Death bed gifts explained – what they are and why they are a legal minefield

Death is an uncomfortable subject for us all but amidst a global pandemic, many families have found the topic thrust unexpectedly upon them.

And as such, an interest in death bed gifts has risen.

A death bed gift – often referred to as a donatio mortis causa or DMC – is exactly what it says on the tin, a gift given by someone on their death bed.

Unfortunately, with many people finding themselves ‘caught out’ by critical illness during the Covid crisis, there has been a lot more interest in this final act.

So, what exactly is a death bed gift?

Firstly, it should be explained that in the eyes of the law a person should have a will to pass on assets. A will is signed by the maker and in the presence of two or more witnesses who must also attest and sign the will. With such in-depth formalities, a will is a lot less likely to be successfully contested than a last minute gift.

And that is what a death bed gift is. It’s a gift given by someone who is dying to a loved one.

The law accepts that in certain situations, it is not possible to make a last minute will to cover a gift to someone and that a gift can still be effectively made if it satisfies the necessary requirements of a death bed gift.

These are the four essential requirements…

  1. The maker of the gift was contemplating their impending death when the gift was made.
  2. The maker of the gift intended that the gift would only take effect if and when their death occurred and that otherwise it could be revoked.
  3. The maker of the gift delivered the gift to the recipient (by handing over the deeds to a property for example).
  4. The maker of the gift had capacity to do so.

Needless to say, a lot of uncertainty and interpretation surround these four points, especially when a gift is challenged.

There have been many examples in the courts where the gift has not been deemed a valid DMC. These reasons range from the beneficiary’s inconsistent story to the view that the deceased didn’t actually believe they were going to die at the time of giving the gift. There have also been cases where the gift has been invalidated because the deceased had an opportunity to make a will but refused to do so.

That said, some cases are very simple. For example, one involved a close friend receiving a gift three days before the death of the gifter. Before his death she had asked him what would happen to the house and he stated: “The house is yours, Margaret. You have the keys. They are in your bag. The deeds are in the steel box.” This was judged to be a valid DMC.

Also interesting to note is that a cheque to be cashed after death isn’t a valid death bed gift (as the bank will not honour it), and a gift can be revoked anytime before the person’s death – after all, it’s not a contractual promise.

Death bed gifts can be a point of contention for families
Death bed gifts can be a point of contention for families
(Image: Rich Legg)

On the unusual legal subject, Martin Holdsworth, founder and director of IDR Law, said: “The cast iron advice is always to get a will done if at all possible and a DMC is very much a last ditch option as they are very often challenged by those who would have benefited under any existing will.

“We’ve seen DMCs of houses, cars and even pets. Going forward, you can imagine DMCs extending to cryptocurrency accounts and bank accounts. Courts don’t like them as a general rule of thumb.

“There is no doubt that the Covid-19 pandemic lockdown limitations have resulted in more limited access to legal advisors drafting wills – in desperate times, desperate measures have increased with the number of attempted death bed gifts rising in recent times – we have advised several families on claims and defences arising from such gifts.

“Death bed gifts trump existing valid will provisions in relation to the asset gifted – for this reason, the courts have made it very clear in a court judgment given mid-pandemic that they will only acknowledge deathbed gifts if they satisfy a series of strict and narrow requirements.

“Even then, as these death bed gifts are often made by those most vulnerable, challenges to their validity on the grounds of lack of mental capacity and undue influence commonly follow.

“I understand entirely why deathbed gifts are attempted in difficult circumstances, but I would always advocate a quickly prepared professional will should be used whenever possible.”

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