Legal rights are a form of forced heirship. The legal rights of spouses and children are a right not to be entirely disinherited. We explain more in detail below.
It is a right to cash to the value of the deceased’s person’s net moveable estate. Legal rights cut across the will and they are an entitlement. The net moveable estate is after deduction of debts and certain expenses.
The moveable estate for legal rights excludes land and buildings so they can be left to whomever you like. However, land and buildings are included in the legal rights pot if they are brought into a business, that is where the land is in a partnership or owned by a company.
Legal rights in the net movable estate are as follows:-
• If there is a spouse and child(ren) - spouse has 1/3, and child(ren) 1/3 (equally between or among them, so five children would receive 1/5th each of 1/3, or 1/15th each);
• If there is only a spouse - 1/2;
• If there are only child(ren) and no spouse- 1/2;
If legal rights are a concern then there are various planning options:
• Ask your spouse and/or child(ren) to give up their legal rights now. If a renunciation is not forthcoming, you know you have a problem and can plan accordingly;
• Gifting assets to the intended heir during your lifetime. However, affordability and tax need to be considered before making a lifetime gift;
• If affordability is an issue, you could set up a trust for yourself and your intended heirs and transfer assets to that trust. Tax would need to be considered;
• You could build up other assets to meet the claim. Consideration might be given to life insurance to achieve a similar result;
• Pensions are usually protected from legal rights;
• The person taking legal rights cannot also take anything that has been left to them in terms of the will. It might be possible to tempt them with provisions in the will;
• If land and buildings are in a partnership they are vulnerable to a legal rights claim. Further advice can be given on protection;
• Invest in land and buildings. The Scottish government have recently looked at reforming legal rights so that they extend to land and buildings, but they decided not to take this reform forward;
Legal rights cut across the will and they are an entitlement. This can stand in the way of your wishes being carried out but you can minimise this through planning.