Conditional Gifts

Marion v. Davis, 106 S.W.3d 860 (Tex. App.—Dallas 2003, pet. denied).


Testator imposed a condition on all gifts in his will and testamentary trust – the share of any beneficiary who attempts to place Testator’s Wife into a nursing home before all estate assets are exhausted would be forfeited and distributed to the remaining beneficiaries. After Testator died, Beneficiary placed Wife into a nursing home even though there were sufficient funds in Testator’s estate to continue home care. The trial court held that Beneficiary had therefore forfeited his share.

The appellate court agreed. The court rejected various assertions by Beneficiary. First, the court held that the condition was not against public policy. There was no evidence to support Beneficiary’s claim that the estate lacked sufficient funds to care for Wife at home. Second, the court did not think it was relevant that Beneficiary used his authority as Wife’s court-appointed guardian to place her in the nursing home. Third, the court refused to find that Wife, out of necessity, had to be placed in a nursing home merely because a doctor advised Beneficiary to do so. Fourth, the court held that it would be irrelevant even if Beneficiary could prove he acted in good faith when he placed Wife in the nursing home.

Moral: A beneficiary should comply with conditions specified in a will or trust if the beneficiary wishes to receive the windfall.