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Conditional Gifts

Conditional Gifts. Condition Precedent. Event must occur before beneficiary may claim the gift. “I leave $10,000 to X if she is a law school graduate at the time of my death.”. Condition Subsequent. Beneficiary receives and retains the gift until the condition is violated.

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Conditional Gifts

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  1. Conditional Gifts

  2. Condition Precedent • Event must occur before beneficiary may claim the gift. • “I leave $10,000 to X if she is a law school graduate at the time of my death.”

  3. Condition Subsequent • Beneficiary receives and retains the gift until the condition is violated. • “I leave my house to X but if X is convicted of a crime, then the house goes to Y.” • X has a fee simple subject to a shifting executory interest. • Y has a shifting executory interest.

  4. Validity of Conditions • 1. Statement of Use • Normally, precatory.

  5. Validity of Conditions • 2. Illegal or against public policy purpose • Ineffective.

  6. Validity of Conditions • 3. Personal habits. • Often upheld.

  7. Validity of Conditions • 4. Marriage • Depends on facts.

  8. Validity of Conditions • 5. Divorce • Likely invalid.

  9. Recommendations • 1. Make condition clear. • 2. Provide gift over. • 3. Use a different estate planning technique such as a trust.

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