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Fergusson Law shares their latest news, the latest legal news and provides some legal advice on this blog.

Digital Assets in your Will

We all use the web daily. The number of online accounts and the value of digital assets are only going to increase. So why do so few people consider what will happen to their digital assets when they die?

The story of Gerald Cotten may ring a bell with you.  £100m locked up, with his executors and heirs unable to reach it.   Read all about it here.

Think of two categories.

  1. Financial Information - While not being an asset itself, it can lead us to our assets and liabilities such as online bank accounts, savings and investments, PayPal, eBay, and shopping accounts.
  2. Digital Assets - With value in their own right, whether a character in World of Warcraft, our music downloads or a Kindle library.

You might wonder what the problem is. The law covers all of this either with wills, for those who make them, or the rules on intestacy for those who do not. Why are digital assets any different to paper-based ones? Executors or next of kin just ingather the assets of the deceased, settle their liabilities, pay any inheritance tax that is due and then distribute the estate. There are, in fact, 3 problems:

  • access
  • valuation
  • location

Most of the internet or digital service providers regard their service as a lifetime service and do not see the concept of a digital legacy at all. It is a common contractual term that when an account becomes permanently inactive it will be deleted. It would be much better for you to engage with the service provider and ensure that you have made your wishes known as to what you would like to happen after your death. For example, you should state that access should be passed to a certain individual. Google provides an Inactive Account Manager service for this purpose.  Apple say that their digital downloads are for your lifetime only. Similarly, your Photos in iCloud will disappear. You could store your Apple ID and password with your Will so that executors can deal with your data. You might be surprised to know that the balance on some dormant accounts could be paid to the Treasury of Luxembourg or indeed to the Malta Lotteries and Gaming Authority.

Further issues arise where the executors or next of kin have to value the digital assets. Provided they can locate them, this often will not be a problem but digital assets in the form of pure gaming characters may require specialist assistance. There are exchanges on which such virtual items can be sold, such as Sony's Live Gamer Exchange.

The solicitors at Fergusson Law are experienced and ready to advise you about including your digital assets in your will.

This article has been updated from the original first posted on April 2014.

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Intestacy For Buy To Let Investors

buy to let properties and intestacy

Dying Intestate

Do you have a Will? If you die without one, your estate may not be distributed in the way you would have intended, and it might cause real problems for your family. The issue is of particular concern to buy-to-let investors, who own flats and houses in addition to their family home.

If you do not have a Will in Scotland, your estate is divided according to the rules of intestacy.

Firstly, if there is a surviving spouse they get PRIOR RIGHTS.

  • The family home (if they live there) up to a value of £473,000
  • Contents (if they live there) up to a value of £29,000
  • Cash - £50,000 if there are children, £89,000 if there are none.

If there are moveable assets left after prior rights, LEGAL RIGHTS apply

These only apply to moveable assets – that is everything except houses, flats and land.

  • Surviving spouse and children: spouse gets 1/3rd of moveable assets, children between them share 1/3rd of moveable assets. Final 1/3  of moveable assets goes into FREE ESTATE
  • Surviving spouse only: s/he receives half net moveable assets.  The other half to FREE ESTATE
  • Surviving children only: they share half net moveable assets. The other half to FREE ESTATE

everything left over after Prior and Legal Rights falls into the  FREE ESTATE

Therefore any other houses and land you own (including your buy-to-let properties), and all the cash etc. left from Rights will be distributed in the following strict order of succession:

  • Your children come first
  • If you have parents and siblings they share your free estate
  • If you only have parents, they take your free estate
  • If you have siblings, but no parents, they inherit (or their children if they have predeceased)
  • If you have no children, parents or siblings your surviving spouse comes next

It then goes on to uncles/aunts and other more distant relatives.  But the important point is that your wife or husband is very low on the list.  Your nieces and nephews may have better rights to your free estate than your surviving spouse. All the cash remaining may go to relatives (Laughing Heirs) whom you have never met.    If no-one can be found then the Scottish  Government gets it.

If you are a buy to let investor with no Will your properties are likely to end up in your free estate.  If you have children, they will inherit these properties in preference to your surviving spouse, even if they are very young at the time.  This could result in an unnecessary inheritance tax bill and make the properties difficult to manage as young children do not have legal capacity.  If you are married with no children, your parents, brothers and sisters, (or their children if they have died before you) will inherit your buy to let properties in preference to your husband or wife. If you have an unmarried partner, they have limited rights, which do not include the buy-to-let properties.

If that is not what you want the practical solution is to draw up a Will.   Download our Information Sheet Intestacy, read this article, No Will leads to family disputes,  or call us now on 0131 556 4044

For further help and legal advice about this matter please do not hesitate to get in touch with one of the Solicitors at Fergusson Law.

DISINHERITING THE FAMILY? TAKE ADVICE BEFORE YOU DO IT. 2018 UPDATE

A recent ruling in the Court of Appeal in England and Wales highlights that although you can leave your money to whom you like there are some limitations, wherever you live in the UK.

England, Scotland and Wales, like the United States, have a tradition of "testamentary freedom" - the idea being that you can, in theory, leave your wealth to whoever you like.

Countries like France, Spain and the Republic of Ireland, by contrast, have fixed heirship shares.

However in Scotland, children and spouses may have "legal rights" to a portion of the deceased's estate.

A surviving spouse, or civil partner and children are entitled to part of the deceased person's moveable estate. In Scots law, heritable property means land and buildings, while moveable estate includes such things as money, shares, cars, furniture and jewellery.

The surviving spouse or civil partner is entitled to one-third of the deceased's moveable estate if the deceased left children or descendants of children, or to one-half of it if the deceased left no such children or descendants.

In England and Wales the Inheritance Act of 1975 section 2 sets out that close relatives may apply to a court for a variation to a will ‘such as to make reasonable financial provision for the applicant’.

The bar is set high in that an applicant must show real need or that they were led to believe that they were to receive an inheritance and acted on that belief.

One dispute currently going through the High Court involves Clive Shaw, 55, a dairy farmer who reportedly does not like cows, He is making a claim for the family farm after a disagreement with   his   parents who have written him out of their wills.   

It is the latest in a series of similar legal claims made this year. Lucy Habberfield brought a claim in the High Court in January 2018 against her mother. After the death of her father, her mother became the sole owner of the family farm   despite repeated promises over the years that Ms Habberfield   would inherit.   She had devoted much of her life to the farm working long hours for little pay. She was awarded £1.2m  to set up her own farm.

professionally drawn up Will covers all these eventualities and you must show that the needs of your close family were considered fully.

For advice in this matter please get in touch.