Manipulating the Conduct of Beneficiaries with Conditional Gifts
Gerry W. Beyer
Texas Tech University School of Law
2012
Estate Planning Developments for Texas Professionals, October 2012
Abstract:
Clients have a strong desire to transfer the fruits of their lifelong efforts upon death to the individuals they prefer. Though not constitutionally protected, this ability is often viewed as a right, rather than a mere privilege. See Irving Trust Co. v. Day, 314 U.S. 556, 562 (1942) (“Rights of succession to the property of a deceased, whether by will or by intestacy, are of statutory creation, and the dead hand rules succession only by sufferance. Nothing in the Federal Constitution forbids the legislature of a state to limit, condition, or even abolish the power of testamentary disposition over property within its jurisdiction.”). Although the Texas legislature and the courts are unlikely to eliminate this privilege, they often get involved when a client attempts to place restrictions on what the beneficiary must do or not do to receive the offered bounty.
Some conditions are relatively benign such as a provision requiring property to be held in trust until the beneficiary reaches a specified age. However, testators and settlors may use conditions to control or influence nuances of the beneficiary’s behavior. For example, a testator left his house and $30,000 to his wife on the condition that she smoke five cigarettes per day for the rest of her life to get even for her distain of his practice. See Widow Fumes at Order to Start Smoking, SAN ANTONIO EXPRESS-NEWS, Sept. 10, 1993, at 6A. Will the court force a beneficiary to engage in a dangerous habit to receive the property? If not, would the wife get the property free of the condition or would the property pass under other provisions of the testator’s will? What about a will provision providing $500 per month for the police officer who gives the most traffic tickets to motorists for double-parking? Dead Man Had Will, Way to Get Double-Parkers, WASH. POST, Aug. 25, 1998, at A2.
This article explores conditional gifts and focuses on how to increase the likelihood that the court will enforce the conditions.
Some conditions are relatively benign such as a provision requiring property to be held in trust until the beneficiary reaches a specified age. However, testators and settlors may use conditions to control or influence nuances of the beneficiary’s behavior. For example, a testator left his house and $30,000 to his wife on the condition that she smoke five cigarettes per day for the rest of her life to get even for her distain of his practice. See Widow Fumes at Order to Start Smoking, SAN ANTONIO EXPRESS-NEWS, Sept. 10, 1993, at 6A. Will the court force a beneficiary to engage in a dangerous habit to receive the property? If not, would the wife get the property free of the condition or would the property pass under other provisions of the testator’s will? What about a will provision providing $500 per month for the police officer who gives the most traffic tickets to motorists for double-parking? Dead Man Had Will, Way to Get Double-Parkers, WASH. POST, Aug. 25, 1998, at A2.
This article explores conditional gifts and focuses on how to increase the likelihood that the court will enforce the conditions.
Number of Pages in PDF File: 4
Keywords: conditional gifts, wills, Texas, estate planning
JEL Classification: K11
Accepted Paper Series
No comments :
Post a Comment