Conditional Inheritance through Wills and Trusts - The Curry Law Firm, PLLC
Many people often wonder what kind of guidelines and stipulations they can include in their will and trust. While it is the court’s objective to carry out the wishes and intent of a testator (person who made a will) or a settlor (person who made a trust), there are some conditional provisions that will not be upheld by the court. Certain conditional provisions that are not honored are those that go against public policy. Such conditions may negate or limit a person’s inheritance if they marry a person of a certain age, religion, or race. Likewise, rules that surround whether a person divorces and their eligibility for an inheritance, that would otherwise be bestowed to them, is also often invalidated by the court. Another condition that goes against public policy, is a stipulation concerning a recipient’s religion. Such conditions will not be honored if it keeps a beneficiary from receiving an inheritance otherwise left to them.
Furthermore, in light of public policy, although it is uncommon you cannot include an illegal condition or purpose for the gift. This would invalidate either all or part of the will or trust. For example, if you live in a state where marijuana is not legal you cannot bestow land for the purpose of growing marijuana. You can also not incite illegal actions, such as “To Tom, so long as he drinks his first beer before 21 years old.”
Additionally, any rules that would violate rules against perpetuities would not be upheld. Although it is not a simple concept, in short, the rule against perpetuities provides that certain future interest must vest, if at all, within 21 years after the death of a life in being at the time that the interest is created. The purpose of the rule is to prevent a person from drafting any kind of transfer agreement that would control the ownership land for an excessive period of time after one is deceased.
You can include conditions in wills and trust that surround age, education, or (legal) purpose. For example, the trust that my grandmother left me, and my siblings stated that we could not have access to our portion of the trust until we each respectively reached the age of 25, unless for educational purposes. Other examples of conditions that are upheld by the court may include “to Gabrielle so long as he uses the property as a dance studio” or “To Mark, if and when he graduates from college”.
However, it is important to keep in mind that it is more common for gifts/ assets to be distributed through trust rather than wills, considering the nature of wills. Assets from wills are generally distributed soon after death. As such, it is most common for inheritance from a will to be given based on the circumstances at the time. Whereas with trust, they are developed and equipped to hold assets for an extended period of time.
It is also critical to keep in mind the efforts and actions that the executor (person who carries out the terms of the will) or trustee (the person in control of the trust) will have to do in order to manage assets until the set conditions are met. Be specific and think through the reality and various occurrences that may take place. Consider fees and expenses that may incur during the potential timeframe where the assets are in waiting. Establish terms to handle the assets if the conditions are never met or not met within an established period of time. In this scenario, the designated beneficiary may never receive the assets, which may then be distributed to a contingent beneficiary or charity.
When conditional provisions are not well thought out and articulated in a will or trust it creates ambiguity. Such vagueness opens the door for all kinds of litigation between the beneficiary and executor or trustee. This frustrates one of the primary purposes of a will and trust, which is to clearly identify one’s wishes and intent to provide their family and loved with peace of mind without having to guess and fight over assets.
Figuring out the right amount of information to put into a will or trust can be confusing and is a delicate topic. Although courts are not favorable of contingent will provisions, their main priority is to honor the will or trust maker’s intent as best as possible and within the bounds of the law. The attorneys at The Curry Law Firm are here to ensure that your intent is clearly written within the most suitable document and carried out at the proper time. We provide guidance and establish an estate plan that meets your specific situation. If you or a loved one is thinking about drafting a will or a trust, the attorneys at The Curry Law Firm are here to help.