It’s important to give careful thought to who should inherit what from your estate, how much, and how to divide it up. If you have doubts about a beneficiary’s responsibility with the inheritance, it can make things more complicated.
You may wish to maintain some authority over your assets after your death for a variety of reasons, including a second marriage, family disputes, or financially burdened offspring. The flexibility provided by a conditional gift can be useful in these situations. As useful as they can be though, they can become a source of difficulty if not examined with due diligence.
What Is A Conditional Gift?
Many gifts made in a will simply allow the beneficiary to receive their money or other assets outright after you die. A conditional gift is one that the recipient will receive only if a specific condition is met.
Conditional gifts are also known as “contingent gifts” because they are dependent on the occurrence of the specified contingency.
Common Conditional Gifts
Many people choose to leave money to minors only after they reach a certain age. This could be as young as 18, 21, 25, or any other age.
Another reason to make a conditional gift is if the beneficiary is family by marriage so you may wish to leave them a gift subject to them still being married to your relation at the time of your death.
With any conditional gift, you should always consider the possibility that the condition will never occur, as well as how you would like the gift to be distributed if the condition is not met.
There are numerous reasons why someone might want to make a gift conditional, and the appropriateness and terms of such a gift are highly dependent on personal circumstances. It is always best to seek legal counsel before including a conditional gift in your will.
Advantages Of Conditional Giving
Because they consider potential outcomes, conditional gifts do give you more say after death.
Many parents and grandparents believe their children are less likely to make wise investments with their inheritance at the age of 18 than they would be at the age of 25. Therefore, gifts that are conditional upon the beneficiary reaching a certain age may protect an inheritance.
If your loved one’s marriage is problematic and seems likely to end in divorce, you can prevent your assets from being entangled in the divorce process by making a gift contingent on the beneficiary’s divorce.
Disadvantages Of Conditional Giving
Those you’d like to leave an inheritance to may not receive anything if you try to put conditional gifts in your Will with criteria that are overly stringent or unlikely to occur.
It can be difficult and time-consuming to manage your estate effectively if you leave behind a gift that is subject to too many stipulations.
How can we help?
You should always seek guidance as to the legal ramifications of a conditional gift if you want to preserve any degree of control over your assets. Together, we can make sure the gift is valid under the law and exactly what you want it to be.
If you need assistance drafting a will or ensuring that your assets are distributed as you wish after your death, our attorneys are here to help.
