I was wondering if Anti-Avoidance or Collation inter liberos provisions in scottish law would view the TOD designation as a means to avoid satisfying legal rights?
I found this extract:
The 1975 Act contains anti-avoidance provisions to prevent potential applicants' rights being defeated by lifetime transactions. Where the court is satisfied that a disposition before death or a contract to leave property on death was made for less than full value with the intention of defeating an application then it may make an order against the donee requiring payment towards the award of financial provision. Only dispositions made within six years prior to the date of death are vulnerable to an anti-avoidance order.
Perhaps i should just ask you if you can think of anything in Scots law that could force the US Texas TOD account to be included in the estate for distribution purposes?
it is from a discussion paper on succession 1997
sorry my mistake, you are right this is The Inheritance (Provision for Family and Dependants) Act 197525 which applies in England and Wales
in that case can you think of anything in Scots law that could force the US Texas TOD account to be included in the estate for distribution purposes?
forgive my ignorance but what does a lifetime destination mean?
I just thought I would share that i am very impressed at how quickly you responded to the TOD question in relation to Scottish legal rights. It is taking days for a "legal 500" Scottish law firm to give me an answer on this. If you are right and hope you are it would really put them to shame and emphasize what a great service you offer in comparison. Thank you again!
I just found the following statement whilst reading
"The estate available for distribution to heirs comprises only property owned by the deceased at the time of death"
1)if i understand this correctly it means that any assets owned by my father on death would be part of the distributable estate. As the TOD account had a transfer on death designation it would no longer be his and therefore not distributable.Correct?
2) Funnily enough on reading this I believe that the Scottish law firm told me that anything my father owned before death (not on death) would be included in the estate for distribution purposes regardless of a transfer of a death designation. Obviously the TOD account was my father's whilst alive. Could this argument be correct?
Thank you very much for that.
I have managed to dig out exactly what they told me and here it is:
"The assets available for a Legal Rights claim are ascertained at the date of death. So, the shares and bank accounts (and the US TOD Accounts will be included – TOD is simply a means of avoiding probate; they were a moveable asset of your father’s as at xxdatexx) are all included in the estate, for Legal Rights purposes. From this can be deducted moveable debts, Inheritance Tax, funeral costs and executry expenses involved in obtaining Confirmation and realising assets."
What would you say to that?
They acknowledge the fact that it bypasses probate but nothing about bypassing legal rights! it really bothers me that they have always talked about the TOD as if it was of no real importance and made no difference whatsoever to the way the estate would be distributed.
Can i therefore take it that you disagree with their statement regarding the TOD being part of the distributable estate? any idea as to why they do not reach the same conclusion as yourself?
All they have seen is an English Will with only one beneficiary named on it.
They are aware of the TOD and the designated beneficiary (same as on will) but have not seen the actual TOD disclosure agreement. Then again neither had you which did not prevent you from reaching the same conclusion after i posted the wording of the agreement on here.
Would I be right in saying that any Inheritance tax due on the total value of the estate (which would include the value of TOD account) would only be paid out of estate assets? in order words as the TOD account is not part of the estate any liability/obligation falling on the estate such as IHT would need to be satisfied using estate funds and that the beneficiary of the TOD account would not be expected or could not be forced to use the TOD funds to pay any IHT?
yes i understand from your previous answers that the value of the account would be used in calculating the IHT liability on the total estate but my question is more to do with wether or not the TOD funds would be liable for the IHT debt on the estate as from what you have also said the TOD account is not part of the estate hence not liable for estate debt/obligations?
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