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:
it violates a rule of law (most often because it is uncertain
or impossible to satisfy)
it is contrary to public policy
The Supreme Court of NSW considered both points in Hickin v
Carroll & Ors (No 2)  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
"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.
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.
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.
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)  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.
There are several requirements that must be completed by an executor before the distribution of assets to beneficiaries.
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