Central Coast Law Oct. 20, 2017

It is quite common for people to want to attach conditions on an inheritance they leave to their children. You might, for example, be concerned about your child’s spending habits or a substance abuse problem. Adding conditions to your will and estate plan can help your kids use the money and assets they receive more responsibly.

You might find it easier to put conditions on your children’s inheritance through a trust. This way, you will have a trustee in charge of distributing the assets. The trustee can determine whether your child has met the conditions specified in your estate planning documents.

For the most part, courts will honor your intent as much as possible when it comes to conditional gifts. However, there are some rules regarding the conditions you can put on the gifts you leave behind to your beneficiaries. A court will, for example, invalidate any provisions or conditions that encourage any immoral or harmful act, or an act that could harm society at large.

Below are a few common examples of conditions added to wills or trusts—and how a court would likely view them:

  • Keeping a spouse out of a nursing home: Some clients include stipulations in their wills or trusts stating that money from the estate must be used (at least in part) to keep a spouse out of a nursing home. Courts would generally uphold such a restriction.

  • Marriage and religion: There is also some cases where courts have allowed people to leave conditions in their wills and trusts that only people who marry within their religion can inherit assets. The same is true for preventing people from marrying members of a particular religion—while uncouth, it is lawful. Generally, though, courts do not view these restrictions favorably as they restrict the beneficiary’s fundamental or constitutional rights.

  • Substance abuse: Individuals who have children with a history of substance abuse problems commonly attach conditions to their wills or trust assets. The restrictions may state that the child will only inherit assets upon completion of a substance abuse treatment program and a period of sustained sobriety. Courts generally allow these conditions.

  • Spendthrifts: Clients whose children have difficulty managing money properly are amongst the most common restrictions that clients place in their wills and trusts. These restrictions might state that the child will only inherit a certain amount of money (or percentage) per month, quarter, or year in an effort to help keep the child from squandering the inheritance. These types of restrictions are completely legal.

  • Age: Parents may also stipulate that a child can only inherit property upon reaching a certain age. Or, they may state that a child will inherit a certain amount of money spread out over a defined period. Doing so is completely legal.

To learn more about the process of adding conditions to your will or trust, meet with an experienced estate planning attorney at Central Coast Law.

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