All About Estates

New Year, New You: A Retrospective of “Self-Improvement” Will Conditions

Today’s blog was co-written with Demetre Vasilounis, Student at Law at Fasken LLP.

As a new year approaches, people often take a moment to reflect on their lives over the past year and determine ways in which they could have improved themselves. Some may try to realize such improvements through new year’s resolutions, which often involve goals such as improving physical fitness, quitting an addictive habit or curbing wasteful spending. The issue with new year’s resolutions, however, is that there is little to no accountability: people often do nothing to penalize themselves if they do not stick to their resolutions.

While having the motivation, as well as the enforcement mechanism, to improve oneself can be difficult, what happens when one tries to convince someone else to improve themselves? Well, under Ontario estate law, one can actually do that, in a way. The main method of doing so is through conditional gifts, or, in other words, estate inheritances that only transfer to a beneficiary if that beneficiary fulfills a certain condition. Unsurprisingly, history has shown that parents are often the ones making conditional gifts in their wills in an effort to improve the behaviour of their children.

Here are some examples of court cases (one as recent as 2005) featuring parents who successfully used conditional gifts to, in their minds, make their children better people:

    • Jordan v. Dunn, [1888] O.J. No. 54: The Ontario Court of Appeal upheld a will where a mother required her son to abstain from alcohol and “card playing” in order to receive an inheritance. The court did rule that the son was able to use alcohol for medicinal purposes.
    • Re Quay (1907), 9 O.W.R. 823: A father ordered that his son refrain from “any form of gambling or games of chance directly or indirectly personally or through an agent or partner”. The Ontario Weekly Court narrowed this condition down to a restraint on gambling as a “livelihood”, and ruled that the son could play games “by way of diversion or amusement” and still keep his inheritance.
    • Re Dewar, [1945] 2 D.L.R. 194: A mother imposed the condition that her son “adopt as his calling the business of a Farmer” in order to inherit her real estate. The Alberta Supreme Court ruled that the son, who was an infant at the time of his mother’s death, could receive the property when he turned 21 years old and fulfilled this condition.
    • Woods Estate v. Woods, [2005] O.J. No. 4678: A mother’s will revoked her third son’s inheritance of their family home because it had a condition that it was to be sold if the son had been convicted of a criminal offence before reaching the age of 21. Unfortunately, the son had been convicted of offences when he was 17 years old, and the Ontario Court of Appeal held that the fact that he was a minor when he was convicted could not prevent the revocation of the gift.
    • Re Kennedy Estate, (1949) 60 Man. R. 1: In addition to banning her from smoking or drinking alcohol, a mother’s will stipulated that her daughter either be unmarried and lead “a good moral life” or be married “to a Protestant husband of good repute”. The will did allow the daughter to access her inheritance despite these conditions if she was “in want or ill”. While the court in this case did not go as far as to define what “in want or ill” meant, it did find all of the will’s conditions valid.
    • Woodhill v. Thomas, [1889] O.J. No. 101: The Ontario High Court did not seem to dispute a provision in a will where a grandfather stipulated that his grandchildren would receive their inheritance provided that they were “not lazy, spendthrifts, drunkards, worthless characters, or guilty of any act of immorality”.

While some of these conditions seem a little outdated or outlandish, it is important to recognize that a testator cannot impose any condition that they please upon their beneficiaries. In the past, Canadian courts have found certain conditions void for:

  • Uncertainty: if a condition lacks the specificity for the beneficiary to properly fulfil it.
  • Impossibility: if a circumstance beyond a beneficiary’s control (such as a law or other third-party limitation) makes it impossible for that beneficiary to fulfil that condition.
  • Impermissibly restraining alienation: if a condition exerts too much control over how a beneficiary may sell or transfer a gift.
  • Impermissibly restraining marriage: if a condition exerts too much control over whom a beneficiary may marry (although courts have allowed some restraint in the past).
  • Contrary to public policy: if a condition could be considered illegal, immoral or against the public interest (such as racially discriminatory conditions).

 

The practice of conditional gifts often sparks a debate: some argue that a testator should have the freedom to decide what makes one worthy of their gifts, while others argue that it can be problematic in many ways if a testator tries to exert too much control from beyond the grave. On one hand, maybe parents should let their children be who they are. On the other hand, maybe if some of the children in these cases made and stuck to some reasonable new year’s resolutions, they would not have had so much trouble accessing their inheritances.

About Maureen Berry
Maureen Berry is a partner in the Trusts, Wills, Estates and Charities group at Fasken. Maureen’s practice is focused on wills, estate planning, domestic and international trusts, private corporation taxation, and executive compensation. Maureen also advises charities and non-profit organizations. Working with Canadian and international families, firms, corporations and charitable organizations, she provides advice on all aspects of private client matters. She is a leading expert in the fields of tax law and estate planning. As an Adjunct Professor at Osgoode Hall Law School, she teaches Advanced Estate Planning. Maureen has previously taught corporate tax and international tax at the University of Toronto and Western University, along with the Bar Admission course for up-and-coming lawyers.

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