A ‘deathbed gift’ known more formally as a ‘donatio mortis causa’ (‘DMC’) is a way of making a gift in your lifetime which is to take effect after you die even if you have not made a Will. If a person has made a Will, however, and makes a DMC which is valid, the gift does not pass to the deceased’s personal representatives but to the recipient of the gift. A DMC is a gift made contemporaneously which only takes effect on death (i.e. in the future) and can only be validly made if:
a) The person making it, ‘the donor’ truly believes that they are about to die;
b) The donor believes they are about to die for a specific reason, i.e. they are suffering from a serious illness or disease; and
c) There is sufficient evidence of valid delivery or parting with ownership of the gift.
Even if all of these conditions are met, the donor must also have mental capacity in order to give such a gift. Briefly, that is the ability to understand, weigh, retain and believe information and communicate decisions having considered the circumstances. A DMC can be revoked at any time before death if a person does have mental capacity.
Case law around DMCs sees judges generally err on the side of caution. These gifts can be given when a person is vulnerable and there is sadly lacking evidence as they are made behind closed doors. A recent high-profile case between Stephen Keeling, and his late sister, Ellen Exler, highlights the difficulties in establishing a deathbed gift.
Mr Keeling and his wife reportedly ushered Mrs Exler out of her beloved property and into a nursing home for her final days. During the time she lived in the nursing home, her brother claimed that she had handed him the paper deeds to her £900,000 house, at the same time as telling him she wanted him to have it when she died.
After receiving the deeds, Mr Keeling then had the property registered in his name and began renting out the property to tenants.
After Mrs Exler died, various family members, mainly beneficiaries of her estate, came forward recounting Mrs Exler’s wish was not for Mr Keeling and his wife to receive her house.
The Judge took into account all of the circumstances, concluding that Mr Keeling had a ‘shameless sense of entitlement’. Mr Keeling’s account was treated as being suspicious, ultimately leading to it being considered fictitious. As Mrs Exler died without having made a Will, her £1million estate as a consequence was divided up between her two brothers and nieces. Mr Keeling was ordered to pay all profits made from renting out the property after Mrs Exler’s death.
There are a number of anomalies and pitfalls in deathbed giving. Given that the doctrine of DMCs is open to abuse, strict proof of compliance with the above circumstances for them to be valid is required by the Court. It is, therefore, best to seek legal advice under such circumstances.
For further information or advice, please contact Alice Clewes, Partner in our Private Client Team.
Call: 0191 232 8345