Trusts and Succession (Scotland) Bill
The Bill aims to change the law in relation to two areas:
- trusts: how they are administered and managed
- succession: who has the right to inherit and in what order
The Bill was passed on 20 December 2023 and became an Act on 30 January 2024
This Bill is split into two parts.
Part 1 of the Bill deals with trusts. A trust is a way of managing assets (including money, investments, land or buildings) for people. There are different types of trusts for different purposes. The Bill updates the law around what the person who manages a trust (called a trustee) can do. The Bill clarifies:
- what kind of investments can be made by a trustee
- a trustee’s duty of care in relation to their role
- whether a person can be a trustee or not
- how someone would stop being a trustee by resigning or being removed
- what type of information a trustee must provide to other people (including to beneficiaries – the people who will benefit from the trust ) and how often
- the management of private purpose trusts.
There might be more than one beneficiary, like a whole family or defined group of people. The Bill clarifies the information a beneficiary must be given and how their views should be considered. The Bill also clarifies the role the court must take in terms of representing a beneficiary under the age of 18.
Part 2 of the Bill deals with succession. Succession is the way that a person’s property is managed and distributed after they die, including who will inherit it.
Section 71 clarifies the law in relation to special destinations. A special destination is a condition that often applies when people (usually spouses) buy property jointly. It means that if one of the joint owners dies, their share in that property automatically passes to the other person. The Bill clarifies that if, under these circumstances, the people were married, but later divorced, the property is not automatically inherited by the ex-partner.
Section 72 reorders who inherits property when someone dies without leaving a will. At the moment, spouses and children are entitled to a specific share of the property whether or not a person has left a will (these are called prior and legal rights). If there is no will, there is then a list to show who any remaining property will go to. Children and grandchildren are first on that list, followed by parents and siblings and then a spouse.
The Bill proposes to list spouse after children and grandchildren. This would mean that if someone died without a will, leaving behind a spouse, but no children or grandchildren, the spouse would inherit everything. But if the deceased person had any children or grandchildren, they would inherit any property left after the share identified under legal and prior rights.
Why the Bill was created
The Bill aims to modernise the law.
Trusts have been in use since at least the early 17th century in Scotland. The main existing legislation on trusts is the Trusts (Scotland) Act 1921. The 1921 Act has been significantly amended making it complicated and difficult to understand.
There was some doubt on how the existing law on succession and special destinations should be interpreted. The Bill aims to clarify the existing law.
The Bill also aims to modernise the order in which people inherit. This is to reflect changes to how society understands families and the different relationships within them.