Deathbed gifts, also referred to as donatio mortis causa, is a legal principle dating back to the Roman Times. The ‘mechanism’ allows individuals to make gifts which can only be received or take effect after their demise. This does not include the provision of the individual’s Will or the intestacy rules.
Are deathbed gifts ‘legally valid’?
In order for a deathbed gift to be valid, several conditions need to be satisfied – conditions which have been reviewed and developed over the course of several hundred years. However, Lord Justice Jackson has summarised three key requirements which constitute a ‘legally valid’ deathbed gift:
- The individual making the gift must be aware of his/her impending death (such as a life-threatening disease or illness)
- The gift must clearly be conditional upon the individual’s death occurring (e.g. Ben’s gift can only be received after his demise and not before)
- The individual making the gift must deliver “dominion” over the content or subject matter of the gift.
Let’s explore these three key conditions in a little more depth:
While there’s no pressing or urgent need for the individual’s death to be 100% inevitable, there must be reasonable grounds to anticipate their death perhaps in the near future from a known illness, risky operation or action, or a journey considered perilous and dangerous – otherwise referred to as an ‘identifiable cause’. Because an individual simply approaching the end of their natural lifespan does establish grounds for making a deathbed gift to someone.
It’s interesting to note Lord Justice Jackson’s decision in case of the first condition – where he once commented on a case regarding a deathbed gift – taking into account the fact that the individual making the gift had reasonable opportunity to seek advice and make a will to ensure that his wishes remained intact. He (Justice Jackson), therefore, stated that the first condition had not been satisfied.
The deathbed gift can be revocable or ‘recalled’ at any point during the individual’s lifetime – the one making the gift, that is. Furthermore, if death does not occur due to identified cause and instead simply due to inevitability, then the gift automatically becomes invalid. If the individual making the gift does not make use of conditional wording, the court may infer that wording under the right circumstances, as they did in 1991’s Sen v Headley case.
In the above case, Lord Justice Jackson concluded that “dominion” refers to physical possession of:
- A subject matter or content
- Means or channel of accessing the subject matter or content (a key to a box, e.g.)
- Documents which clearly serve as evidence to entitlement/possession of the subject matter or content
One final requirement is that the individual making the gift must be mentally sound in order to make the deathbed gift. However, with all things said, the standard requirement for making deathbed gifts ultimately depends on the subject matter or content of the gift.
Are deathbed gifts legal in the UK?
Rather than outright declare deathbed gifts as ‘legal’ or ‘illegal’, we’re going to instead provide a synopsis of two well-known cases where deathbed gifts were claimed:
In the 2017 Keeling v Keeling case, the claimant demanded an alleged deathbed gift to be set aside.
Ellen Exler, the deceased, was 91 years old at the time of her demise and had no surviving spouse or children. Stephen Keeling (the Defendant), Frank Keeling (the claimant), and her deceased sister’s children were the rightful heirs to her estate, which was valued to be around £1M, where the ‘subject matter’ was mainly a house.
Stephen Keeling sought the help of a legal firm to gain access to letters of administration. About 4 months following Ellen’s demise, Stephen notified the other beneficiaries that the house had been gifted to him by Ellen as a deathbed gift – which did legally pass to him while bypassing the rules of intestacy.
In the Davey v Bailey case, 2021, the court concluded that none of the alleged deathbed gifts met the legal requirements even though the individual making the gifts (Margaret) during her lifetime was contemplating her inevitable death from cancer. The court further argued that Margaret did not intend for the gifts to be made at the time of her death and Margaret’s wishes were to have a new will incorporated after her demise. Furthermore, the subject matter/content of the gift was not specified and no dominion was granted to the Claimants – effectively rendering the second and third condition as ‘failed’.
Closing thoughts on deathbed gifts
Deathbed gifts have generally had a long-standing history of disputes, as often individuals set to receive the donor’s estate tend to challenge the validity of the gift which might reduce their inheritance. As such, deathbed gifts often prove to be troublesome – in fact, they spell more trouble than they are worth, and in no away a substitute for a well-planned and drafted Will.
However, one might argue their case for a deathbed gift if the three key conditions have been met. So, to conclude, deathbed gifts can be claimed if:
- The gift is made in contemplation of death – meaning the donor must anticipate imminent death due to an illness or an action which may result in untimely death – what we referred to as ‘identifiable cause’ earlier. However, there’s no legal requirement for the donor to be in a hospital for this purpose or for death to occur (no matter what) in order for the gift to be received.
- The gift has to be made with the intention that it will pass to the recipient upon their death only and not during their lifetime.
- The gift is to be given physically either by the donor or by an ‘agent’ authorised by them.
There are numerous risks and caveats associated with deathbed gifts and it is, therefore, always a good idea to speak to an attorney to better understand if you can rightfully claim a deathbed gift. In any eventuality, deathbed gifts may yield a lot of value if acquired through the appropriate legal means, or just spell more trouble than anything else at the end of the day. Your legal counsel can advise you according to your individual circumstances.
In any case, it is always best to consult an accountant to fully understand tax implications on gifts.