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Deathbed Gifts - A Way Without a Will?

on Tuesday, 23 November 2021.

COVID-19 has brought into sharp focus for many of our clients, the risk of suddenly falling ill and tragically dying without their chosen beneficiaries inheriting, because they have not prepared a Will.

However, a recent case has cast light on the legal lifeline of Donationes Mortis Causa (DMCs), or 'deathbed gifts', and the approach of the court when considering such claims. DMCs are unique in that they enable a donor to make a valid gift, to take effect on the donor's death, without compliance with the formal requirements of the Wills Act 1837 or the Law of Property Act 1925 (where a gift of land is concerned). DMCs are therefore an important method of gifting, but one which is often overlooked and misunderstood.

A Sad Story

In Davey v Bailey [2021], Alan and Margaret, a devoted married couple, died within months of each other. They had no children and left mirror Wills which were simple, but not well-thought through in that they both left everything to each other with no provisions for who was to inherit from the survivor. Margaret died first and Alan visited his solicitor to draw up a new Will. However, it was not completed before he died suddenly of a heart attack.

On Alan's death, his last valid Will, leaving everything to Margaret, failed as she had predeceased him and his entire estate, including the assets which he had inherited from Margaret, fell to be divided under the rules of intestacy, benefitting only Alan's side of the family. Alan's net estate was valued at approximately £1.1million.

Margaret's Family's Claims

Margaret's sister claimed that Alan had gifted the marital home to her as a deathbed gift. She and her brother also claimed that the couple had gifted them a significant share of their sizeable assets before they died, in contemplation of their deaths.   

The court reviewed the 3 conditions necessary to determine whether the DMCs were valid, as set out by the Court of Appeal in King v Chiltern Dog Rescue [2015]:

  • The gifts must be made in contemplation of impending death (although this may not be 'imminent').
  • The gifts must be contingent on the donor actually dying. The donor has the right to revoke them at any time and if the donor makes an unexpected recovery, the gifts will be reversed.
  • The donor must "deliver dominion" over the subject matter of the gifts (an example would be handing over the keys of a car to be gifted to the recipient).

Having considered the evidence presented to the court, HHJ Jarman QC, sitting as a judge of the High Court, accepted that the couple had intended for both sides of their formerly-close families to inherit equally from their deaths. But did their actions amount to the making of DMCs?

The judge found several problems with Margaret's siblings' claims; including that Alan's impending death could not have been contemplated at the time the gifts were said to have been made by the couple, as the heart attack was sudden and unexpected. Also, some of the alleged gifts were non-specific in nature (excluding the house). The court concluded that the statements made by Alan which were relied upon by the claimants as amounting to a DMC of the house, were statements of testamentary intention rather than amounting to a gift. Accordingly, the claims failed.

What Can We Take Away?

The judge noted the sadness of the case, but expressed the view:

"…this is a classic example of how the principle [of DMCs] is not to be used as a device to validate an ineffective will."

This case demonstrates the strict approach applied by the courts to the requirement for a valid DMC, following the approach of the Court of Appeal in King, even when the court's sympathies plainly lie with the claimant, as in this case. The judge was clear that even in the case of sympathetic claimants, a court cannot attempt to 'fit the facts' into strict legal requirements if those requirements have not been made out.

With regard to the failed gift of the couple's home and the requirement to "deliver dominion", the judge left the door open for further judicial consideration of whether the requirements for a DMC altered depending on whether the land was registered (as it was in this case) or unregistered, noting:

"… this interesting question deserves detailed consideration as and when a case depends on its resolution, which is not the case here on the conclusions I have come to."

If you require assistance advising a client in respect of a case involving a potential DMC, please contact Michelle Rose in our Private Client team on 07929 386108. Please mention that you are a member of VWV approach. Alternatively, please complete the form below.

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