IHTM12213 - Succession: Scottish Prior and Legal rights: Prior rights: Examples of prior rights calculation
Example 1
The deceased, Dominic, died domiciled in Scotland on 12 June 2000, intestate, survived by a widow and children. (IHTM12252)
He left heritable estate valued at £110,000, consisting of a house (value £100,000) and a field (value £10,000), and moveable estate valued at £20,000, consisting of furniture (value £12,000) and cash and investments (value £8,000).
The widow’s maximum prior rights (IHTM12211) entitlement according to the value levels (IHTM12212) in force at Dominic’s death would be
- house up to value of £130,000
- furniture up to value of £22,000, and
- a cash provision of £35,000.
However, her actual entitlement is necessarily restricted by the value of the estate, and she takes the whole estate. Her restricted entitlement would be met in this way
- house (full entitlement) £100,000
- furniture (full entitlement) £12,000, and
- cash provision (restricted) £18,000 being the whole remaining heritable and moveable estate.
As the widow’s prior rights exhaust the entire estate, there can be no legal rights (IHTM12221) entitlement in this situation.
Example 2
Take the same facts as for Example 1, except that Dominic left cash and investments valued at £40,000.
In this situation the widow would receive her full prior rights entitlement, namely
| a. house | £100,000 |
| b. furniture | £12,000 |
| c. cash provision | £35,000 |
After prior rights a. and b. have been met, the whole remaining estate amounts to £50,000, being:
- heritable estate (the field) = £10,000 and
- moveable estate (the cash and investments) = £40,000.
The cash provision must be satisfied proportionately from remaining estate. So, a fifth of the cash provision (£7,000) must be satisfied from what is left of the heritable estate and four fifths (£28,000) from what is left of the moveable estate.
So the balances remaining after all of the prior rights have been met are:
Heritable estate £3,000 (£110,000 less (£100,000 + £7,000)) and
Moveable estate £12,000 (£52,000 less (£12,000 + £28,000)).
The heritable estate balance, of £3,000, passes under the rules of intestate succession to the heirs in intestacy (in this case Dominic’s children living at his death, equally).
The moveable estate balance, of £12,000, is the fund on which the legal rights (IHTM12221) calculation is based, and from which the legal rights of the widow and children will be paid. In this case the widow’s legal rights entitlement is one-third (£4,000), as is that of the children. The remaining one-third (the ‘dead’s part’) passes under the rules of intestate succession to the children as heirs in intestacy.