“Everything MUST REMAIN AS IS For posterity.”

Those were the words used by Norma Adel Byrne in her handwritten Will when gifting her home to the Royal Historical Society of Queensland Inc. She directed that the property must never be sold, never be demolished, and be maintained forever in her memory.

Many clients want to attach strings to gifts in their Will. After all, they are our assets, aren’t they? It is perfectly natural for us to fold our ghostly arms and give our hopefully grieving beneficiaries stern directions: keep the family home, do not sell my shares, preserve my coin collection or run my business this way.

The difficulty arises when these wishes are drafted in such a way that they affect the ordinary ownership of the assets being gifted. The law does not generally permit that level of posthumous control. Estate planners often describe this as “ruling from the grave” – the desire to give property away while continuing to dictate how it must be used long after death.

In The Public Trustee of Queensland v The Royal Historical Society of Queensland Inc [2026] QSC 220 (PT v HS), the Queensland Supreme Court was asked to consider whether directions that the deceased’s house “must never be demolished or sold” were legally binding, and whether they were intended as conditions or as mere expressions of wish.

Background

Norma Adel Byrne (Del) died on 13 July 2021. She had never married, had no children and was predeceased by her long-term de facto partner. Before making her final Will, Del had executed a former Will through the Public Trustee in 2004. Under that earlier Will, much of her estate was to be held on trust for various charities (an arrangement that is known as a charitable trust).

Between 2019 and 2020, Del drafted her final Will and revoked her former Will. Her final Will consisted of six informal handwritten pages that were drafted by her alone and written without any legal assistance.

The Will contained several dispositions but only the following three were subject to consideration by the Court:

• a gift of Del’s residence at Seven Hills and its contents to the Royal Historical Society of Queensland Inc (Society);
• a gift of $50,000 from a nominated bank account to the Society “as a trust fund” to maintain and preserve the property; and
• a gift of the balance of the same bank account to the Catholic Archdiocese of Brisbane (Archdiocese) “for the poor and the homeless”.

The gift of her residence to the Society contained express conditions that:

“the house and contents must never be demolished or sold – but made secure and maintained – as is – in memory of myself and kept for posterity”.

Following Del’s death, issues arose because the property was in significant disrepair and the Society intended to sell the property and apply the proceeds for its charitable purposes. The Public Trustee therefore sought directions regarding the proper interpretation of the Will.

The Central Question

The key issue for the Court was whether Del’s directions concerning the house were intended to create a charitable trust or if they were intended to create an absolute gift. If the directions created an absolute gift, then the Court had to decide whether the directions imposed legally binding conditions on the Public Trustee, which would prevent the Society from selling the property.

The Court also had to determine what would happen to the separate $50,000 maintenance trust if the Society was entitled to sell the property and the trust’s stated purpose could no longer be carried out.

Legal Principles

Firstly, a Will is construed in much the same way as any other document.[1] The Court’s role is to determine the meaning of the words used in their context and ascertain the intention revealed by those words.[2] The inquiry is not what the testator subjectively meant, but what the words objectively mean when read in context.[3]

Secondly, a Will must be considered as a whole. Where the document reveals an overall testamentary scheme, the Court should, if possible, adopt a construction that gives effect to that scheme.[4]

Thirdly, particular care must be taken when construing homemade Wills. The Court recognised that informal Wills are drafted in ordinary language, often without legal precision, and should not be approached with undue technicality. Deficiencies that might be significant in a professionally drafted Will may carry considerably less weight in an informal testamentary document.[5]

The Court also reaffirmed the “armchair principle”, which permits consideration of the circumstances known to the testator at the time the Will was made in order to understand the language used.[6]

Was the house gift absolute?

Justice Hindman concluded that the gift of the Seven Hills property and its contents was intended as an absolute gift to the Society, not a charitable trust. The directions concerning demolition, sale and preservation were not legally binding conditions but strongly expressed wishes or desires. The Court then considered the alternative position: even if Del had intended those directions to operate as conditions, they would have been void because they were inconsistent with the ownership conferred by the gift.

When reaching this conclusion, the Court considered several important factors.

Considerations

One of the most persuasive considerations was Del’s own language.

When dealing with the house, Del used the language of “bequeath”. In contrast, when dealing with the separate maintenance fund, she expressly referred to “a trust fund” and “trust a/c”. The Court considered this distinction important because it suggested Del appreciated the difference between making an outright gift and establishing a trust.

The Court noted that Del had previously worked in finance, making it more likely that the difference in language was deliberate.

Additionally, although aspects of the house gift pointed toward preservation, the terms used did not clearly establish a charitable trust. The language more readily suggested an outright gift accompanied by strong expressions of wish rather than a legally enforceable trust obligation.

Finally, the Court regarded the references to sale, demolition and preservation as precatory language.

In other words, they were powerful statements of preference, desire and expectation rather than legally binding requirements. The fact that Del expressed those wishes strongly did not transform them into enforceable obligations.[7] As Justice Hindman observed, courts are generally reluctant to construe a testator’s wishes as imposing conditions where another reasonable interpretation is available.[8]

Conditions on Absolute Gifts

Justice Hindman went on to consider an alternative analysis in the event that the Court’s findings were incorrect and that the requirements for the property not to be sold were, in fact, intended to be binding conditions. In such an event, the Court held that they would still be void.

The law is reluctant to permit an owner to receive property while simultaneously being deprived of the ability to dispose of it. A complete restriction on sale is generally inconsistent with ownership and therefore invalid.[9] Accordingly, any prohibition on sale would be void, and the Society would take the property free of that restriction.

Similarly, a permanent prohibition on demolition was held to be repugnant to the nature of an absolute gift of real property.

An individual or organisation that owns property outright ordinarily possesses the ability to alter, improve, redevelop or remove structures on the land. A restriction removing such a fundamental aspect of ownership would be inconsistent with the grant of full ownership and therefore void.

It is important to note that conditional gifts, in and of themselves, are not automatically void. Conditional gifts are used hesitantly by estate planners, and for good reason. They can be heavily litigated and often their enforceability is only truly determined once the Will winds up before a Court.

A conditional gift may take effect as either a condition precedent or a condition subsequent. A condition precedent must be satisfied before the beneficiary becomes entitled to the gift; if it is not satisfied, the gift generally fails. By contrast, a condition subsequent applies after the gift has vested, meaning the beneficiary receives the gift immediately but may later lose it if a specified event occurs, or fails to occur.

For example, a condition in a Will requiring beneficiaries to convert to Catholicism within three months of the deceased’s death as a prerequisite to receiving a share of the estate has been held to be valid and enforceable by the New South Wales Supreme Court, with the consequence that the gifts failed when the beneficiaries did convert to Catholicism within the stipulated timeframe.[10] The critical distinction between that matter and PT v HS is that a condition requiring a beneficiary to convert to a specific religion effectively only determines whether the beneficiary becomes entitled to the gift; it does not confer absolute ownership and then attempt to control the property indefinitely.

The $50,000 Gift

Unlike the house gift, the maintenance fund was not framed as an absolute gift. Del expressly described it as a trust fund and specified a particular purpose: maintaining, securing and preserving the property and its contents.

However, there was a problem. Once the property was sold by the Society, the purpose of maintaining and preserving the property could no longer be achieved. So what was the point of the trust? And if the trust was void, what would happen to the funds?

Justice Hindman concluded that the trust’s purpose could not be fulfilled once the property was sold. From the terms of the gift, the Court inferred that Del would have preferred the trust to fail rather than have the money applied to a different purpose. The maintenance trust therefore failed.

The Court concluded that the consequence of the trust failing was simply that the relevant bank account was not reduced by the $50,000 gift. The balance therefore remained available to pass under the separate gift made in favour of the Archdiocese.

Justice Hindman considered this outcome consistent with Del’s overall charitable intentions. The original trust had itself been charitable in nature, and the Court inferred that Del would have intended the funds to remain devoted to charitable purposes if the maintenance trust could not operate.

Conclusion

The decision is a reminder that there are real limits to testamentary control after a testator dies. As much as we may want to rule from beyond the grave, the law will push back. And while we are perfectly within our rights to insert various hoops for our beneficiaries to jump through in order to become entitled to our assets once we have died (within reason – conditional gifts can be complex, risky and have their own set of rules in order to be considered legitimate and binding by a court), the law is hesitant to allow us to try to control how those assets are used or how our beneficiaries must behave.

Courts will generally treat such directions as expressions of wish rather than binding obligations. Even where a condition is intended, if it goes so far as to dictate indefinitely how an asset is to be dealt with, it will usually fail as an unlawful restraint on ownership or because it is repugnant to the nature of the gift itself.

The law prioritises ownership. Once property is given away absolutely under a Will, a testator’s ability to control its future use is inherently limited.

[1] Roberts v Pollock [2019] QSC 184 at [33].

[2] Ibid.

[3] McDermott v McDermott [2023] QSC 163 at [24].

[4] Fell v Fell (1922) 31 CLR 268 at 273-274 ; Perpetual Trustee Co Ltd v Wright (1987) 9 NSWLR 18 at 3.

[5] Barnes v Pope [2023] NSWSC 685 at [30].

[6] Public Trustee v Kuehn [1983] 1 NSWLR 195 at 196.

[7] Re Frigo [2017] QSC 81 at [27]-[28], [31].

[8] Re Tooth (2020) 5 QR 246 at [23].

[9] Hall v Busst (1960) 104 CLR 206 at 217.

[10] Hickin V Carroll (No 2) [2014] NSWSC 1059.

Benjamin Kett
Solicitor

Rights to reside and life interests can often be mistaken as interchangeable estate planning strategies and understandably so. On the surface, they appear to be almost identical. Both are created by the terms of a deceased’s Will. Both create a temporary interest that allows a surviving spouse, partner or family member to remain in a home after the testator’s death without transferring actual ownership. Both are used to preserve real property for their remaining beneficiaries.

However, they operate in very different ways, and the choice between them can affect tax outcomes, beneficiary rights and estate administration. For that reason, understanding how each option works, what rights they create and when they should be used is critical when drafting a Will.

What is a Right to Reside?

A right to reside allows a person to live in a particular property for a specified period or until a particular event occurs, without giving them ownership of the property. It is limited to occupation only, in the sense that the beneficiary may live in the property but does not receive broader rights to sell it, rent it out or otherwise deal with it as an owner.

Whether a clause creates a right to reside depends on the wording of the Will and the intentions of the person who made it. In most cases, wording that allows someone “to reside” or “to live” in a property will be interpreted as giving them a personal right to live there, rather than a proprietary interest.[1]

Because it is a personal right, it generally cannot be transferred to someone else. The right will often end when the occupant permanently leaves the property, dies, or another event specified in the Will occurs.

What is a Life Interest?

Instead of simply giving a person permission to live in a property, a life interest gives them a recognised interest in the property itself for the duration of their life. The person holding the life interest is entitled to use and enjoy the property during their lifetime but does not own it absolutely.

A life interest only arises when there is clear and unambiguous provision in a Will expressly stating the testator’s intention to grant a proprietary interest for life.[2]

What’s the Difference?

Life interests and rights to reside are often used in blended family estate planning. A testator may want to give a surviving de facto spouse long-term housing security, while still ensuring the property ultimately passes to their children. On the surface, both mechanisms may appear to achieve that outcome. In practice, however, they create very different rights and very different risks.

The key distinction lies in the scope of the rights conferred. A life interest creates a proprietary interest, whereas a right to reside creates a personal right. It is difficult to define these powers in a strict sense as they are wholly dependent on the terms of the Will which gives them life.

Generally speaking, a life tenant will generally have broader rights than the holder of a mere right to reside. Those rights may include occupying the property, receiving income from it or otherwise dealing with their limited interest. A right to reside is narrower in scope. It is directed to personal occupation, not broader control or economic use of the property.

The events that bring each arrangement to an end are also important to consider. A right to reside can be drafted to end on death, remarriage, failure to pay rates or outgoings or if the beneficiary permanently stops living in the property. By contrast, a life interest will generally only end when the beneficiary dies or willingly surrenders the interest. This can operate as both an advantage and a disadvantage. If a dispute arises between the beneficiary granted the interest and the remainder beneficiaries who will ultimately receive the property, a life interest may provide greater certainty and enforceability than a right to reside, which is slightly easier to terminate.

Interestingly, whereas a right to reside can be drafted so that it ceases to exist upon the beneficiary failing to pay rates or to maintain the property, the failure of a life tenant to comply with a similar maintenance condition does not automatically result in a forfeiture of the life interest (though enforceable equitable obligations may arise).[3] Testators wishing to ensure that a property is kept in good condition for their remaining beneficiaries after the death of the holder of the life interest may therefore prefer the option of a right to reside for this very reason.

Further, the surrender of a life interest can create its own complications. If a life interest is surrendered, the ATO treats that surrender as the disposal of a CGT asset, which may give rise to capital gains tax consequences.

The Hidden Pitfall: Land Tax and Life Interests

Land tax is where the distinction between a right to reside and a life interest can become especially important. Although the issue is often overlooked during estate planning, the consequences can be significant once the estate is being administered.

Section 23 of the Land Tax Act 2010 (Qld) provides specific rules for land held within a deceased estate. Where land is owned by an executor or trustee when land tax liability arises, the executor may request that the Commissioner of State Revenue assess the relevant beneficiaries as though they were the owners of the land.

Importantly, a “relevant beneficiary” includes a beneficiary who has an interest in the land. A life tenant possesses a recognised interest in land and is treated as an owner for land tax purposes. As a result, a beneficiary holding a life interest may become the person assessed for land tax in respect of the property.

By contrast, a mere right to reside generally does not constitute an interest in land. Because the right being transferred is personal rather than proprietary, the holder of a right to reside will not ordinarily fall within the same land tax provisions and would not be assessable for land tax in respect of the property.

Where a right to occupy is granted, the estate bears the land tax liability.

The Income Tax Problem

A life interest will also produce vastly different tax outcomes that a right to reside.

A life interest is recognised for tax purposes as a CGT asset in its own right; whereas a right to occupy is not.

The key taxation difference occurs where the arrangement comes to an end early.

If a life interest is surrendered early, the surrender is treated as the disposal of a CGT asset. The life tenant may realise a capital gain based on the proceeds received for the surrender – or if no proceeds are received, based on the market value of the life interest.

If a right to occupy is surrendered early, in contrast, no taxation consequences typically arise.

Which is Better?

The answer is that both mechanisms can produce a similar practical outcome, but they do so in very different ways. The drafting choice should therefore be driven by the client’s objectives, the intended beneficiary’s circumstances, the nature of the property and the tax and administration consequences that may follow.

The best option will always depend on the individual facts of each estate. However, in most cases, a carefully drafted right to reside will be simpler and more flexible than a life interest. It is easier to manage from an estate administration perspective, carries fewer tax consequences and is arguably less likely to result in a dispute between the holder of the right to reside and the other beneficiaries of the estate.

Life interests can be cumbersome, inflexible and administratively demanding. For that reason, many estate planning practitioners prefer a well-drafted right to reside where the objective is simply to give a beneficiary housing security without creating unnecessary complexity.

Key Takeaways

When drafting a Will, the choice between a right to reside and a life interest should never be treated as a matter of terminology. Although both arrangements may allow a beneficiary to remain in a property without granting legal ownership, they create fundamentally different legal rights and can produce very different legal, tax and practical outcomes.

Careful drafting is essential. A clause intended to provide simple occupation rights can inadvertently create a proprietary interest if worded incorrectly, while a deliberately created life interest may carry taxation and administrative consequences that should be considered in advance. Understanding the distinction helps avoid unexpected liabilities, reduce the scope for disputes, and ensure the Will gives proper effect to the testator’s intentions.

[1] Stevens v McGrath and Kane [2004] QSC 138.

[2] Ibid.

[3] Nomchong v Vey-Cox [2019] NSWSC 1072.

Benjamin Kett
Solicitor