Meeting of the Parliament 20 December 2023
I thank the members who have contributed to the debate. There is a general consensus that the law on trusts is outdated, and the changes that are proposed in the bill will make a significant and positive difference for those who use trusts in Scotland. I hope that it is clear that we listened carefully to what was said by stakeholders, the committee and other MSPs during stages 1 and 2.
Trust law may sound remote and dusty, but it is important to recognise that it impacts many of us. Trusts have an everyday utility. To put it simply, they are an important means of managing assets for people. For example, payments from the clients of a travel agent or a solicitor may be held in a form of trust. A person may set up a trust to control and protect their family assets, or a trust may be used when someone is too young to handle their affairs or when someone has suffered a serious personal injury. As the number of blended families increases, trusts can help to manage assets between complicated and sometimes difficult family relationships.
I hope that it is clear that the bill matters to all those who are involved in trusts in Scotland, whether as a truster, a beneficiary or a trustee. It will make things simpler and fit for modern-day purposes, which will be of great benefit to those people.
However, if the bill is passed today, as I sincerely hope it will be, there is still a lot of work to be done before its provisions will be capable of coming into effect. During the stage 1 evidence sessions, we heard how important it is, given the significant value that is involved and the fact that there is a sizeable pensions industry in Scotland, that pension trusts are included in the reforms. Work has been under way for some time to engage with the UK Government on the necessary section 104 order under the Scotland Act 1998 to ensure that we will not be left with a black hole in the law and that pension trusts here will benefit from the reforms. There is more work to be done, and we are committed to doing it.
I mentioned earlier Jeremy Balfour’s amendment that relates to cohabitation. Although I was happy to support that, I made it clear that we would not plan to bring that part of the bill into force until such time as the other issues that are encountered by people who attempt to apply for financial provision on the death of a cohabitant are considered further and, if necessary, addressed. I have written to the committee setting out my intention to consult on those issues as part of a wider consultation on the recommendations in the Scottish Law Commission’s report on cohabitation, and I intend that consultation to be published by the summer of 2024.
Throughout the bill’s passage, questions have been raised about wider reforms to the law of succession. The bill was never the legislative vehicle for such reforms. The Scottish Law Commission has produced reports on the issue and we have subsequently consulted on several occasions. It was clear that there was no agreement on the matter among stakeholders and, given that the area of intestate law has potential to impact on us all, it is very important that we take time to get it right. Over the past couple of years, we have been pleased to fund work, which has been carried out under the auspices of the Scottish Civil Justice Hub, to gather data and evidence, including on public attitudes, and to carry out research that can be used to inform policy. This is not an area of law that has been forgotten. On the contrary, work is on-going, and I am happy to keep the committee updated on progress.
Importantly, the bill incorporates powers so that we have the tools and the flexibility to ensure that provisions can be kept up to date. For example, the committee recommended in its stage 1 report that it would be desirable to consider flexibility in the bill to alter the types of trust applications that may be considered by the sheriff and those that may be considered by the Court of Session. The Scottish Government therefore lodged a stage 2 amendment to allow the Scottish ministers to vary the definition of “court” so that either the sheriff court or the Court of Session may consider different types of trust applications.
Another example is the definition of “incapable”. The bill sets out the circumstances in which a person is to be regarded as incapable for the purposes of the bill, and it aligns the definition with the wider incapacity legislation in Scotland. In recognition of the significant and far-reaching changes that have been recommended to mental health legislation and the fact that the precise nature of future changes cannot be anticipated, the bill was amended at stage 2 to provide Scottish ministers with a power to amend the definition of “incapable” to ensure that there is sufficient flexibility to allow trust law to keep pace with the evolving understanding of incapacity.
I will turn to a few points that were made during the debate. Oliver Mundell, Bill Kidd and Martin Whitfield raised the importance of public awareness. I know from discussions with my officials and the Law Society of Scotland that the organisation intends to publicise the changes that the bill will bring about to its members, who are likely to comprise a significant number of professional trustees and professional advisers to Scottish trusts. I am happy to work with the profession to agree what further guidance or awareness is necessary.
Rhoda Grant and Martin Whitfield mentioned the importance of people making wills and powers of attorney. In our positions as MSPs, we should all be highlighting that to our constituents wherever possible. Moving on to section 19, Martin Whitfield asked about good causes. I note that there have been discussions with the law firm CMS Cameron McKenna Nabarro Olswang about covering ring-fenced assets. That is a specific example that relates to section 19.
In conclusion, I repeat my thanks to all those who gave evidence to help to improve the bill during the parliamentary process. I commend the motion in my name to the Parliament.