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19 May 2015 Ruling from the grave: What conditions can you place on gifts in your will?

By Angela Harvey, Partner and Will Kingston, Graduate at Law


In Brief

Some people find it hard to 'let go'. In 1993, a resident of San Antonio in the United States passed away, leaving his house and $30,000 to his wife. However, this was not as warm a matrimonial gesture as it first appeared. The husband had included a clause in his will making receipt of the gifts conditional on his wife smoking five cigarettes a day for the rest of her life, in response to her disdain of his habit.
 
That particular clause could not be upheld. Nonetheless testators are generally quite free to impose conditions on gifts in their wills. In many instances these conditions are sensible. For example, we often draft requests for gifts to be given to a relative when they reach a certain age.   


Limits on conditional gifts

Courts are generally reluctant to deny a person's testamentary wishes. The courts will try to uphold both conditions precedent (where an event must occur before a beneficiary can receive a gift) and conditions subsequent (where a beneficiary loses a gift they have already received if an event later occurs). A condition will not be upheld where:

  1. it violates a rule of law (most often because it is uncertain or impossible to satisfy)
  2. it is contrary to public policy

The Supreme Court of NSW considered both points in Hickin v Carroll & Ors (No 2) [2014] NSWSC 1059.

Hickin v Carroll & Ors (No 2)

Patrick Carroll (Patrick) died on 16 April 2012 having made his will on 15 December 2011. Patrick was survived by his four children and bequeathed gifts to them in his will, on the following condition:
 
"subject to and dependent upon them becoming baptised in the Catholic Church within a period of 3 months from the date of my death and such gifts are also subject to and dependent (sic) my children attending my funeral".
 
Patrick's ex-wife and the childrens' mother was a practising Jehovah's Witness. All four children were baptised as Jehovah's Witnesses and Patrick remained staunchly opposed to their association with the faith until his death. Whilst each child attended the funeral, none of them chose to be baptised in the Catholic Church. After the three month period lapsed, one of the Children sought a declaration from the Supreme Court that the conditions in the relevant clause were 'void and of no effect' and that the gifts were absolute gifts. After determining that the relevant clause was a condition precedent, the Supreme Court had to resolve whether the particular clause was uncertain, impossible to satisfy or contrary to public policy.
 
Uncertainty
A condition precedent will not fail for uncertainty merely because it is not completely clearly expressed. The children argued that the relevant clause did not specify a particular Catholic denomination and that the concept of 'baptism' was open to interpretation. The Court held that it was clear that the children could have satisfied the 'baptism condition' by receiving the Roman Catholic sacrament of Baptism.
 
Impossibility
The Court followed the longstanding interpretation of 'impossibility' as meaning more than just 'difficulty' or 'improbability'. Whilst the Children contended that it would have been highly difficult to arrange to be baptised in the specified three month window, the Court disagreed that it would be an impossible task.
 
Public Policy
The strongest argument that the Children submitted was that the condition was contrary to public policy to the extent that this should take precedence over freedom of testation. They contended that the relevant clause should either be void per se as a matter of public policy or, if not, contemporary circumstances gave rise to an as yet unrecognised principle of public policy. The Court disagreed with their submission. The Court ruled it was bound by the decision in In Re Cuming; Nicholls v Public Trustee (South Australia) [1945] HCA 32, that held that a clause restraining religion was only contrary to public policy if it limited the parental right to raise a child in a particular faith. The clause here did not infringe upon the right of the children to exercise their religion freely. The Court also noted that outside the sphere of employment, there is no general protection under Commonwealth law from religious discrimination.

Should you use conditional gifts?

We recommend thinking twice before including quirky or peculiar conditions in a will. Whilst Patrick's condition was upheld, in many instances the courts will be unwilling to uphold a condition on public policy grounds. If you do wish to place a condition in your will, it is essential that you speak to an experienced solicitor who can draft the condition effectively.

For further information, please contact:

Angela Harvey, Partner  |  Phone: +61 2 9233 5544  |  Email: axh@swaab.com.au

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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