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Tuesday, October 19, 2010

Are you putting conditions on the gifts in your Will?

Wills are known to be an expression of a testator's wishes. Unfortunately, this general definition leads some testators to believe that they can put pretty much anything in the Will as a wish. For example, I've heard testators express that beneficiaries can only inherit from them if the beneficiaries "dump" a spouse that the testator doesn't like, stop smoking for two years, or never live outside of Canada.

Not all of the wishes that a testator would like to include in his or her Will are valid. These conditions that a testator would like to impose are intended to control how the beneficiary uses a gift. While it is not unlawful to include some conditions on gifts, there are rules that the testator has to follow if he or she wants that gift to be legal.

This is a complex area of law that has been considered in courts right across Canada, but I've distilled much of it to some rules that those of you planning your Wills can take into consideration:

1.  A condition must be stated clearly so that there is no doubt about what you mean. Using words like "etc" and "other" are dangerous because they are open to interpretation. One fellow's Will said that a gift would be void if the beneficiary engaged in "social or other relationships" of a certain kind. That was held by the court to be too uncertain to be valid.

2.  A condition can't be impossible for the beneficiary to do or control.

3.  A gift can't be held onto "in perpetuity", i.e. forever,  unless it is given to a charity.

4.  A gift can't be given on the condition that the beneficiary commit a crime.

5.  A gift can't be given on the condition that a husband and wife must separate.

6.  A gift can't impose an unreasonable restraint on the beneficiary's ability to marry.

7.  A gift can't be given on the condition that a parent lose custody or control of a child.

8.  A gift can't be used to avoid the provisions of dependents' relief laws.

9.  A gift can't be made on the condition that the beneficiary must discriminate against others on the basis of race, creed or nationality.

10.  It is alright to include a condition that a beneficiary must reach a certain age before he or she inherits.

This is a very general list. If you want to impose a condition on a beneficiary, I would advise you to talk to an estate planning lawyer about it. Remember that if the condition you impose violates these rules in some way, it might be held as void, after being battled out in court. Also, where something is unclear, the court may construct the meaning the way it feels it best, which may not be the way you intended. So, don't try this at home!

2 comments:

  1. Hi Lynn,

    Is it possible to execute a will now that provides a gift for my child who will be born after the will is executed? Thanks for your help!

    B

    ReplyDelete
    Replies
    1. Hi B.

      Yes, certainly. The law is clear that a will "speaks from death". This means that the provisions in the will are followed when the testator dies, and not when he signs (executes) the will. These days, wills are often signed years before a person dies, and all of the changes made in their lives after execution of the will are covered by the will.

      Lynne

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