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Conditional gifts

Business in Wills

Business in Wills

Here we examine conditional gifts made within gifts in a will to ensure we understand how these work. In essence a condition may be a condition precedent or a condition subsequent depending on the wording of the clause.

Also conditions will be deemed to be void in the following circumstances;

a) If they are against public policy or illegal;
b) Repugnant to the interest given to the beneficiary or other gifts or provisions in the will;
c) Too uncertain to perform;
d) Impossible to perform;
e) Made against the beneficiary ‘in terrorem’.

Therefore in this paper we will consider the differences in condition precedent or a condition subsequent and look at the types of conditions and see which will fail and which will be valid in a will.

A gift may fail if it has been made subject to a condition and the condition has not been satisfied. Conditions are classified for this purpose as either precedent which has not been satisfied. Conditions are classified for this purpose to be either precedent or subsequent. A condition precedent (sometimes termed ‘suspensive’) is a condition which has to be satisfied in order for the beneficiary to take the gift.

An example would be if Arthur leaves all his property to his son provided the son erects a monument in Arthur’s memory, the condition is precedent: Arthur does not wish his son to take the legacy unless he erects an appropriate monument.

The most common condition precedent in practice is the requirement that a beneficiary should have obtained a certain age, whereas a conditional subsequent, on the other hand, acts by way of defeasance: the beneficiary initially takes the gift, but loses it subsequently if he fails to satisfy the condition.

Therefore an example would be if Arthur leaves everything to his son providing he does not join the Midshire Hunt. This condition is subsequent and the gift vests in his son, but divests if he breaches the condition i.e. by going on the ‘Midshire Hunt’.

Although different conditions are either precedent or subsequent is clear in theory, it may sometimes be difficult in practice to determine to which category a condition belongs. The question is one of construction: the court must construe the testator’s intention expressed in the will.

However, where the condition requires that something be done which may take considerable time, the condition is more likely to be considered subsequent because of the law’s preference for early vesting. The courts in general prefer in cases of doubt to hold a condition to be subsequent as was seen in Re Greenwood (i).

This raises the question does it matter whether a condition is precedent or subsequent?

First, the consequences of failing to satisfy the condition differ: if a condition precedent is not satisfied, the beneficiary receives no benefit at all, whereas with a condition subsequent the beneficiary takes the gift, but loses it perhaps long afterwards by breaching the condition.

Secondly, different consequences follow when the condition itself fails, i.e. if it is illegal, or contrary to public policy, or uncertain or impossible to perform. An example of impossibility was seen in the case of Watson v National Children’s Home (ii), in this case the testator had placed a condition that an intended beneficiary should care for the testator’s pets. In this case it was held by the court to be void due to the impossibility since the pets had predeceased the testator.

The general rule is if a condition precedent is void, the gift itself falls into residue or passes under the rules of intestacy. But if a condition subsequently becomes unconditional, so that he cannot be divested of it.

Thirdly the conditions subsequently must be expressed with greater precisions than conditions precedent; thus the latter are less likely to fail for uncertainty. Uncertainty is the ground on which conditions are most likely to fail. As regards to a condition precedent, the requirement of certainty is satisfied if the condition is sufficiently clear to enable the condition. In Re Allen (iii) a gift conditional on the beneficiary being ‘a member of the Church of England and adherent to the doctrine of the Church’ was held not to be void for uncertainty.

In the above mentioned case Lord Evershed MR stated, ‘All that the claiming devisee has to do is at the relevant date to establish, if he can, that he satisfies the condition or qualification whatever be the appropriate test….I am not persuaded that where a formula constitutes a condition or qualification void for uncertainty so as thereby to defeat all possible claimants to the gift unless the terms of the condition or qualifications are such that it is impossible to give them any meaning at all, or such that they involve repugnance’s or inconsistencies in the possible tests which they postulate, for example, from mere problems of degree.’

The approach has been consistently followed in subsequent cases. In Re Selby (iv) the testator provided that no beneficiary benefits under his will ‘who shall have married, or who before, or on attaining a vested interest shall marry out of the Jewish faith shall take any interest or benefit under this my will’. The court held that the condition (which was held to be precedent) was not void for uncertainty since membership of the Jewish faith was a sufficiently defined concept to enable the court to determine in many instances whether a particular claimant satisfied the condition.

On the other hand, in Re Tarnpolsk (v), gifts made to the testator’s grandchildren on the condition of their marriage to a ‘person of Jewish race’ were held to be invalid since it was impossible to say whether or not a given person satisfied the condition.

In regards to conditions subsequent, a greater degree of certainty is requested in their delineation, as explained by Lord Cranworth in Clavering v Ellison (vi). ‘Where a vested estate is to be defeated by a condition on a contingency that is to happen afterwards, that condition must be such that the court can see from the beginning, precisely and distinctly, upon the happening of what event it was that the preceding vested was to determine.’

Although a greater degree of precision is required for a condition subsequent than for a condition precedent. The court has the right to judge the degree of certainty ‘with some measure of common sense and knowledge and without excessive astuteness to discover ambiguities’ as stated by Lord Wilberforce in Blathwaryt v Baron Cawley (vii), where a condition divesting any potential tenant for life if he became ‘a Roman Catholic’ was held not to fail for certainty. Similarly in Re Mill’s (viii) a condition that beneficiaries should forfeit their gifts unless they were ‘a member of the Church of England by virtue of the Act of Uniformity 1662 (ix).

Examples of conditions that have been held to fail for uncertainty are numerous: a few must suffice. In Re Jones (x) a provision whereby a beneficiary was to forfeit half of her annuity payments if in the opinion of trustees she had a ‘social or other relationship’ with a certain named person was held to be void for uncertainty.

In Clayton v Ramsden (xi) was concerned with a condition whereby a gift was forfeited if the beneficiary married a person ‘not of Jewish parentage or of the Jewish faith’. The House of Lords was unanimous in holding that ‘Jewish parentage’ was too uncertain and the majority also decided on the same in regards to ‘Jewish faith’.

However, in Re Tepper’s (xii), it was held that the phrase ‘within the Jewish Faith’ (or ‘outside’) in a condition subsequent was not necessarily too uncertain. Extrinsic evidence of the relevant surrounding circumstances was admissible to show the meaning that the testator attributed to the ‘Jewish faith’ when making his will.

The difference in the degree of certainty required for conditions precedent and subsequent is clearly demonstrated by Re Abrahams. In this case the testators will contained a condition in clause 18 of the will divesting a beneficiary of residuary estate in the event of his remarrying a person who shall not profess the Jewish faith’.

In clause 17 of the same will stated the beneficiary could take an additional gift if he married ‘a person professing the Jewish faith’. The court held that the condition subsequent in clause 18 was void for uncertainty, but that the condition precedent in clause 17 was sufficiently certain. Thus the same phrase was sufficiently certain for one purpose but not for the other. Justifying his decision to uphold the condition precedent, Cross J stated, ‘In some cases, no doubt there may be difficulty in saying whether the person in question is professing the Jewish faith or not, and it is because of that possibility that the condition subsequently in clause 18 is void, but I do not think that the expression ‘professing the Jewish faith’ is meaningless. One can say of some persons that without a doubt they process the Jewish faith. It would, for example, be absurd to say that one could be sure whether the Chief Rabbi was a person professing the Jewish Faith.

A condition is deemed to be void if the condition is deemed to go against public policy and it is in the interest of the state that this condition should not be performed, example of this type of conditions are seen below,

1) A condition inciting a beneficiary to commit a crime,
2) A condition requiring a beneficiary to exert their influence in a political manner,
3) A condition tending to induce the future separation of a husband and wife,
4) A condition in total or virtual restraints of marriage. Partial restraints, for example a condition prohibiting a person’s marriage with a papist or a Scotsman, have been allowed. If the purpose of the condition is not to restrain marriage, but to provide for the donee until marriage, then the condition is allowed.

Therefore a clause in the will stating ‘my son will receive his legacy on the condition he cannot marry anyone who is not born in the UK’ will be deemed void under the public policy title as this will be seen as a restraint on  marriage.

It is also worth remembering that certain conditions may be void against the legatee if made as a ‘threat’ to induce him to comply with the condition. This rule does not apply to freeholds, or to legacies charged on freeholds, or to personality directed to be paid out in the purchase of land.

The court may, however, avoid the question of the validity of such words by construing them not as a condition but as limitation or a trust (see Page v Hayward (1705) (xiii)). Examples of such a construction include the following examples:

1) A gift to a person so long as that person remains (xiv),
2) A gift subject to marriage with consent (xv),
3) A reduction of an annuity on marriage (xvi),
4) A proviso against alienation (xvii).

The court held that the forfeiture clause in Nathan v Leonard (xviii) which would only take effect if the will is challenged by a beneficiary which was not held to be contrary to public policy. The argument was advanced that the condition could not stand because its effect to deter an applicant from a making a claim under the Inheritance (Family Provision for Dependants) Act 1975 for fear of losing the benefit given to him by the will.

Although it should be remembered the court agreed that effect of the clause was to make such a claim less likely under the above act, it did not prevent an application making his claim. The application remained free to do so and, if he did, the court would take the lack of provision in the will into account when determining whether or not to make an award.

Conclusion

What we have seen in this paper is the effect of drafting conditions in regards to gifts in wills can have adverse effects and we now know what we can and what we cannot do. However we have also established that depending on what type of condition which is drafted into the testators will the condition will be either a condition precedent or a condition subsequent.

The way the condition is structured is also very important as this will have an impact on how the condition will work, i.e. is it against public policy or is simply impossible for the beneficiary to perform what is asked of them.

The question which has to be then addressed is will this condition result in the will being examined by the courts?

If so will the clause be deemed to be valid or not? An example of such a clause could be ‘My son inherits all my land of (200 acres) on the condition that nobody with the surname of Campbell walks on the land’.

This condition is simply impossible to actually achieve as the beneficiary would never be able to enforce this due to the impossible nature of how could the beneficiary actually police this condition and enforce it.

Therefore when clients ask to restrict gifts in their wills we need to look and examine if these conditions will actually work in the eyes of the law.

i Re Greenwood [1903] 1 Ch 749 CA
ii Watson v National Childrens Home (1995) The Times 31/10/1995
iii Re Allen [1953] Ch 810, CA
iv Re Selby WT [1965] 3 All ER 386
v Re Tarnpolsk [1958] 3 All ER 479
vi Clavering v Ellison (1859) 7 HL Cas 707; 11 ER 282
vii Blathwaryt v Baron Cawley [1976] AC 397
viii Re Mill’s WT [1967] 2 All ER 193
ix Act of Uniformity 1662
x Re Jones [1953] Ch 125
xi Clayton v Ramsden [1943] AC 320
xii Re Tepper’s
xiii Page v Hayward (1705) 11 Mod Rep 61
xiv Webb v Grace (1848) 2 Ph 701
xv Fry v Porter (1670) 1 Mod Rep 300
xvi Brown v Cutter (1683) 2 Show 152
xvii Newis v Lark (1571) 2 Plowd 408)
xviii Nathan v Leonard [2002] EWHC 1701, [2003] 1 WLR 827

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