The Effect of Conditional Gifts in a Will

An individual’s will details how they intend for their estate to be managed and distributed in the event of their passing.

In some instances, testators decide to include certain conditions that must be met before beneficiaries receive their inheritance. This means that if an individual fails to use the gift as specified in the terms of the will, or doesn’t meet a particular requirement, they won’t receive the asset/s or funds.

This allows the deceased to establish more control over the management of their assets, giving them greater confidence in the manner with which their estate will be administrated after their passing.

Such circumstances are referred to as conditional gifts or bequests and, depending on the specific testamentary wishes of the deceased, may not always be enforced by the Court. Thus, if you intend to include conditional gifts in your will, or you’re a beneficiary in a conditional will, it’s important to ensure the statements included hold legal merit.

What Types of Conditional Gifts Can a Testator Leave?

When writing their will, there are two main types of conditional gifts that a testator can leave. Distinguishing these groups is relatively straightforward; however, each can have a significantly different impact on the outcome of a case.

Condition bequests may be either:

• A condition precedent: when a certain condition must be satisfied before the beneficiary is awarded a gift;
• A condition subsequent: when a beneficiary receives a gift but, if a particular event occurs, the asset is revoked.

What do Testators Commonly Include as a Conditional Gift in their Will?

Often, conditional wills focus on creating incentives for those mentioned, encouraging them to work towards certain achievements that the testator values. For instance, the deceased may specify that to receive a particular sum of their inheritance, a beneficiary must get married or graduate college by the time they’re 25.

Alternatively, a testator may stipulate that, until their children reach a certain milestone, such as turning a specific age, they won’t be able to access particular assets. For instance, they may only start receiving their inheritance once they turn 21 and, even then, it may be granted in instalments across a number of years.

In some cases, testators bequeath gifts on the premises that their beneficiaries must first complete various actions over a specified period of time. This may involve attending the deceased’s funeral or caring for a loved one.

Are Conditional Gifts Legally Enforceable?

The types of conditions that testators may include in their will can be incredibly diverse; however, it isn’t guaranteed that such requests will always be imposed.

For gifts of this nature to be deemed legally enforceable, the satisfaction of their condition/s must not rely on the individual mentioned acting against public policy.

The Court may also overturn a conditional bequest if the task is impossible to fulfil in the given timeframe. However, it’s important to note that in such cases, the testator’s request must go beyond simply being difficult or improbable.

Lastly, if the condition is uncertain, in that a clear interpretation of the terms used cannot be established, it may be declared void due to its ambiguity.

The Challenges of Conditional Gifts

While conditional bequests can be an effective way for testators to have greater control over the management of their estate, there are also various downsides that can arise as a direct result of their enforcement.

It’s difficult, if not impossible, to foresee the future needs of your beneficiaries and, in some cases, an immediate need may arise. If you’ve gifted certain assets that can only be used for the purpose specified in your will, this can be problematic for your beneficiaries.

Maybe they require urgent medical care, or they’re experiencing severe financial hardships. If you were still with them during this time, there may have been no question that would step in to provide much needed support. However, as the impacted individual’s inheritance is conditional, it’s unlikely that they will be able to access these funds or assets.

The way conditional wills are written can also cause issues as, if the terminology used isn’t carefully considered, the outcome may not be in line with the testator’s true wishes. For instance, when leaving a certain asset to a beneficiary, a testator may specify that the individual cannot sell it. However, once the asset’s ownership is transferred, it becomes the property of the beneficiary. Thus, they are free to manage it as they wish.

Speak With an Experienced Estate Lawyer

If you’re interested in contesting a conditional gift, speak with our experienced estate lawyers. They can assist you in determining the merit of your case and, if you decide to proceed, our professionals will ensure you’re well informed during each stage of your estate dispute.