You spend your life working hard and saving. You gain assets, and then when you die you distribute them to your friends and family as you wish through your Will. In some cases you will have very precious assets like a family home that you built or invested a lot of time and money into maintaining, and you might want your children to be able live there but you might not want the house to be sold. So the question is, do you have any control over something once you give it to them in your Will?
This is a short piece designed to give you some more information about leaving a conditional gift in a Will and how they can work.
What is a conditional gift in a Will?
A conditional gift in a Will is a provision that distributes money or property to a person but only if an event takes place. For example, you might for example leave $10,000 to a grandchild but only if they graduate university.
- A conditional gift such as leaving something to someone once they reach a certain age is relatively straightforward.
- Conditional gifts in a Will other than age-limited gifts do need to be carefully worded, so it is important to seek legal advice if you are thinking of leaving a conditional gift in a Will.
How do I put conditions on a gift?
Including a conditional gift in your Will can be complicated depending on the type of property or asset you are leaving and the condition upon which you are gifting it. And there are some situations in which you cannot leave a conditional gift.
You might, for example, wish to leave a portion of your estate to a family member on the provision that a person does not do something with the estate, like sell it. Unfortunately, once you have given a person something, it then becomes their property and they are free to do as they wish with it.
The best way to put conditions on a gift in your Will is to get expert legal advice. Your lawyer will able to tell what kind of conditions you can include in your Will.
Is there a downside to leaving a conditional gift in my Will?
You have the ability to leave your assets to whomever you wish, on the conditions you see fit. The major problem with doing this is that you can't foresee the future needs of your beneficiaries. Trying to control an asset after you have passed away means that your beneficiary may not be able to use the asset for something they really need.
Your children may run into financial difficulty or may need to go into a nursing home and need money for their care. The asset you have gifted conditionally is not able to be used for any purpose other than that which you have specified, which can be problematic for your beneficiaries.
Is there another way to leave an asset to someone?
There are other ways to leave assets to people while still having a level of control over how the assets are managed. For instance, you might like to set up a Testamentary Trust Will. A Testamentary Trust holds your assets secure and cannot be accessed by creditors or divorcing partners.
- Testamentary Trusts are a way to protect your assets and reduce overall tax paid by your beneficiaries.
- They are not foolproof but are an effective way to provide for your beneficiaries.
It is also worth noting that depending on the structure of the Testamentary Trust, managing the Trust may be a burden on the Trustee. But in some cases, a Testamentary Trust is a good option. We can help you work out whether a conditional gift in a Will or a Testamentary Trust may be a better choice.
Contact Rose Lawyers today for Will and Estate advice
At Rose Lawyers, we can help you work out what type of conditional bequests may be best suited for your estate. We are here to ensure that your Will is accurate, up to date and that it contains all the conditions that you want it to.
Get the peace of mind you need about your Will and contact us today on 03 9878 5222.