IT’S THE THOUGHT THAT COUNTS: MAKING WILLS WITH CONDITIONAL GIFTS

A person making a Will can distribute their estate to anyone they wish and, generally, on whatever terms they deem appropriate. However, a challenge arises when a testator intends to require a beneficiary to do or not do a particular thing before they can receive their inheritance. This is known as a conditional gift.

A common example of a conditional gift is gifting part of your estate to your child once they attain a certain age or only once they attend university. In those circumstances, it is clear that the condition must be met before the benefit is received. This is referred to as a condition precedent. However, a gift will fail entirely if the terms of the condition precedent are found by a Court to be void.

When determining the validity of a condition precedent, the Court will consider whether the condition:
1. Is sufficiently specific;
2. Is impossible to fulfill (not merely difficult or improbable); or
3. Offends public policy (for example, if the condition is illegal or discriminatory).

These considerations become especially relevant where a condition precedent requires something more significant than a beneficiary merely attaining a certain age. For example, in Re Solomon (1946) a gift requiring the beneficiary to marry a woman “of the Jewish faith” failed as it was not sufficiently specific. However in Hickin v Carroll (2014) the condition that the beneficiaries be baptised within 3 months of the testator’s death was held to be valid – despite the fact that the beneficiaries were practicing Jehovah’s witnesses.

It is important to note that the law on conditional gifts does not exist in the relevant succession legislation. Instead, the framework governing conditional gifts is based purely on the outcomes of previously decided cases. This means that the judicial approach to conditional gifts has the ability to change and adapt as societal ideals and norms continually evolve.

Certainly, there are clear risks associated with drafting Wills with conditional gifts. If you do intend to attach conditions to gifts in your Will, we encourage you to seek the assistance of an experienced Wills and Estates solicitor to ensure that any conditions in your Will have the desired effect.

Madeline Crnkovic, Law Student and Paralegal at Zande Law Solicitors, Suite 9, Norwinn Centre, 15 Discovery Drive, North Lakes, is the author of this article, training in the area of Wills and Estates.

The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.