If you think your firm may require a private client locum solicitor or partner, short or long term, or private client consultancy input please contact me at james@legalknowledgescotland.com
The Court of Session has refused to rectify a deed made to dismantle a nil-rate band trust created under a will. The deed fell into the so-called ‘Frankland Trap’.
“[51] In the present case the trustees intended to create a right by executing the deed of appointment. They had no intention of delaying the creation of that right as they were unaware of any benefit in doing so. The deed of appointment expressed accurately the intention of the trustees at the date when it was executed, since their intention was to create a right to the trust fund absolutely in favour of Lord Nickson. The legal result of the deed being executed was that the trust funds were made available to him, exactly as the trustees had intended. Applying the approach identified by Lord Macfadyen of identifying what the grantor intended by way of the creation, transfer, variation or renunciation of rights and then asking whether the legal effect of the language used in the deed achieved the result that the grantor intended to bring about, leads to the conclusion that there is nothing to rectify in the deed of appointment. The fact that in bringing about their intended legal result the trustees fell into the “Frankland Trap”, and failed to achieve the underlying purpose of the whole exercise, seems to me to be a different matter and not within the scope of rectification.”
The full case report can be found here.
Interesting case where the First-tier Tribunal held that the rights of a deceased person and their family to privacy were outweighed by the public interest in fairness of judicial proceedings and the proper collection of taxes.
The full decision can be found here.
If you think your firm may require a private client locum solicitor, short or long term, or private client consultancy input please contact me at james@legalknowledgescotland.com
If you think your firm may require a private client locum solicitor, short or long term, or private client consultancy input please contact me at james@legalknowledgescotland.com
If you think your firm may require a private client locum solicitor, short or long term, or consultancy input please contact me at james@legalknowledgescotland.com
A relatively rare case involving “facility and circumvention” and “undue influence”.
Background.
“In this action Alex, suing in his capacity as executor nominate under the will, seeks reduction of the two dispositions and the deed of gift on the ground that they were impetrated by means of facility and circumvention and also by undue influence exercised over Mrs Matossian by Berj and Richard. The broad proposition advanced on his behalf is that by virtue of the three transactions of 25 April 2007 Mrs Matossian gave away basically all her assets in contradiction of a contemporaneous will, to Berj and Richard for no return except a capital gains tax liability at a time when she was clearly seriously ill and without the assistance of independent advice.”
The Court of Session ruled that that the two sons had used their “dominant influence” and the trust that arose from the relationship to gain a “material benefit” to the prejudice of their late mother.
“In light of these findings I conclude that when Mrs Matossian signed the three deeds on 25 April 2007 she was subject to facility and circumvention as well as undue influence at the instance of both Berj and Richard. The circumstances of the signing of the three deeds are eloquent of both facility and circumvention and undue influence, the requirements of each of which I have set out in full above. I am satisfied that on 25 April 2007 Mrs Matossian was suffering from weakness of mind, that acts of circumvention by Berj and Richard impetrated the execution of the three deeds and that she suffered lesion as a result. I infer circumvention from the whole circumstances of the execution of the deeds, as narrated above. Lesion consists in her having divested herself of her entire heritable estate for no consideration. I reject any evidence from Richard, Berj and Mr Couston to the contrary. So far as undue influence is concerned, I am satisfied that all the requirements, as set out above, have been established by the evidence. There was a relationship that created a dominant influence (sons and mother), confidence and trust arose from that relationship, a material benefit was given to the prejudice of the grantor and there was an absence of independent advice and assistance.”
This article was published in W. Green’s Property Law Bulletin number 134 in February 2015
The Scottish Government recently announced its legislative programme for 2014/2015.
A major part of this programme concerns land reform. This certainly got the most attention when the legislative programme was announced in November. Of particular interest to me was the fact that the Scottish Government also intend to modernise our law of succession.
Let’s start with what the Scottish Government said on land reform:
“Our new Land Reform Bill will take forward radical land reform and ensure Scotland’s land reform debate focusses on how Scotland’s land can be best managed in the public interest to ensure it is of benefit to all of the people of Scotland. The measures in our Land Reform Bill will be accompanied by a range of non-legislative action building on the excellent work of the Land Reform Review Group. Increasing the transparency of who owns Scotland will be a major theme throughout these actions, as we believe that transparency in itself can help create the conditions for on-going reform. That on-going reform will be secured through the establishment of the Land Reform Commission which will ensure than Land Reform is a continuing process.”
In addition the Scottish Government announced:
As mentioned, my main interest lies in the proposed changes to our law of succession and that is what this article focusses on. With this in mind the Scottish Government also announced:
“Introduce a Succession Bill to ensure that the law in this area is fairer, clearer and more consistent. We also plan to consult in the coming year on further legislation on succession which will aim to radically overhaul the current law in this area. As part of this modernisation the distinction between movable and immovable property would be removed to give children, spouses and civil partners appropriate legal rights over both forms of property. This should ensure a just distribution of assets among a deceased’s close family to reflect both societal change and expectations. These changes will be an important aspect of our series of measures in respect of Land Reform.”
The Scottish Government has confirmed that this will be implemented in two stages. The initial stage will implement a number of technical legal changes recommended by the Scottish Law Commission and widely supported by the legal profession. The first sentence of the above announcement is applicable here. These changes are not controversial and will receive widespread support.
The Scottish Government plans to complete the legislative process for these initial changes during 2015 having recently completed a statutory consultation process. The consultation can be found on the Scottish Government’s website.
These provisions include:
The second stage of the proposed reforms will be more controversial and will consider how our succession law might be reformed. This will address such issues as:
A quick reminder of the part of the announcement that applies to this part of succession reform might be helpful at this point:
“We also plan to consult in the coming year on further legislation on succession which will aim to radically overhaul the current law in this area. As part of this modernisation the distinction between movable and immovable property would be removed to give children, spouses and civil partners appropriate legal rights over both forms of property.”
The ‘current law’ reference includes legal rights. Before I look at what this might mean in practice a brief reminder as to what constitutes legal rights.
Legal rights are a distinctive feature of Scots law. Legal rights are likely to have been introduced around the same time as feudal tenure in Scotland. When looking at the history of legal rights I was reminded of the fact that up until 1868 land could still not be bequeathed in a will as land continued to pass to the next generation under the law of primogeniture. I am also sure many of you will remember the terms ‘terce’ and ‘courtesy’ and the Succession Scotland (Act) 1964 from your time at University. Our present system of legal rights come from the 1964 Act.
Legal rights apply whether an individual dies having made a will (testate) or not (intestate). It is not possible to defeat legal rights in a will. Legal rights act as a safeguard to protect members of a family from being disinherited. It is not possible to take a legacy as well as claiming legal rights.
Legal rights can be claimed by the surviving spouse, and the children (including adopted) of the deceased. The right to claim is automatic, no application to the court is necessary. The legal right of the surviving spouse is one third or one half of the net movable estate depending upon whether there are surviving children. Similarly, the children have a right to one third or one half of the net movable estate depending upon whether there is a surviving spouse.
The movable estate reference is of course crucial in this context. I will come back to this very important point.
The funds available are net of debts applicable to the movable element of the estate such as payment of inheritance tax, funeral costs, expenses to obtain confirmation of the executors and the realisation of assets. The value of the estate is the value at the date of death. Interest accrues from date of death to date of payment. The rate of interest is not fixed: it is what the sum earned or could have earned by prudent management.
In Scots law, there are two types of property, immovable and movable. Immovable property is ‘land’ (and that which is attached to it) and is commonly referred to as heritable property. Everything else other than heritable property is considered movable property.
Legal rights can be claimed only from the movable estate. This includes bank and building society accounts, investments, savings certificates, premium bonds and life policies.
The removal of the heritable/movable distinction has been suggested on a number of previous occasions, most recently in the final report by the Land Reform Review Group. The Land Reform Review Group was an independent review group established by the Scottish Government in 2012.
This is from the final report of the Land Reform Review Group from May 2014 and in particular Part Two Section 6.
“This distinction [between movable and immovable property] does not occur in other European countries and can be traced back to the introduction of feudal tenure in Scotland over 900 years ago. Since that period, the laws of succession to land have been a key issue for those owning the land, in order that their heirs and descendants retained control over all of the land held.” Part of paragraph 2
“In considering the debate about Scotland’s laws of succession over the last 50 years since the limited reforms of the 1964 Act, it appears clear that ‘agricultural and landed interests’ have successfully opposed a broad consensus across other interests in society to end the distinction between heritable and movable property.” Part of paragraph 15
“The Group considers that, while this issue involves land, the driving need for removing the remaining distinction between heritable and movable property, should be a straightforward matter of social justice based on the current disadvantaged position of spouses and children.” Paragraph 16
“The change would finally end the long standing link between land ownership and succession law in Scotland. The abolition of feudal tenure removed the defining character of a feudal system (superiors and vassals) and the special treatment of land in succession law, which is another distinctive relic of that feudal system, should also be abolished.” Part of paragraph 18
“The Review Group recommends that the Scottish Government should, in the interests of social justice, develop proposals in consultation with the Scottish Law Commission for legislation to end the distinction between immovable and movable property in Scotland’s laws of succession.” Paragraph 20
The following is from the Scottish Law Commission’s report on Succession (report number 215) from April 2009:
“It is generally accepted that this system is flawed. First, legal rights are only exigible from the net movable estate. There is very little, if any, protection when the estate consists largely of heritage as the deceased is free to [decide who inherits what] on heritable property without restriction. On the other hand if the estate is largely movable, the deceased’s freedom to [decide who inherits what] is restricted to half of his movable property if there are no issue and only a third where there are. Second, both assets and obligations have to be classified as either heritable or movable: heritable debts are then in the first place set against heritable property and likewise movable debts against movable property. This complicates the administration of the estate. Third, legal rights are rigid. They do not take into account the recipient’s needs, resources or conduct and the claims of the recipient cannot be balanced against those of the testamentary beneficiaries. Fourth, legal rights vest in the spouse or civil partner on the date the deceased died: this is also true of any testamentary provisions in their favour. In this situation a choice has to be made between legal rights and the testamentary provisions. But the right to choose is only brought to an end by the long negative prescription ie 20 years after the date of death of the deceased. This can result in long delays in winding up estates. Finally, it appears that legal rights are rarely claimed. In research for her article, Dot Reid found that out of 73 law firms which responded to her questionnaire, 68% of the experienced executry practitioners had not encountered a testate estate in which legal rights had been claimed and a further 28% had only encountered this situation once or twice.” Paragraph 3.3
“There is no doubt that our proposals have given rise to concern among the agricultural community. On reflection we feel that the concern is largely misplaced. First, a child can renounce the right to legal share at any time before or after the deceased’s death. Second, while a spouse or civil partner will be entitled to legal share, most farmers’ wives are aware of and support the farm being inherited by one of their children: we envisage that in these circumstances it will become standard practice for them to renounce their right to legal share on marriage or shortly thereafter. Even if a spouse, civil partner or child elects to receive payment of legal share, we have provided that an application can be made to court by the deceased’s executor for the sum to be paid in instalments thereby reducing the financial difficulties which may arise in order to pay the sum due. The fact that the deceased’s interest in an agricultural business often takes the form of movable property and is subject to legal rights and legitim claims under the current law confirms our view that our proposals will not, in practice, have any serious detrimental effect on the farming and landed estates sector.“ Paragraph 3.64
“Therefore we recommend that: Businesses, including agricultural farms and estates, should not be excluded from claims for legal share.” Recommendation 26
Given the findings of both the Land Reform Review Group and the Scottish Law Commission it is not surprising that the Scottish Government are taking these proposals forward.
So what might this mean for the owner of a family home, a farm or estate?
For many in farming circles it has been perfectly normal for one or more, but not all of the children to be inherit the heritable estate with the other family members getting very little. The merit in this is that the farming unit is not fragmented and the viability of the farming business is maintained. Currently if the farm is held in the names of individuals, the property remains heritable property. However, if the heritable property is held in the name of the partnership, as is often the case, the heritable property becomes movable so it would then become open to a legal rights claim.
There will of course be a number of ways to mitigate the type of changes that are likely to be made. For example pass on at least some of the land to the next generation prior to death. A second option will be to have those who have such rights renounce them. In addition I am sure many farms and estates will continue to be owned within a company or trust structure of which these proposals may have limited impact.
I am sure this is a topic that we will hear a lot more about in the coming months. As regards the initial changes I hope that they will be enacted as soon as possible. As for the second part of the proposed changes, I await the consultation paper with interest.
Notwithstanding yesterday’s disappointment there are a number of reasons to be optimistic about the future of Scottish rugby.
1. Glasgow winning last year’s Pro 12. Edinburgh becoming competitive, reaching last year’s Challenge Cup final and in contention for a play off place. I think it is a good thing that both Scottish teams do not automatically qualify for the European Cup.
2. There is now more coverage of Scottish rugby. Although print media coverage has declined social media coverage is increasing all the time. Glasgow Rugby seem especially keen to use social media. We in the Borders are also very lucky to have Border Rugby TV.
3. The SRU now seem to be taking women’s rugby more seriously with the appointment of Shade Munro and the amount of resources going into it.
4. Finally we seem to be moving in the right direction as far as regional academies are concerned.
5. Friday’s win for our under 20 team is tangible evidence of the growing number of players we at last have coming through and who seem ready for a career as a professional rugby player. I suspect a lot of this is down to the work of Sean Lineen.
6. The appointment of Richie Gray
7. The standard of the premiership continues to improve as does the coaching at that level. It is now a very competitive league.
8. The news of the increased links with London Scottish is long overdue and could potentially give a number of younger players a great chance to experience a good level of rugby. Again I am glad to see Sean Lineen involved in this. We also need to consider whether the money we put into our national sevens squad could be better spent at London Scottish or on our premiership teams.
9. The Club internationals are a good addition to the rugby calendar. I personally would still like to see our district teams play in the B&I Cup or have them play each other on the same weekends Edinburgh play Glasgow.
10. At last we have the makings of a Scottish wide competitive youth structure.
11. There seems to be more sponsorship money coming into our professional game and the SRU’s debt mountain could at last be paid off within a few years.
It is just a pity that so many years were wasted by a series of incompetent SRU administrations.
Over the last few years I have been asked on a number of occasions if I would give a eulogy.
So what is a eulogy? In simple terms, it is a tribute to someone who has just died. It is though not a simple task. Each eulogy is unique. It is also different from most other speaking engagements given the context and the location. It is commonly given by a minister, a priest, humanist celebrant, close family member or friend.
I have been asked by clients who had already outlived most of their family and friends. I have also been asked by relatives who simply did not want to do it and did not want someone who did not know the deceased well to do it. I have also been asked to provide a few pointers for colleagues and friends who had themselves been asked to do this.
The starting point is always the same. Are you the right person to do it?
Is there someone else who might be better placed to give the eulogy? Should the responsibility be shared with someone? If more than one person is involved remember and discuss with them what you are going to cover.
For obvious reasons a eulogy can be an extremely difficult thing to do. It is an emotional time and not everyone wants to speak in public.
Do you have time to do it properly? A decision has to be made relatively quickly given the time constraints.
Even if a family member does not want to give the eulogy maybe there is something else they want to do such as reciting a poem or a religious reading.
Notwithstanding the above points, do not forget how privileged you are to be asked to do this.
If you decide to do it, start to note down what you already know about the person. Then who do you need to speak to. Find out if there is to be a funeral or cremation and who will be officiating. In some cases you may also be organising the funeral arrangements.
As regards what you might want to say. I do not follow a particularly style. I do though spend a fair amount of time talking to people who knew the deceased such as family, friends or colleagues.
A eulogy is also a good opportunity to thank a number of people especially if the deceased had been ill or had been being cared for. The obvious landmarks in a person’s life should also be mentioned. Sometimes there is a story that a family member wants to be included. The tone also needs to be appropriate. Again your discussions can help you find out what the deceased would have wanted.
Do not also assume that everyone knows who you are. 15 minutes should be enough time in most cases.
One final point. Not everyone may be able to make the funeral of a loved one or a friend because they themselves may have health problems or it may be too far to travel. I have found that in situations such as this the person really appreciates being sent a copy of the eulogy. Also if they are a close relative you should mention the fact that they could not make the service in the eulogy.
