What is a Deathbed Gift?
The general principle of inheritance is that property is passed on death according to either:
a) the terms of the deceased’s Will, or
b) the intestacy rules.
The exception to this principle is something known as a Deathbed Gift. This is where someone who believes they are dying makes a gift which will take effect on their death. These Deathbed Gifts are often referred to by lawyers as a Donatio Mortis Causa, especially those who still prefer a bit of old school legal Latin.
The Deathbed Gift principle allows a valid gift to be made on the death without having to comply with the formalities of the Wills Act 1837.
The legal requirements of a Deathbed Gift
For a Deathbed Gift to be valid the following requirements must be met:
(i) the maker of the gift was contemplating their impending death when the gift was made;
(ii) the maker of the gift intended that the gift would only take effect if and when their death occurred and that it could be revoked; and
(iii) the maker of the gift delivered the gift to the recipient (by handing over the deeds to a property for example).
Keeling v Keeling
The law relating to Deathbed Gifts was reviewed by the court in the recent case of Keeling v Keeling. This is what happened in that case.
Ellen passed away without leaving a Will. She was survived by two brothers, Stephen and Frank and the children of a third sibling who had pre-deceased her. All stood to benefit from her estate under the Intestacy Rules.
Stephen became the Administrator of the estate. He then told the other beneficiaries that following a heart attack Ellen had given him the deeds and keys to her property and said she wanted him and his wife to have her house. On the basis that this constituted a valid Deathbed Gift Stephen transferred the property to himself and his wife and rented it out.
The other beneficiaries challenged Stephen, arguing that it was not a valid Deathbed Gift.
Arguments against it being a valid Deathbed Gift in the Keeling case
- Stephen told his own Solicitors that Ellen wanted to make a Will, largely benefiting him. His Solicitors said than Ellen should be seen by an independent solicitor. However, when another Solicitor met Ellen she made it clear that she didn’t want to make a Will.
- After Ellen had allegedly gifted the property to Stephen and his Wife, Stephen handed the deeds and keys to Ellen’s Solicitors. This was inconsistent with Stephen’s assertion that Ellen wanted him to have the property.
- Ellen had not informed anyone else about the gift.
- Stephen advanced at least three different versions of what had happened.
- Ellen’s heart attack was minor and not life-threatening. It was unlikely she had been ‘contemplating her own impending death’.
- As Ellen recovered from her heart attack, the gift would have lapsed in any event.
The court’s decision
Stephen’s claim was described as “hopeless“. He lost the case and the court ordered:
(i) that the property be included in Ellen’s estate,
(ii) that the rent Stephen had received be paid to the estate, and
(iii) Ellen’s estate be distributed to all the beneficiaries in accordance with the Rules of Intestacy.
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