Conditional gifts in a will: can I make my bequest conditional?

For a person deciding on who should inherit from their Will, questions of how much beneficiaries will receive and in what shares are important. These decisions can be made more difficult if, for example, there are particular concerns about a beneficiary or a perceived need for encouragement to achieve something. As a consequence, the Will-maker may wish to make a bequest conditional.

What is a conditional gift?

Many gifts in a Will simply allow the recipient the gift of money or other assets outright once the Will-maker has died. A conditional gift is one which the recipient will only receive if a condition in the Will is met. If the beneficiary fails to meet the terms or requirements of the condition, then the gift will be void. A common example would be the need for a child to reach a certain age before inheriting. That said, some conditions will not be acceptable and void themselves. So, for example, a condition preventing the beneficiary from selling a house that had been left to them absolutely would not stand.

The illustrated case outlined below provides a recent example of a conditional gift where the wording was ambiguous, and its meaning had to be determined by the NSW Supreme Court.

Illustrative Case: Hibbitt v Ziade (2022) NSWSC 904

In this case, the deceased woman had been pre-deceased by her de facto partner and had two cats. She lived in a multi-million dollar residence valued at several million dollars at Tennyson Point, Sydney.

In her Will, she had sought to leave the house at Tennyson Point to the persons she wanted to care for her two cats, Bonnie and Clyde, after her death. However, how the relevant clause was worded led to uncertainty about its meaning. The clause in the Will stated as follows:

‘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 interpretation of the conditionality regarding the gift led to the Will dispute that found its way to the Supreme Court. It was argued by the Executor of the Will that there was a condition precedent to the gift of the residence to the effect that the Hibbitts had to continue to care for the cats until both of them had died, and only then would the Hibbitts be entitled to taking possession of the residence left to them.

The Court needed to consider if the clause was sufficiently clear as to what the deceased had actually intended. A number of issues were evident. As a matter of practicality, what was the expected standard of care, and where and for how long did the cats need to be cared for? If the Hibbitts were not to take possession of the property straight away, did the deceased really intend that the Executor would hold the property in trust until both cats had died? This could be many years. Was the gift of the house conditional upon the recipients caring for the two cats, or were the Hibbitts meant to inherit the house absolutely, and it was merely a wish of the deceased that they cared for her cats?

The Court ruled the clause was sufficiently ambiguous to allow it to consider extrinsic evidence as allowed by the Succession Act 2006. This evidence included statements from her friends and, with particular relevance, contemporaneous notes from the solicitor who prepared the Will. The solicitor had expressed concerns about the ambiguity of the provision but the deceased insisted it should remain as it was as she trusted her friends to whom she was leaving the property.

The Court determined that the deceased did not intend to make the gift of the house conditional upon caring for the cats. The Court decided that the requirement to care for the deceased’s cats did not have to be met for the beneficiaries to receive the house. It ruled in favour of the Hibbitts, giving the house unconditionally to them. The Court did not accept the counter argument put forward because of the practical difficulties this would have caused and a preference for an immediate, rather than deferred, vesting of a gift.

In general, this case demonstrates the need for the wording of a conditional gift to be carefully drafted to minimise the chances of a dispute over what it really means in terms of reflecting the true testamentary intentions of the deceased.

More specifically, for those anxious about what might happen to their pets after they die, the case illustrates the importance of ensuring that any provision relating to their pets' future care is carefully drafted.

What does it mean?

A person can set down conditions in their Will as long as they do not conflict with other laws or public policy. However, ambiguous, uncertain or ‘impossible’ conditions in a Will might be void or be subject to challenge.

If an individual tries to include conditional gifts in their Will where the conditions are too stringent or unlikely to occur, those who they would have liked to inherit could end up with nothing.

A gift with too many conditions attached can easily become confusing and difficult to administer.

Including a conditional gift in a Will without taking appropriate legal advice may lead to misunderstandings and misinterpretation, causing the gift to fail or not achieve the desired goal.

On the other hand, they can be a useful way of retaining an element of control over assets left in a Will. If it is wished to include conditions attached to a gift in a Will, it is important to seek advice on its appropriateness and legal effect.

Contact our Wills and Estate Lawyers based in Sydney, NSW

Szabo & Associates Solicitors can advise on all aspects of writing a Will and challenging a Will. Please contact us on 02 9281 5088 or fill in the online contact form.