In estate law, gifts and the context under which they were given is one of the most common issue that families litigate over. There are many different types of gifts a testator can give, each with specific requirements to be legally valid. One of the biggest reasons family members raise claims is that they believe a gift was given under unfair or suspicious circumstances. Some claims assert that a transfer was never intended to be a gift at all. In this article, we’ll discuss the concept of Donatio mortis causa, or deathbed gifts. These are gifts given when the gift giver (donor) is contemplating death.
Concerns Over Gifts Given Late in Life
One of the easiest and most efficient ways of gifting assets from your estate is inter vivos gifting. This is giving gifts while you’re still alive instead of through your will. Inter vivos gifting has many benefits for will writers, including reducing probate fees and allowing them to watch their loved ones enjoy the gift. However, inter vivos gifts are often the subject of estate disputes. Sometimes, family members expect to inherit an asset, only to find that it has been gifted to someone else already. In these circumstances, the family member might raise a claim that the asset wasn’t intended to be a gift, and is held in a constructive trust. To avoid conflict, will writers should make their intentions clear in writing when making significant asset transfers.
Another concern which can give rise to litigation is uncertainty over the testamentary capacity of the donor. To make a valid gift, the donor must have capacity, and must not be under undue influence from other parties. Lack of capacity and undue influence can invalidate a gift, meaning the asset becomes part of the estate’s residue. Beneficiaries may be very concerned when their loved one gives away a large asset near the end of their life. However, deathbed gifting is valid in many circumstances, and there is extensive case law demonstrating valid deathbed gifting.
Elements of a Valid Deathbed Gift
Legally, a gift is a ‘voluntary and gratuitous transfer of property’ from which the donor of the gift draws no personal benefit. Beyond the basic legal criteria of a gift, a deathbed gift must:
- Be made in contemplation of death;
- The gift is effectively delivered to the donee (receiver of the gift); and
- The gift is only complete upon the death of the donor.
Let’s take a closer look at the requirements of a deathbed gift.
1: Made in Contemplation of Death
The gift must be motivated by the gift donor’s contemplation of their own death. This means that the donor was contemplating the prospect of their death while making the gift. The primary motivation of the donor to give the gift is the imminence of their death. However, this does not mean that the donor must expect or be certain of their imminent death.
2: Effective Delivery of the Gift
The gift must be effectively delivered to the donee. This could simply mean the donee takes the physical asset into their possession. When ownership has technical requirements, those must be satisfied before the donee is said to have received the gift. For example, if the gift is land, necessary documents for the transfer of that land must be completed and filed.
3: Completion Upon the Death of the Donor
Any gift is only complete or “perfect” after specific criteria have been met to effect the transfer. An imperfect gift might be void or unenforceable by the donee until the conditions are met. In the case of a deathbed gift, the gift is not ‘perfected’ or complete until the death of the donor.
An Example From Case Law
A commonly cited case in this area of law helps clarify what “contemplation of death” might entail. In Thompson v. Mechan (1958), the deceased was concerned about upcoming air travel. He gave Mechan the keys to his car and blank ownership documents before traveling. There was no incident with Thompson’s air travel, but he passed away from an unrelated medical condition just days after the flight. Mechan argued that the transfer of the car was a valid gift under donatio mortis causa, and the gift was complete upon Thompson’s death.
The court found that the gift was not a deathbed gift because it was not made in genuine contemplation of death. The court found the risks associated with air travel were no more than ordinary risks people face in everyday life. Further, even if the donor had reasonably contemplated death resulting from the air travel, the gift would not have been perfected upon his death because he died of unrelated causes. Ultimately, the court ordered Mechan to either return the car to the administrator of the Thompson estate, or pay her the value of the car.
Reminders for Will Writers and Gift Givers
While the law provides mechanisms to respect and enforce the wishes of testators, it is always best to make your intentions clear in writing when giving gifts. This simple act can help avoid costly and stressful estate litigation after your death, sparing your loved ones additional hardship during an already challenging time.
Deathbed gifting and inter vivos gifting can occasionally cause controversy amongst beneficiaries, so it is best to avoid uncertainty by created a detailed estate plan and keeping it updated. If you’re ready to begin drafting your first estate plan or make changes to an existing one, contact an experienced estate lawyer today.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.
