Although parents can be highly creative and detailed in structuring conditional gifts, their freedom to impose terms is limited.

In general, courts will not uphold conditions that are illegal, uncertain, unreasonable, impossible, or contrary to public policy. Here are some guidelines parents should consider when they create conditions for their children’s inheritances.

• A beneficiary should not be asked to engage in activity that breaks the law or is unconstitutional.
• The conditional gift should be executed in clear and precise language. If there is doubt about what actions need to be taken—or refrained from—for the condition to be satisfied, the court could declare the condition void.
• There must be a chance that the beneficiary can satisfy the condition. In part, a court’s determination on this matter is based on the circumstances of the beneficiary and the context of the gift.
• Conditions that violate public policy are not illegal per se. Instead, they are deemed to harm the public welfare because they are unfair or unreasonable. Historically, many courts have voided on public policy grounds conditions that restrain a person’s right to marry or incentivize

The way courts interpret a conditional gift based on public policy is not always obvious and can be very fact-specific. It may come down to precedent from past cases and judicial discretion.

Some courts, for example, have refused to enforce conditions contingent upon a beneficiary getting divorced, but enforced marriage conditions based on age and marrying within the same religion. Public policy also varies to some degree by state, so a conditional gift ruled invalid in one state may be found valid in another state.

Ask an Estate Planning Attorney Questions About Conditional Gifts

Parents and children do not always see eye-to-eye—in life or in death. Each may have questions about conditional gifts in an estate plan that may be best answered by a discussion with an attorney.

For parents, as long as the conditions you set are in the best interest of your child, phrased appropriately, and do not contravene public policy or the law, the court should uphold them. On the other hand, if a condition is unclear and left open to interpretation, even the best-meaning condition can lead to a lengthy and costly court proceeding that undermines your intent.

Beneficiaries may question if a condition is legally valid or if they have satisfied it, or take issue with how a trustee is managing the trust for them. Faced with seemingly unreasonable conditions, they may need to raise a legal objection to receive their inheritance.

These issues tend to be personally sensitive and legally complicated, involving not only family dynamics but also state law and court decisions. Whether you are a parent setting a conditional gift or a child receiving one, our estate planning attorneys can help you understand your rights, obligations, and options.