I am preparing a will with two conditional gifts: one pecuniary legacy conditional on the executor taking up their appointment and a pecuniary legacy to the testator’s sister conditional on her becoming guardian of the testator’s children.
When drafting conditional gifts, is it advisable to expressly set a date for vesting (for example, by specifying that, if the condition is not met the gift will pass to some other person) or can one simply rely on the fact that the perpetuity period is 125 years and one is allowed to wait and see whether a future interest vests in that time?
Also, am I right in thinking that a conditional gift gives rise to a relevant property trust, subject to the fact that, if the condition is met within two years, it will be treated as if that final disposition was the actual disposition?
In both cases they could take up the roles specified even if they are not in the best place to do so. Be that poor Health, suitability, location for Guardian if she’s moved.
The guardian condition could fail if the child, when older perhaps, but still a minor, doesn’t want that person to be their guardian.
It’s similar to why i advise clients against having guardians as trustees as can lead to conflicts of interest.
For the Exor, are they able to instruct a professional, or would that not meet the condition? Meaning they feel they have no choice to act or they wave goodbye to a legacy.
I think that it would be implied in the clause regarding an executor that they are allowed to instruct a professional to advise. Whether they could appoint the professional as their attorney to act on their behalf is an interesting question. I will amend the clause to make the position on both points clear.
Regarding the guardian or executor being incentivised to take up the role even if not suitable to have them act, that is also a sensible point. However, there is some protection offered by the general law regarding who can and cannot act in those roles.
A general or specific legacy given by a testator to his executors, whether under the title of executor or not, is prima facie given to them in that character, and therefore they are not entitled to the legacies if they decline or are incapable of undertaking the office.
This presumption does not apply where the gift is of residue.
Theobald goes on to state: the presumption can be rebutted: (a) if some other motive is expressed, as if the gift is to “my friend and executor”; (b) if the gift is after a life interest; (c) if there is a direction that in the event of the executor’s death before the testator, his legacy is to go to his next-of-kin.
Theobald also confirms that the executor is entitled to their legacy if they “act as executor”. I suggest this is a broad term and would include where the named executor appoints an attorney to obtain the grant, or administer the estate, mindful that such attorney is the executor’s agent and is acting in accordance with the executor’s instructions.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
I very much agree with Leagle Beagle’s thinking on attaching a time limit to a contingent gift: this avoids the risk of a seriously protracted administration period.