As we look forward to Burns night, I found myself wondering what it would be like to be living somewhere other than Scotland at this time of year. That led me to also wonder what it would be like to be a non-Scot living in Scotland, trying to understand what on earth is wrong with the person (probably wearing a kilt) shouting “fair fa’ your honest, sonsie face; Great chieftain o’ the pudding race!” at a haggis. I then started thinking about Brexit, and the impact it could have on people in either scenario. Thankfully my thoughts quickly turned to something a bit lighter: preparing for your death.*
Leaving aside the cultural differences, when it comes to succession planning, there are also legal complications which come with living (or having assets) in more than one country. In terms of Scottish law, your country of birth gives you your “domicile or origin”. Your domicile dictates which law applies to the succession of your estate following your death. It usually follows that you should have a will in accordance with the law of the country of your birth.
However, much like you might acquire a taste for whisky, you might acquire such a fondness for Scotland that you plan to stay here for the rest of your life. In that case, you may have obtained a Scottish ‘domicile of choice’ which replaces your domicile of origin. That would mean that Scottish law would apply to the succession of your estate. Scots living abroad could acquire a non-Scottish domicile of choice in the same way.
Of course that is just the position under Scottish law. Other countries have different rules. So it is easy to see how the question of what law should apply to any given individual can become a complicated one. It is complicated even further by the fact that the UK (and therefore Scotland) is not (and never has been) a party to the EU Succession Regulation, which was an attempt to smooth over the difficulties caused by these competing laws, at least in Europe.
So why is all of this important? Well the law in each country is different and can have very different implications for how your assets are divided after your death. Take France as an example. You might think that, as long as you have a will, you can control who your assets pass to on your death. However, French law has what are known as ‘forced heirship rules’ which dictate who certain assets (such as houses) pass to, irrespective of what you say in your will.
Scottish law has its own forced heirship rules in the form of ‘legal rights’. Legal rights only apply if the person was domiciled in Scotland when they died. They automatically entitle the spouse or children of a deceased person to up to half of the deceased person’s moveable estate, regardless of what their will says. The moveable estate includes everything except land and buildings, and extends to the worldwide estate of the deceased. So you can see how the position under Scottish law and French law is completely different.
The reality for people who live in one country but have assets or interests in another is often that, regardless of which law applies, they should have a will in both countries. That is usually the best way of ensuring that your assets pass to the people who you want to inherit. At the very least, taking advice in each country will allow you to understand what you can and cannot control in terms of succession. Having two wills can also make the administration following death more straightforward.
As technology and social media make the world ever smaller, these sorts of issues will be encountered by more and more people. The Personal and Family team here at Brodies are alive to the issues faced by people who have interests to more than one (or indeed several) countries. We have team members who are qualified as lawyers in South Africa and Canada; a fluent French speaker; and extensive experience of acting for clients with assets, business interests, and families in countries right around the world, from Europe to South Africa; the United States to Singapore; and many more.
So the point of this blog is this: whether you are having your haggis with a glass of Châteauneuf-du-Pape; your Boerewors with an Irn Bru; or your poutine with a ‘Scotch’, please take a second to consider whether the succession planning you have in place properly takes account of your Scottish and non-Scottish connections.
If you would like to discuss your own circumstances, do not hesitate to contact me or your usual Brodies contact.
*On a more serious note, if the uncertainty around Brexit is causing you or your loved ones sleepless nights, I would highly recommend taking a look at the Brexit checklist for businesses which my colleagues in the GRC team have put together here.