Setting Conditions on Your Child’s Inheritance: A Guide from a Nevada Estate Attorney

When planning your estate, you have options for how to leave an inheritance to your child. The simplest approach is to give them a lump sum without restrictions. However, this may not be suitable for every situation. Concerns about financial responsibility, the potential misuse of funds, or the desire to protect a minor can prompt you to consider setting conditions on their inheritance.

Why Consider Conditional Gifts?
Estate planning allows you to control who receives your assets, when they receive them, and under what conditions. This control can be extended beyond your lifetime through conditional gifts. These gifts ensure that your child receives their inheritance only after meeting certain criteria. This can help shape their behavior, protect them from financial mismanagement, or align their use of the funds with your values.

Types of Conditional Gifts
There are two primary types of conditional gifts:

• Condition Precedent: The inheritance is given only when the beneficiary meets a specific condition, such as reaching a certain age or achieving a milestone like graduation.
• Condition Subsequent: The inheritance is given unconditionally but can be revoked if the beneficiary fails to meet ongoing requirements, such as remaining sober or avoiding debt.

These conditions can be tailored to fit various goals, such as incentivizing education, ensuring financial responsibility, or encouraging involvement in a family business.

Examples of Conditional Gifts
Parents might set conditions such as:

• Requiring a child to graduate from college before receiving their inheritance.
• Setting up staggered payments at different life stages, such as marriage or buying a home.
• Tying distributions to specific achievements, like a high GPA or volunteer work.
• Protecting a child with substance abuse issues by requiring them to remain sober.

These conditions can help ensure that your child uses their inheritance in a way that aligns with your intentions and supports their long-term well-being.

Legal Considerations for Conditional Gifts
While you have considerable freedom in setting conditions, there are legal limitations. Courts may not enforce conditions that are illegal, vague, impossible to meet, or against public policy. For instance, conditions that require a beneficiary to divorce or marry within a specific religion may be challenged and potentially voided.

To ensure that your conditions are legally enforceable, it’s crucial to phrase them clearly and consult with a Nevada estate attorney. They can help you draft conditions that are fair, reasonable, and in line with the law, reducing the risk of disputes or legal challenges.

When to Consult a Nevada Estate Attorney
Whether you’re setting up an estate plan or are a beneficiary with questions about conditional gifts, legal guidance is essential. An experienced Nevada estate attorney can help you navigate the complexities of conditional gifting, ensuring that your wishes are honored and your family’s future is secure.