A Gift with Strings Attached: What Happens When a Condition in a Will Is Not Met?

A parent may want a child to remain involved in the family business.  A spouse may be permitted to live in a property provided they pay certain expenses.  Someone may receive shares only if they continue making payments to another family member.

A will can make a gift subject to conditions.  But those conditions need to be drafted carefully.

A recent NSW Supreme Court decision shows that a beneficiary may not always be able to fix years of non-compliance by offering to catch up later.

What happened in Glass v Tsivis?

In Glass v Tsivis [2026] NSWSC 1166, the will dealt with valuable shares connected with a family business.

Under the arrangement, the deceased’s business partner was to hold the shares on trust for the deceased’s two siblings during their lives.  She was required to ensure that they received an annual benefit of $300,000, paid in fortnightly instalments.

After both siblings died, the business partner would become entitled to the shares for herself, but only if she had fully complied with the payment obligation.

The required payments were not made.

After several years, it was argued that the missed payments could be remedied by paying the arrears and meeting the obligation in the future.

The Court disagreed.

The intended benefit was not simply the eventual receipt of a particular amount of money.  It was regular financial support provided throughout the siblings’ lives.  One sibling had already died without receiving that intended support.

The surviving sibling’s life interest remained effective.  However, the business partner’s future entitlement to the shares was conditional upon full compliance with the payment obligation, and that condition had not been satisfied.

Because the will did not contain an effective alternative gift dealing with that outcome, the shares would ultimately fall into the deceased’s residuary estate after the surviving life interest ended.

Can every missed condition be fixed later?

No.  The answer depends upon the language of the will and the purpose of the condition.

Some obligations may be capable of late performance.  A fixed payment made shortly after its due date may still achieve the intended result, depending on the terms of the will.

Other obligations depend upon timely or continuing performance.  A later payment may not recreate years of missed financial support, care or access to property.

Relevant questions include:

• What exactly must the beneficiary do?
• When must performance begin?
• Is the obligation continuing?
• Is timing an essential part of the arrangement?
• Can a default be remedied?
• Who decides whether compliance has occurred?
• What happens to the asset if the condition is not satisfied?

 
If the will does not answer these questions, the executor and beneficiaries may be left with a costly dispute about what the will means.

Conditional gifts involving businesses require extra care

Conditions involving company shares or family businesses create additional risks.

The will may need to operate alongside:

• a shareholders’ agreement;
• the company constitution;
• insurance arrangements;
• buy-sell provisions;
• restrictions on transferring shares;
• dividend policies; and
• the deceased’s broader business-succession plan.

 
A condition may appear workable when the will is signed but become commercially difficult after the owner dies.

For example, receiving shares does not necessarily give someone the money needed to meet a substantial payment obligation.  The company may not declare dividends, or the recipient may not control its cash flow.

Estate-planning advice should therefore consider both the legal wording and whether the arrangement is likely to work in practice.

How can the risk of a dispute be reduced?

A carefully drafted will should address:

1. the precise obligation attached to the gift;
2. when and how it must be performed;
3. whether timing is essential;
4. the evidence required to establish compliance;
5. whether late performance is permitted;
6. any grace or cure period;
7. the consequences of partial or temporary non-compliance;
8. the executor or trustee’s powers; and
9. who receives the asset if the condition fails.

 
Regular estate-plan reviews are also important.  A condition drafted years earlier may no longer suit the family, the asset or the business.

What should executors do?

An executor dealing with a conditional gift should avoid making assumptions.

Before transferring the asset, the executor may need to:

• review the precise wording of the will;
• obtain relevant payment and corporate records;
• identify the purpose of the condition;
• determine whether a default can be cured;
• identify everyone whose entitlement may be affected; and
• obtain advice about whether the Court’s guidance is required.

 
Transferring the property prematurely may expose the executor to claims from other beneficiaries.

The bottom line

A conditional gift can help a will-maker achieve a particular purpose. It can also create serious uncertainty if the obligation, timing and consequences of non-compliance are not clearly recorded.

The Madison Marcus Wills & Estates team can assist with complex wills, conditional gifts, business-succession planning and questions arising during estate administration.

This article provides general information only and is not legal advice. The outcome of any matter depends upon the language of the will and the individual circumstances.

Source: Glass v Tsivis [2026] NSWSC 1166, Supreme Court of NSW, 30 September 2026.