Attwood Marshall Lawyers Estate Litigation Senior Associate Martin Mallon joins Robyn Hyland on Radio 4CRB for “Law Talks” to discuss conditional bequests – where a beneficiary must meet certain conditions before inheriting their gift in a deceased estate.
Some Will-makers aim to maintain control over their assets, and perhaps their family members, even after their death. Yet, this desire for control isn’t without its inherent problems. Here, we delve into common conditions people choose to include in their Wills, and whether a beneficiary can challenge the condition to receive their inheritance.
What is a conditional bequest?
A conditional bequest is a provision in a Will that distributes an asset to a beneficiary subject to specific circumstances being met.
There are two types of conditional bequests:
- Condition Precedent: In this scenario, a beneficiary must meet certain conditions to receive their inheritance. If a beneficiary fails to meet the condition(s), the gift will fail. A typical example of a conditional precedent is when a Will-maker specifies that a beneficiary will receive their benefit from the estate upon reaching a certain age, such as 21 years old.
- Condition Subsequent: Here, a beneficiary initially receives their benefit from an estate. However, if a specific event happens that benefit can be revoked. For example, a Will-maker might include a condition that the beneficiary receives a family heirloom, such as a family bible, as long as they remain active in the deceased’s faith.
While conditions in Wills can be acceptable in certain circumstances, they may lead to contested disputes over the validity of the clause or the interpretation of the document. They can also create challenges for executors and the intended beneficiary. These disputes frequently arise when a Will-maker uses a “do it yourself” Will kit or homemade Will.
To illustrate this point, Justice Sanderson M in the matter of Brant v Murray [2016] WASC 390 opined that:
Over the years I have made countless statements in judgments bemoaning the fact testators seem to think they can adequately deal with their estate by way of a homemade will. Really there is nothing left to say on the topic. This case reinforces again the difficulties which so frequently arise. What should have been a simple grant of probate to give effect to a straightforward disposition of a small estate requires the intervention of the court.
To put it another way, Justice Sanderson echoes the importance of engaging an experienced estate planning lawyer to draft your Will to ensure your plan aligns with your wishes and that the plan is legally enforceable.
Parenting from the grave: examples of conditions in Wills
1. Get a job and contribute something to society
In June 2022, a story broke about a heiress living on welfare benefits because she was blocked from receiving her inheritance due to a conditional gift contained in her late father’s Will.
The deceased died leaving behind a $12 million estate, and Clare Brown, the beneficiary, was the sole heir to her father’s fortune, as her mother had passed away before her father, and there were no other surviving children.
The deceased drafted a Will leaving his daughter his entire estate conditional on her satisfying two key clauses.
One clause stipulated that Clare had to get a job. The second clause required Clare contribute something to society.
Clare claimed that she was unable to secure and maintain a job because she was discriminated against due to her sexual orientation and her diagnosis of ADHD and high-functioning autism.
The executors of the estate were determined to uphold the deceased’s wishes and withheld Clare’s fortune until she was able to “tick the two boxes”. The executors contended that Clare needed a “wake-up call” and that she could “access all the money” if she satisfied the two conditions.
Instead of securing paid employment or volunteering on an unpaid basis, Clare filed proceedings against her father’s estate to obtain her inheritance.
At the time of writing, there are no accessible court records relating to Clare’s application or the outcome of her case. Based on the media reports, Clare likely filed an application in court challenging the validity of the conditions on the basis they were uncertain, impossible or against public policy. Alternatively, Clare may have sought relief via a Family Provision Application.
2. Convert to a religion
In the case of Hickin v Carroll (No 2) [2014] NSWSC 1059, Mr Carroll died on 16 April 2012. He was survived by his four children, three of whom were from a relationship with a former spouse. Mr Carroll’s last Will was dated 15 December 2011.
The Will contained a provision leaving 35.88% of the residue of his estate to his four children subject to satisfying two conditions, namely that they attend his funeral and be baptised into the Catholic Church within three months from the date of his death.
The Will stipulated that if the children failed to meet the two conditions, their gifts would be void and be divided equally between the remaining residuary beneficiaries.
Background
The four adult children were baptised as Jehovah’s Witnesses in the 1960s, following their mother’s baptism as a Jehovah’s Witness in 1950, after she separated from Mr Carroll who was a Roman Catholic. Following separation, the children continued living with their mother and remained active in their congregations.
This issue enraged Mr Carroll his entire life, and he objected to his former spouse’s and children’s membership in that faith.
Following Mr Carroll’s death, and despite the conditions in the Will, the children attended their late father’s funeral but failed or refused to his request to become a Roman Catholic, either before the expiration of three months after Mr Carroll’s death or since that date.
Issues in dispute
The issues in the case were the proper construction and effect of gifts in the Will to Mr Carroll’s children, whether the gifts were conditions precedent or subsequent and if the said clauses were void.
One of the children with the support of her siblings sought relief in the Supreme Court of New South Wales seeking a declaration that the conditions attached to the gifts in the Will were void and of no effect and that the gifts were absolute.
The applicant argued that the court ought to declare the condition requiring children to be baptised as a Roman Catholic to receive their benefit under the Will to be void for the following reasons:
- The clause was so uncertain that proper construction could not be determined;
- It was impossible for them to be baptised within three months unless there was a serious reason or an emergency;
- The condition discriminated against the grounds of their religion and that it promoted discord within the family in a way that affronted concepts of universal human rights and freedoms. Accordingly, the children argued the condition offended public policy to miss out on receiving their inheritance because of the malice decision by their father to discriminate against them based on religion.
The decision
In determining the question of uncertainty, the court referred to the decision of Justice Farewell In Re Evans; Hewitt v Edwards 1940] Ch 629 where it was established that “a person becoming a convert to the Roman Catholic faith must do definite acts and must be admitted into the Roman Catholic Church.” On this basis, the court was not persuaded that the act of being baptised as a Roman Catholic was clear, not uncertain.
On the second argument, the court held that notwithstanding the practicalities of converting to Catholicism may have been difficult for the children to do within the set 3-month time limit, it was not impossible. Therefore, the condition was not void for impossibility.
Lastly, the court determined that the conditions in the Will did not impinge upon the free exercise of the children’s religion and did not compel the children to do anything. They were given a choice. But that choice had a consequence and impacted their eligibility to receive the gifts under the Will.
Based on the court’s judgment, the children failed to meet the conditions and the deceased’s wishes were upheld.
As a result, the portions of Mr Carroll’s estate that would have gone to his children had they met the conditions outlined were instead divided among the other residuary beneficiaries in accordance with the alternative gifts.
3. Get married
This one may be seen as “misguided parenting”, but the following clause is something many estate planning lawyers have seen parents include in their Wills:
“I leave my entire estate to my son, but only if he gets married before he turns 30 years old”.
Now, a clause like this may face scrutiny in Australia.
A general restriction of marriage has been found by the court to be unenforceable (see Re Brown; District Bank Ltd v Brown [1954] Ch 39). There are reported cases where a court has upheld gifts conditional upon marrying a certain person.
The example above could be considered a clause against public policy, impossible (depending on the circumstances), repugnant or otherwise unenforceable.
This type of clause would likely not have made it into a Will if the Will-maker had sought legal advice on the relevant legislation that regulates Wills and testamentary freedom, and perhaps the lawyer could have suggested some alternative strategies to put in place if the Will-maker was concerned about their son’s family circumstances. The courts are usually aware of societal norms and one would think that given the acceptance of different types of relationships, ‘getting married’ would not be something that would necessarily be upheld if challenged.
4. Do as I say
There are often requests in Wills about how the Will-maker wants their remains to be handled. Sometimes these are intertwined with gifts to beneficiaries.
Here’s an example:
“I bequeath 50% of my estate to my dear friend, John Smith, under the condition that he scatter my ashes at Disneyland. The bequest will be void if John fails to fulfill this request within six months of my passing.”
This condition would be considered “a violation of law” simply because it is strictly prohibited and potentially illegal (although difficult to enforce such laws) to scatter ashes at places like Disneyland.
Although someone may want to do everything in their power to honour their late loved one’s wishes, if it goes against the law, the condition is unlikely to be enforceable, and the individual would likely still receive the gift left to them.
Conditional bequests – valid vs invalid
When a dispute arises over a Will, a court will typically be reluctant to go against the testator’s last wishes and are inclined to uphold a conditional bequest except in certain circumstances.
These circumstances include:
- where the condition violates the rule of law,
- where it is uncertain or impossible to fulfil a condition,
- where the condition interferes with a parental duty,
- where the condition is repugnant or otherwise inconsistent with the rest of the Will,
- if the condition is designed to intimidate or threaten beneficiaries, or
- if the condition is contrary to established public policy.
In navigating the world of conditional bequests, it’s essential to recognise that while courts generally respect a testator’s wishes, nuanced circumstances exist that may lead to the reconsideration of conditional bequests.
Attwood Marshall Lawyers – experts in estate litigation
Attwood Marshall Lawyers is proud to have a highly experienced estate litigation team that practices exclusively in Will disputes and Succession Law. Our team is available to help people understand their rights in estate disputes.
For trusted advice from an expert estate litigation lawyer, please contact our Estate Litigation Department Manager Amanda Heather on direct line 07 5506 8245, email aheather@attwoodmarshall.com.au or free call 1800 621 071.
Our team are available for appointments at any of our conveniently located offices at Robina Town Centre, Coolangatta, Southport, Kingscliff, Brisbane, Sydney, and Melbourne.
