Conditional Gifts in Wills Part 3 – The Ultimate Gift
Jason leads an exceedingly comfortable yet ultimately shallow existence, until his billionaire grandfather Howard ‘Red’ Stevens, from whom Jason was estranged, passes away and leaves Jason an inheritance. The catch? Jason must complete 12 separate tasks within a year in order to receive it, which in other words is known as a condition precedent.
Below are some examples of the tasks Jason had to perform:
- The Gift of work, whereby he is required to go to Texas to work on his grandfather’s friend’s ranch for a month, to learn what it is like to work for his income;
- The Gift of money, where on his return from Texas he discovered his car, all of his money and his luxury apartment is taken away and he is left homeless, to learn the value of money and how to use it wisely.
- The Gift of friends, which required him to form a friendship with someone who accepted him without his money.
- The Gift of giving, where he was required to travel to Ecuador and study in the library that his father and grandfather built to help the people there.
Jason could potentially make an argument that these tasks were vague or uncertain, as who’s to say whether or not he has formed a true friendship with someone who does not care for his money, or whether he’s learnt the value of money. However, as we know from Parts 1 and 2 of this series, given we’re dealing with a condition precedent, if the condition is voided by the Court then the gift would fail also and he would receive nothing.
On another note, Red would have wanted to take care to ensure that the wording of this gift was sufficiently clear to ensure that there was no ambiguity regarding his intentions that the gift was not to take effect unless Jason completed the 12 tasks.
If such ambiguity existed and a Court had to refer to extrinsic evidence regarding Red’s intention, then there is a risk that a Court may find that Red’s intention was that Jason’s inheritance was not conditional at all. Such a finding is illustrated in the case Hibbitt v Ziade (2022) NSWCA 904, where the beneficiaries inherited a multi-million dollar residence under the Deceased’s Will under the following clause:
‘I give the rest and residue of my estate to my trustee….to hold my residence at Tennyson Point together with all personal effects contained therein to Mrs Hibbitt and Mr Hibbitt or the survivor of them in return for caring for my two cats’.
The Court found that it was not the deceased’s intention to make the gift conditional on the beneficiaries caring for her two cats. As such the Hibbitt’s inherited the residence unconditionally and the fate of the cats is unknown.
The main takeaway from this series?
- Make sure you consult a solicitor or specialises in Wills and Estates when it comes time to write or update your Will;
- Consider the conditions you are placing on any gifts under your Will and whether your main priority is to ensure your beneficiaries receive their inheritance or if you’re willing for that inheritance to fail should they not meet the conditions you set or because the condition-precedents are found to be void.
If you have any questions about your situation you can reach out to our experienced team for advice.
Disclaimer: The information contained in this article is provided as general information only. It is not intended to be legal advice and it should not be used or relied on as legal or professional advice.
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