Will disputes in Victoria: Are the terms of conditional gifts final?
A conditional gift is a provision in a Will that provides an asset to a beneficiary under a specific circumstance. Conditional gifts are designed by a testator to encourage or prevent specific behaviour of a beneficiary.
The two types of conditional gifts are known as conditions precedent and conditions subsequent.
A condition precedent is where the beneficiary must meet a condition before they receive their gift from the estate. A common condition precedent is that a beneficiary can only inherit their gift once they reach a particular age. Sometimes a condition precedent is used in the hope that it will encourage a beneficiary to observe the testator’s wishes. For example, a will may specify that a son or daughter only receive their inheritance once they graduate from university.
On the other hand a condition subsequent is when the beneficiary will receive their inheritance but it will be rescinded if an event happens. For example, a condition subsequent might be that if beneficiary withdraws from their university course then their inheritance is revoked.
Is a conditional gift always legally binding?
Courts are generally hesitant to deny a testator’s wishes and will uphold a conditional gift, subject to the following:
- That it doesn’t disrupt the rule of law;
- That it is certain and possible to fulfil; and
- That it doesn’t conflict with established public policy.
Conditional Will dispute in Victoria: Case study
The legality of some conditional gifts were considered by the court in Hickin v Carroll & Ors (No 2) . In this case, inheritance was given to 4 beneficiaries, being the children of the deceased. It was gifted on the condition that they be baptized in the Catholic Church within 3 months of his death. The children were unwilling to be baptized, as they already had been baptized in the Jehovah’s Witness faith. Accordingly, the beneficiaries applied to the court to challenge the validity of the condition of the gift.
The beneficiaries argued that the condition was uncertain and impossible to perform or that it conflicted with public policy, in that it is a fundamental right belonging to a person to be able to follow any religion of your choosing. The beneficiaries presented the argument that the condition was not specific enough as to provide a particular Catholic Church and type of baptism.
The court was of the view that the condition was not impossible to fulfil, as it believed that the condition could be satisfied by attending any Roman Catholic Church for a baptism. This demonstrates that for the condition to be invalid it must be more than challenging to fulfil or not completely clear. A slight ambiguity will not make it impossible for the beneficiaries to fulfil the condition imposed.
The court also made the findings that conditions restraining a beneficiary to a particular religion were only contrary to public policy if it effected a parent’s right to raise their children in a faith of their choice. An example of a condition that is considered to conflict with public policy is where a gift is dependent upon a beneficiary divorcing their current spouse. A condition of this nature is likely to be invalidated by the courts.
This case demonstrates that it is not easy to void a conditional gift provision in a will.
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