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Monday, August 9, 2010

What do you mean, I can't do that?

A Will is used to instruct your executor on how to deal with your assets and liabilities after you have passed away. There are some legal obligations that you must meet, such as looking after a spouse, minor children and handicapped children. Once they are taken care of, there are plenty of new options, including giving to charities, giving to friends, and looking after pets.

For most people, deciding on what they can do in the Will is not really a problem. However, probems can arise if a testator wants to rule from the grave, or to use his or her Will as a personal soapbox. Testators can think of infinite ways to try to control the behaviour of those left behind, but not all of these ideas are legal, logical or for that matter, logistically possible.

Here are some of the things you cannot legally do in your Will:

1. You can't control what happens to something after you give it away. For example, you can't leave money to your son and tell him to spend it on a house. Once he owns it, he can spend it on whatever he wants.

2. You can't give away joint property that you own with someone else, because the joint owner will have a right of survivorship that overrides the Will.

3. You can't set up a trust in which the principal lasts forever and only the income is paid out (unless you're leaving it to a registered charity).

4. You can't impose a condition on a gift that is impossible for the recipient to do or control.

5. You can't leave a gift that is so vague that nobody really knows for sure who you are leaving it to, or how much the gift is supposed to be.

6. You can't leave someone a gift on a condition that would require the recipient to commit a crime to meet the condition.

7. You can't leave a gift that is conditional on someone leaving their spouse, or that is conditional on them not marrying (so if you don't like your kids' significant others, you can't do anything about it in your Will).

8. You can't leave someone a gift on a condition that would require them to discriminate against someone on the basis of race, creed or nationality to meet the condition.

I've seen other clauses in Wills that may or may not be legally enforceable, but are definitely not realistic. For example, I recently saw a Will in which a person would only receive the gift if he or she stopped smoking, and if he/she resumed smoking within two years, the gift would have to be repaid. How would an executor ever deal with that? How long does the person have to quit smoking before he or she is considered to have quit? And if he or she smokes only one cigarette within two years, does that mean he or she has resumed smoking? What if nobody knows for sure but only suspects? If the money is paid out, how is the executor supposed to get it back? Is it meant to be held in trust for two years? And even if it were to be paid back, what happens to it?

If you want to do something unusual in your Will, it's a good idea to do some research, or better still ask an estate-planning lawyer, to be sure that it's something legally enforceable and realistically possible.

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