entitlement to share in their parent’s estate. In a blended family, children would be automatically entitled to a share in their biological (or adoptive) parent’s estate but not in the estate of their step-parent, the new spouse or partner. However, any stepchildren may be included in the Will of a step-parent and would receive a portion of the deceased’s estate if they are a named beneficiary.
The starting point for estate planning for blended families is a discussion, firstly, with the couple and then with the various children, if appropriate. After that, professional advice is essential to explore options. This will ensure that when someone dies, their estate is dealt with in the way in which they wish. This can include ways to cater for children after the surviving spouse or partner has died.
It is important to recognise that a surviving spouse or partner can change their Will. Whilst the couple may have agreed the terms of their Wills, there is nothing to stop the surviver changing their Will after the death of their spouse or civil partner.
Under Scots Law, certain relationships are protected. It is not possible to completely exclude a spouse, civil partner or child from benefitting from an estate, subject to certain conditions.
Where there is no Will, the surviving spouse or civil partner of the deceased has Prior Rights to the estate. This includes a right to inherit the house (up to a certain value), the furniture in the house (again, up to a certain value) and to a cash sum - £89,000 if there are no children or £50,000 if there are children. If the Prior Rights exhaust the entire estate, there is nothing then available to the children in relation to Legal Rights. However, if there is remaining estate once Prior Rights have been exhausted, all surviving children are entitled to Legal Rights comprising one-third of the moveable estate to be shared equally amongst them.
In Scotland, spouses or civil partners and children are entitled to Legal Rights. A child is entitled to share in the moveable estate of their parents. The entitlement to Legal Rights is automatic applies whether there is a Will or not. Ultimately in Scotland, a child can not be disinherited from their parent’s estate. However, Legal Rights can be complex and confusing. Please contact us to discuss any questions you have about Legal Rights and how they may affect your estate or any entitlement you may have to a parent’s estate.
One way of catering for children from previous relationships is to create a Trust either during lifetime or in a Will. This is a very technical area of law and anyone thinking of setting up a Trust should seek expert professional advice.
Those who set up the Trust are called the Trustors or Settlors. They create the Trust and transfer assets into it. These assets can be made up of property, cash and investments or any mix of these. This means that the Trust then owns the assets and not the individuals. The Trust is managed by Trustees who deal with the affairs of the Trust and implementing its intentions. Beneficiaries are those entitled to benefit from the Trust. There are different types of Trust which suit different scenarios and professional advice should be sought when considering using a Trust.
There is no hard and fast rule as to when you should write or renew your Will. As a rule of thumb, any person who owns an asset should have a Will in place.
In addition, you should consider reviewing or renewing your Will whenever you have a significant life event – when you get married, separate, divorce or have children or grandchildren. You might also consider reviewing your Will if you receive a windfall or an inheritance or acquire substantial wealth or assets. It is generally a sensible idea to review your Will every three years just to make sure it continues to match your intentions.
Estate planning for blended families can be complex and fraught with difficulties. Once you have decided what should happen with your estate after your death, you should contact us to discuss how you can best achieve the desired outcome.
Kathryn Johnston is an Associate within Murray Beith Murray Asset Protection group, and is an estate planning specialist. If this article has raised any questions or you would like to discuss an estate planning matter, then please complete our contact form, or call us on 0131 225 1200.
Murray Beith Murray was established in 1849 as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day, as does our commitment to be here when you need us.
