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Conditional Inheritance

A Manhattan millionaire hit the headlines recently by leaving his daughters $10 million each – as long as they attain certain life goals.

Mr Laboz left several conditions in his Will with the effect that if his daughters attend an accredited university, land a good job, marry well and do not have a child out of wedlock they will receive their full inheritance. His lawyers claim that he included these conditions as an attempt to ‘instil certain values’.

Although rare, such conditions in Wills are nothing new. Back in 1807 an Englishman left his estate to his wife and daughter on the condition that they did not marry a Scotsman and this provision was upheld in court.

These cases might raise the question of the extent to which someone can control beneficiaries from beyond the grave in Scotland. Generally speaking you are free to impose conditions on the gifts you make to your beneficiaries, with some important exceptions. For example, the condition cannot be illegal, immoral or uncertain - i.e that the wording is vague or open to interpretation.

However even if you leave a precise condition which is largely unobjectionable - for example that a certain sum is to be spent on a holiday - it is important to consider who will be able to enforce such a condition and for how long. In addition that person may be disinclined to do so without some sort of incentive.

It is also important to bear in mind the Scottish concept of legal rights. This means that people are unable to disinherit their spouses and children completely. The surviving spouse and children are able to renounce any bequests and instead claim a certain amount from the deceased’s estate. So if the Laboz case took place in Scotland, the daughters would be able to turn down their father’s legacy, with all strings attached, and instead claim a portion of his moveable estate which they could enjoy as they wished.

Tessa Till - Partner

To find out more about Wills or estate planning, email Tessa or call 0131 624 6814.

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