A testator can draft their Will to benefit whomever they like and to phrase these bequests according to whatever clauses they see fit. Sometimes, a testator will attach conditions to a bequest before a beneficiary can inherit: if the beneficiary fails to meet the terms or requirements of the Will, they will not receive or retain their bequest. This legal instrument allows the deceased to keep tighter control over their beneficiaries and their assets after their death but it has inherent problems.
What is a conditional bequest?
A conditional bequest is a provision in a Will that distributes an asset to a beneficiary only under particular circumstances. Conditional gifts may be conditions precedent or conditions subsequent.
Under a condition precedent, a beneficiary must satisfy certain conditions to receive the gift. For example, a beneficiary will only inherit when they reach a certain age. A testator can use a condition precedent to encourage a beneficiary to conform to the testator’s values. For example, a Will may specify that a grandchild receives funds if they graduate from university, or a daughter receives a house upon her marriage.
A condition subsequent is when a beneficiary receives their inheritance, but the asset is revoked if a specific event happens. For example, an adult child must continue to adhere to the testator’s faith to remain in possession of the family Bible.
How to add a condition to a bequest
The wording of a conditional bequest needs to be carefully crafted to minimise the chances of the Will being challenged. An experienced solicitor should draft any conditional clauses in the Will: if the terminology is not carefully considered, the outcome may not accurately reflect the testator’s wishes.
Is it a good idea to make a conditional bequest?
You should consider carefully before making an unusual conditional bequest in your Will. Conditional bequests do give you greater control over the administration of your deceased estate. Testamentary freedom allows you to make your Will according to your wishes. However, courts will not uphold conditions that breach public policy.
A testator cannot predict the future needs and circumstances of their beneficiaries. If a conditional bequest can be received only in limited circumstances, it may be very difficult if not impossible for the beneficiary to inherit. For example, a grandchild may intend to complete a course of study to receive their bequest but may fall seriously ill and be unable to continue.
An alternative is for a testator to establish a discretionary trust in their Will. This option allows a trustee to determine when to disburse the trust assets and to do so in the spirit of the testator’s wishes.
Is a conditional bequest legally binding?
Courts are reluctant to deny a testator’s last wishes and will generally uphold a conditional bequest unless it:
- violates the rule of law;
- is uncertain or impossible to fulfil; or
- is contrary to established public policy.
For a gift to be legally enforceable, the condition must not be in breach of public policy. For example, a gift that is contingent on a beneficiary divorcing their spouse is unlikely to be enforced as it would be considered contrary to public policy.
Some condition subsequent bequests are not binding because they are in conflict with another law. For example, a testator might wish to leave a house to someone on the proviso that they do not sell the property. However, once title to the property transfers to the beneficiary, there is no legal impediment to the new owner selling it. The court may also overturn a conditional bequest if it is impossible to fulfil the requirement in the specified timeframe. However, the court will not interfere if the request is merely improbable or difficult to fulfil.
Case Study
The validity of conditional bequests was considered in 2014 in Hickin v Carroll & Ors (No 2). In this case, the testator bequeathed gifts to his four children in his Will, conditional on them attending his funeral and being baptized in the Catholic Church within three months of his death. While all his children attended the funeral, they were not willing to meet the second condition because they had already been baptized in the Jehovah’s Witness faith. After three months, one of them applied to the court to void the condition of the Will.
The court considered whether the condition precedent was uncertain, impossible or contrary to public policy. The children argued that the clause was uncertain because it was not specific enough as to the particular Catholic Church and the type of baptism. The court found this an unconvincing argument as the baptism condition could be satisfied at any Roman Catholic Church. The court also dismissed the children’s assertion that it was “impossible” to be baptized within the time limit. The court ruled that it was bound to follow existing precedent that clauses restraining religion are only contrary to public policy if they impact on a parent’s right to raise their children in a particular faith. The court also pointed out that there is no federal protection against religious discrimination except in regard to employment.
Contact us if you are considering attaching conditions to gifts in your will or are subject to conditions that appear unfair.
